• While describing the East Jerusalem construction announcement as “not helpful,” President Obama denied that U.S.-Israel relations are in crisis. [JPost]

• Israeli Ambassador Michael Oren makes a similar description and the same denial in this op-ed. But he also stands by Israeli building in East Jerusalem. [NYT]

• Palestinian President Mahmoud Abbas now says he won’t engage in proximity talks without a settlement freeze in East Jerusalem. [LAT]

• A Thai farm worker in Israel was killed by a Gaza rocket, the first such death since the January 2009 Gaza conflict. [LAT]

• Forty-nine percent of Americans believe Israel must stop building settlements; 22 percent think they should be allowed to continue. [Laura Rozen]

• The situation has U.S. officials mulling the prospect of their proposing the specific contours of direct peace negotiations, likely after several months of proximity talks. [NYT]