JERUSALEM -- A day after calling for calm, Israeli Prime Minister Benjamin Netanyahu on Monday pushed Israel further toward confrontation with the United States by publicly declaring that settlement construction in Jerusalem will continue unchanged.

"Construction in Jerusalem will continue in any part of the city, as it has during the last 42 years," Mr. Netanyahu told a meeting of his Likud Party, referring to the Jewish expansion in East Jerusalem that began after Israel captured the territory during the 1967 Six-Day War.

Mr. Netanyahu's latest pronouncement appeared to shift a burgeoning controversy back to Washington, where the Obama administration has repeatedly criticized the Israeli government for its announcement last week of a new housing project in Arab East Jerusalem.

That announcement came amid a visit last week by Vice President Joe Biden, infuriating Americans and inflaming public opinion among Arabs in a step that Mr. Netanyahu and other Israelis conceded was a blunder. U.S. officials have continued pressuring the Netanyahu government over the move, as they seek Israeli concessions related to a new round of peace talks that had been scheduled to start soon.

The Obama administration must decide how far it is willing to go to enforce its political will on Israel. Administration officials are furious over what Secretary of State Hillary Rodham Clinton termed "an insult to the United States" by Israel, as experts predicted a period of stormy relations.

Israel's U.S. ambassador, Michael Oren, said Sunday that the standoff between the United States and Israel had become a "crisis of historic proportions," according to reports in Israeli newspapers.

Ms. Clinton, in a lengthy phone call Friday to Mr. Netanyahu, requested "specific things" that Israel should do to redress the situation, said chief State Department spokesman P.J. Crowley. In response, Mr. Netanyahu expressed regret over the weekend, a step the White House called "a good start," while asking for more.

Last year, President Barack Obama demanded that Israel halt all settlement construction in the West Bank and Jerusalem, but Mr. Netanyahu only agreed to a partial freeze. Analysts said the Obama administration appeared to have no contingency plan in the event of an Israeli refusal, and appeared weakened when it backed away from its original position.

But the risks for Mr. Netanyahu also are high; many Israelis consider strong ties with the United States essential to the country's security and stability.

In his remarks Monday, Mr. Netanyahu made no mention of the 1,600-unit Ramat Shlomo project, which U.S. and Palestinian officials are calling for him to shelve.

Conservatives in Israel are urging Mr. Netanyahu to stand up to the United States, which they said is using the crisis in an attempt to cripple, or even topple, the Netanyahu government.

In Washington, many influential members of Congress, such as House Foreign Affairs Committee Chairman Howard Berman, D-Calif., had yet to take a position a week after the controversy broke.

Sen. Dianne Feinstein, D-Calif., supported the Obama administration's criticism of Israel. "I believe strongly that Israel can remain a Jewish democratic state with secure borders only if there is a two-state solution, and a lasting peace," she said. "The chronic expansion of settlements is a serious obstacle."

Republican lawmakers, meanwhile, appeared to be gearing up to denounce Mr. Obama over the flap.

Washington's many pro-Israel advocacy groups also are divided. The Anti-Defamation League and the American Israel Public Affairs Committee, or AIPAC, criticized the administration. "The administration should make a conscious effort to move away from public demands and unilateral deadlines directed at Israel," said AIPAC, which describes itself as the most influential U.S. foreign policy lobby.

But more liberal groups praised the administration stance. "The Obama administration's reaction was not only appropriate but, frankly, should have occurred long ago," said Americans for Peace Now spokesman Ori Nir.

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