[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2010/images/03/15/art.clinton.03152.gi.jpg caption ="U.S. Secretary of State Hillary Clinton last week called Israel’s announcement that it would begin construction on new settlements in East Jerusalem ‘insulting’ to the United States."]Jerusalem (CNN) - Israel's ties with the United States are at their worst in 35 years, the country's top envoy to the United States was quoted as saying by a local newspaper.
Israel's ambassador to the United States Michael Oren made the remarks in a conference call to the country's consuls-general Saturday night, the Haaretz newspaper said.
His comments came as the United States harshly criticized Israel for announcing new settlement construction in disputed East Jerusalem territory while Vice President Joe Biden was visiting the country.
Israeli Prime Minister Benjamin Netanyahu has set up a team to investigate the timing of the announcement, which U.S. Secretary of State Hillary Clinton called "insulting" to her country.
According to Haaretz, Clinton also made a list of demands to smooth over relationships.
Among them was a reversal of Israel's decision to clear way for 1,600 housing units in the Ramat Shlomo neighborhood in largely Arab East Jerusalem.
Mark Regev, a spokesman for Netanyahu, could not confirm whether Clinton presented Israel with a set of demands.
Netanyahu was focused on trying to "calm things down," Regev said.
The Israeli announcement of construction in Ramat Shlomo came during Biden's visit last week. It complicated U.S. efforts to set up so-called proximity talks between the Israelis and Palestinians, the latest attempt to nudge the two sides back toward talking directly.
Biden condemned the decision, calling it "a step that undermines the trust we need right now."
- CNN's Kevin Flower contributed to this report