Obama: Israel's Announcement of New Jerusalem Housing Not 'Helpful'

Israel's announcement last week of new Jewish housing in east Jerusalem while Vice President Biden was visiting wasn't "helpful" to the peace process, President Obama said Wednesday in an exclusive interview with Fox News' Bret Baier.

"What we've said is we need both sides to take steps to make sure that we can rebuild trust," he said.

The Obama administration's fierce denunciation of Israel last week has ignited a firestorm in Congress and among powerful pro-Israel interest groups, who say the criticism of America's top Mideast ally was misplaced.

And those criticizing the administration's unusually blunt response to Israel say they fear it may have distracted from and done damage to efforts to relaunch long-stalled Israeli-Palestinian peace talks.

Secretary of State Hillary Clinton upbraided Israeli Prime Minister Benjamin Netanyahu for the housing announcement in a tense and lengthy phone call on Friday and White House officials repeated the criticism on Sunday's talk shows.

The State Department on Monday said it was still awaiting a formal response from Israel to Clinton's call and, while repeating elements of the criticism, stressed that the U.S. commitment to Israel's security remains "unshakable."

Obama noted on Wednesday that his administration also condemned Tuesday's riots by Palestinians against a synagogue that had reopened.

"What we need right now is both sides to recognize that it is in their interests to move this peace process forward," he told Fox News.