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Israeli Prime Minister Benjamin Netanyahu told a pro-Israel lobby on Monday that "Jerusalem is not a settlement," but is Israel's capital, as he showed no sign of narrowing the gap with Washington.

"The Jewish people were building Jerusalem 3,000 year ago and the Jewish people are building Jerusalem today. Jerusalem is not a settlement. It's our capital," Netanyahu told the pro-Israel lobby AIPAC.

He said he was simply following the policies of all Israeli governments since 1967, when Israel won a war with its Arab neighbors and seized east Jerusalem, which it later annexed.

His remarks triggered a rousing standing ovation from the 7,500 delegates at the annual policy conference of AIPAC, the American Israel Public Affairs Committee, but also denunciations from a few protesters.

Their shouts were drowned out by the delegates in the Washington Convention Center.

Israel's announcement on 9 March of 1,600 new homes in east Jerusalem triggered a rare US condemnation, which US Secretary of State Hillary Clinton said undermined newly-agreed Israeli-Palestinian peace talks.

AFP/ir