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Page last updated at 16:43 GMT, Sunday, 19 July 2009 17:43 UK

Israel defiant on Jerusalem settlement

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Israeli Prime Minister Benjamin Netanyahu has told his cabinet Jews can live and build anywhere in Jerusalem, including the mainly Arab eastern part of the city.

The US called the Israeli ambassador last week to tell him a Jewish building project in East Jerusalem should be suspended.

Israeli Vice Premier Silvan Shalom told reporters the demand was unacceptable.

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