Netanyahu Fires Back After Obama Dig 'Jerusalem is not a settlement,' declares Israeli leader By John Johnson, Newser Staff Posted Nov 9, 2010 3:31 PM CST 124 comments Comments Israeli Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting in Jerusalem, Sunday, Oct. 31, 2010. (AP Photo/Jim Hollander, Pool) (Newser) – They may not be fighting words, but they're not exactly negotiating words, either: "Jerusalem is not a settlement," huffed Benjamin Netanyahu (or at least a statement from his office). "It is the capital of Israel." The retort came after President Obama criticized Israel's plan to add 1,300 homes in the disputed eastern zone of the capital, notes the Jerusalem Post. “This kind of activity is never helpful when it comes to peace negotiations,” said Obama, “and I’m concerned that we’re not seeing each side make the extra effort involved to get a breakthrough." Unlike most of the international community, Israel makes a distinction between construction in east Jerusalem and that in the West Bank, explains the Post. Israel "never agreed to limit its construction in any way in Jerusalem where 800,000 inhabitants live," said the statement, adding that the planned work should have no bearing on peace talks. Netanyahu, already on a US visit, meets with Hillary Clinton on Thursday.