Washington (CNN)  -- Israeli Prime Minister Benjamin Netanyahu on Monday sharply defended his government's plan to build new housing on disputed land in East Jerusalem, a decision that has put Israel at odds with its leading ally. In a defiant speech to the leading pro-Israel lobby in the United States, Netanyahu said Jewish neighborhoods in East Jerusalem are "an integral and inextricable part of modern Jerusalem." "The connection between the Jewish people and Jerusalem cannot be denied," Netanyahu said to prolonged applause. "The Jewish people were building Jerusalem 3,000 years ago, and the Jewish people are building Jerusalem today. Jerusalem is not a settlement. It is our capital."
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NEW: Netanyahu tells Israeli lobby that Jewish building in East Jerusalem will continue
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Commitment to Israel "unwavering, enduring and forever," Hillary Clinton says
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Secretary of state says U.S. will also continue to rebuke Israel when necessary
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Construction plans in East Jerusalem has strained U.S.-Israeli ties
The United States is Israel's leading ally and provides nearly $3 billion a year in aid to the Jewish state, about three-quarters of which goes to purchase @placeholder military equipment.