Israel's ambassador to the United States denied on Tuesday that he had said his country and Washington had hit their worst crisis in 35 years, claiming he was "flagrantly misquoted."
"I was flagrantly misquoted about remarks I made in a confidential briefing this past Saturday," Ambassador Michael Oren said in a statement, insisting that any differences would be overcome "shortly."
In the wake of a US-Israeli spat over the announcement of new settler construction just as US Vice President Joe Biden visited the staunch US ally, Israeli newspaper Yediot Aharonot quoted Oren as giving a grim assessment of the situation.
"Israel's relations with the US are facing the most severe crisis since 1975," the mass-selling daily on Monday quoted him as having said in a call with Israeli consuls around the United States.
But Oren rejected that characterization Tuesday.
"Recent events do not -- I repeat -- do not represent the lowest point in the relations between Israel and the United States," he said in a statement.
"Though we differ on certain issues, our discussions are being conducted in an atmosphere of cooperation as befitting long-standing relations between allies. I am confident that we will overcome these differences shortly."
The diplomatic fracas between Washington and Israel has provoked a political firestorm in both countries.
US officials have strongly reprimanded Israel for announcing plans to construct some 1,600 new homes in annexed east Jerusalem, which Palestinians have staked as the capital of their future state.
Israel's Prime Minister Benjamin Netanyahu has apologized for the timing of the announcement, but said the construction would go ahead despite US and Palestinian objections.