**Israel’s ambassador to the US has said that relations between the two countries face their worst crisis for 35 years, the Israeli media reported.**Last week Israeli officials announced the building of 1,600 new homes in occupied East Jerusalem while US Vice President Joe Biden was visiting.
Since the announcement, Palestinian leaders have said that indirect talks with Israel are now “doubtful”.
Previously the Israeli government has played down the strain in relations.
But Israel’s Ambassador to the US, Michael Oren, told a conference call with Israeli consuls general in the US that “the crisis was very serious and we are facing a very difficult period in relations”, the Israeli media reported on Monday.
The Yedioth Ahronoth newspaper quoted the ambassador as saying “Israel’s ties with the US are in the most serious crisis since 1975”.
The Haaretz newspaper said the quote had been reported to them by four of the Israeli consuls general following the conference call on Saturday.
Mr Oren had appeared “tense and pessimistic” the Consuls General told the newspaper.
The Israeli embassy in Washington has not yet commented publically on the story.
In 1975, US-Israeli relations were strained by a demand form then US Secretary of State Henry Kissinger that Israel’s Prime Minister Yitzhak Rabin partially withdraw its troops from the Sinai Peninsula where they had been since the 1967 Six-Day War.
On Friday Mr Oren was summoned to the State Department and was reprimanded about the affair, Ynet reported.
‘Insult’
On Sunday a top aide to US President Barack Obama said Israel’s announcement of plans to build 1,600 homes for Jews in East Jerusalem was “destructive” to peace efforts.
David Axelrod said the move, which overshadowed a visit to Israel by US Vice-President Joe Biden, was also an “insult” to the United States.
Just hours before the announcement Mr Biden had emphasised how close relations were, saying there was “no space” between Israel and the US.
Israeli Prime Minister Benjamin Netanyahu has tried to play down the unusually bitter diplomatic row between the two allies.
He said the announcement was a “bureaucratic mix-up” and that he “deeply regretted” the timing of the announcement.
Under the Israeli plans, the new homes will be built in Ramat Shlomo in East Jerusalem.
The Palestinians are threatening to boycott newly agreed, indirect talks unless the Ramat Shlomo project is cancelled.
Close to 500,000 Jews live in more than 100 settlements built since Israel’s 1967 occupation of the West Bank and East Jerusalem. The settlements are illegal under international law, although Israel disputes this.