The Jewish neighborhoods of Jerusalem will always be part of Israel, said Prime Minister Benjamin Netanyahu as he dismissed charges by visiting EU foreign policy chief Federica Mogherini that Jewish building over the Green Line is an obstacle to peace.“Jerusalem is Israel’s capital and it is not a settlement,” Netanyahu said on Friday morning as he met with Mogherini in Jerusalem.“The neighborhoods where Jews live and where we are building have been in the hands of Israeli governments for the last 50 years,” Netanyahu said. “Everyone knows they will remain part of Israel in any peace arrangement.”Mogherini, however, was not swayed by his words.”The settlements are an obstacle to the two-states solution, are illegal, and so the European Union is considering this as its position.No way we can be misinterpreted on that,” Mogherini said after speaking in Ramallah with Palestinian Authority Prime Minister Rami Hamdallah on Saturday. She also met with PA President Mahmoud Abbas.Former Italian foreign minister Mogherini entered her new five-year post last week, replacing Catherine Ashton.Her two day-trip to Israel and the Palestinian territories on Friday and Saturday is her first diplomatic foray as foreign policy chief and underscores what she said is a new EU focus on resolving the Israeli-Palestinian conflict.“I believe strongly that the EU has a potential political role to play here [that is] even higher and more important then it was in the past,” she said on Friday while meeting with Foreign Minister Avigdor Liberman.Mogherini arrives at a particularly sensitive time in EU-Israel relations. The EU has taken a harsher stand against West Bank settlements and politicians in its member states have called for unilateral recognition of a Palestinian state.But Netanyahu said that he rejects the “bogus claim” that the conflict is about settlements.“I believe that the issue is not about territory; it’s about our existence. It’s about the failure to recognize Israel in any boundary, in any border, in any configuration.That was and remains the core of this conflict, that is, the persistent refusal to recognize that the Jewish people has a right to a state of its own,” he said.He assured Mogherini that Israel is working to restore calm in Jerusalem and is committed to maintaining the status quo on the Temple Mount, in which the Al-Aksa Mosque compound is controlled by the Islamic Wakf.Muslims have the sole right to pray there, but Jews and Christians can visit.“We are faced with a consistent campaign of vilification and slander that presents Israel as seeking to undermine the mosque, to change the procedures there.This is absolutely not our policy.We stand behind the status quo arrangements that have been there for many years. We will not allow them to be changed either by action or by legislation. We’ve been very clear about that,” Netanyahu said.He charged that the Palestinian Authority and Hamas are behind a campaign of misinformation to prevent Jews from entering the site.“Yesterday I spoke to King Abdullah of Jordan and we both agreed that we should work together to restore calm and to reject violence and incitement and I think that’s important,” Netanyahu said.Mogherini said in her meetings with Palestinian and Israeli leaders that she is concerned by the growing unrest in Jerusalem.“Jerusalem is not just a city, it’s not just a beautiful city, not just a capital, a potential capital of two states. It’s also a special place for plenty of people in the world, it’s a holy city, so I think that Jerusalem could show to the rest of the world that co-existing is possible, and this is I think the challenge for all of us, to show that Jerusalem can be shared,” she said in Ramallah on Saturday.Before her visit and during Mogherini spoke of the importance of reviving the frozen Israeli Palestinian peace process and said that she hopes to see a Palestinian state when she leaves office.In Gaza on Saturday, Mogherini, 41, said she was born while the conflict between Israel and the Palestinians was already raging and unless the two sides have the political will and strong leadership, it would continue for another 40 years. Without a Palestinian state, she said, the violence in Gaza would resume.“We are asking all in this moment, not in three months, not in six months not in one year, all in this moment to restart a political process that can reach for the two-state solution,” said Mogherini said.In Jerusalem on Friday, Mogherini said, “We see that there might be a political will to resume the talks and to especially make sure that these talks bring results.”She added, “There is a need for a regional approach. Israel’s security and safety will never be guaranteed unless there is a regional framework that allows that fully.The EU is and will remain ready to work in this direction with all partners of the region as well.”Reuters contributed to this report.