THE ISRAELI Prime Minister, Mr Benjamin Netanyahu, remained defiant about his government's latest plans for Jerusalem after talks with President Mubarak of Egypt yesterday.
"The issue has been overblown," he said, referring to the widespread criticism of his government's plans to build Jewish housing at Har Homah or Jebel Abu Ghneim in Arab East Jerusalem.
"The construction of a neighbourhood is the most natural thing we could do ... We believe in our policy," he added.
Saying he wanted to broadcast the real facts about Jerusalem to the Arab world, Mr Netanyahu said his government had done more for Jerusalem's Palestinian residents than its predecessors, listing infrastructural projects that would benefit both Arab and Jewish residents.
Mr Netanyahu argued that Jerusalem is not included in the Oslo accords. "It is very clear that Oslo does not prohibit construction in Jerusalem," he insisted. "We consulted with the Israeli designers of the accords on this.
However, a stony-faced Mr Mubarak disagreed, saying Oslo clearly stipulated Jerusalem as one of the issues to be dealt with in the final status talks, due to begin 10 days from now. "My fear is that this will be a complication in the future when final status talks start," he said of the building plans.
Mr Netanyahu's visit, his second since taking office last June, was the subject of widespread criticism in Egypt, with many asking why he was bothering to come at all if he was determined to flout the peace process.
One government newspaper showed a cartoon of the Israeli stuck in a roadblock outlooking at a sign saying "No Entry" in front of him.
This frosty reception was made even colder by his decision just before leaving Israel to shut down four Palestinian offices in East Jerusalem.
According to Jerusalem's Arabic press, the offices include the Palestinian Mapping Office, the Palestinian Small Business Project, the Palestinian Institute for the Wounded and the National Islamic Committee Confronting Settlements.
The Israeli government claims the offices are illegal under the Oslo peace accords, which say the Palestinian Authority cannot operate in Jerusalem. The Palestinians deny they are part of the authority.
The plans drew swift condemnation from the Palestinians and were seen as a provocation by the Egyptians.
"The step has been taken only 24 hours before a visit. I hope there is no connection, the Egyptian Foreign Minister, Mr Amr Moussa, told Israeli radio.
Asked about the closures in Cairo, Mr Netanyahu said the Palestinians have the chance to appeal. "If they succeed in convincing the court, they will remain open," he said.
The talks between the two leaders were further complicated by the announcement in Cairo yesterday of a trial date for Azam Azam, an Israeli arrested on charges of spying for Israel and damaging Egypt's national interests.
Before leaving Israel, Mr Netanyahu said he intended to discuss the case with Mr Mubarak, but appeared to have made little headway with the Egyptian leader.
Mr Mubarak told reporters that it would be unconstitutional for him to interfere in the judicial process.