WASHINGTON – Israel today remains a key strategic partner of the United States, the State Department said on Thursday, despite the Obama administration's grave disappointment in Israel's continued settlement activity, and American fears that such action will ultimately cause rifts between Israel and its "closest allies.""We're talking about what we've already seen to be the response of the international community to ongoing activities such as these," State Department spokeswoman Jen Psaki said, responding to a development in the construction approval process this week.Psaki and White House Press Secretary Josh Earnest said on Wednesday that continuing the activity "will only draw condemnation from the international community, distance Israel from even its closest allies" and "would call into question Israel’s ultimate commitment to a peaceful negotiated settlement with the Palestinians."The comments came just an hour after US President Barack Obama hosted Prime Minister Benyamin Netanyahu at the White House.In a round of interviews with American media outlets, Netanyahu said that the step taken toward the building of 2,610 new units in east Jerusalem was "technical," that the project was old and well-known, and that he refused to tell Jews or Arabs in the capital where to buy "private property."He also rejected the notion that the new building projects constituted settlements."It requires the building, and several stages of building, of these apartments in order for there to be places for these individuals to buy," Psaki said. "So we're talking about settlement activity, the fact that there are multiple stages in the process, and the fact that it continued. And that's why we expressed our concern."US officials have told The Jerusalem Post that they were caught off guard by the most recent approval in the housing process, prompting the harsh language. But the officials rejected privately that the rebuke was an intentional snub of Netanyahu."We don't exactly get a heads up on these things," one official said.