JERUSALEM — The U.S. is pressing Israel to scrap a contentious east Jerusalem building project whose approval has touched off the most serious diplomatic feud with Washington in years, said Israeli officials Monday.

Tensions in the city at the center of the spat were high, with police out in large numbers in Jerusalem's volatile Old City in expectation of renewed clashes and Palestinian shopkeepers shuttering their stores for several hours to protest Israel's actions in the city.

Top U.S. officials have lined up in recent days to condemn the Israeli plan to build 1,600 apartments in east Jerusalem, the sector of the city that the Palestinians claim for their future capital.

The project was announced during Vice President Joe Biden's visit to the region last week, badly embarrassing the U.S. and complicating its efforts to restart Israeli-Palestinian peacemaking.

U.S. officials have not disclosed what steps they want Israel to take to defuse the crisis, and Israeli government spokesman Mark Regev refused to comment Monday. But Israeli officials, speaking on condition of anonymity because no official decision has been made public, said Washington wants the construction project canceled.

Although Israeli Prime Minister Benjamin Netanyahu has apologized for the timing of the project's approval, he has not said he will cancel it.

Israel does not stand to benefit from antagonizing its most important ally, but Netanyahu has historically taken a hard line against territorial concessions to the Palestinians, and a curb on east Jerusalem construction would threaten to fracture his hawkish coalition.

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