WASHINGTON -- Secretary of State Hillary Rodham Clinton on Friday warned Israeli Prime Minister Benjamin Netanyahu that Israel had sent a "deeply negative signal" about the U.S.-Israeli relationship, and urged him to take immediate steps to demonstrate that his country was interested in renewing efforts at a Middle East peace agreement.

Ms. Clinton spoke to the Israeli leader by phone. Her call, made in the wake of the embarrassment suffered by Vice President Joseph R. Biden during his Mideast visit this week, when Israel announced that it would build 1,600 housing units in a disputed area of Jerusalem, was an unusually tough message for the longtime U.S. ally.

Her message came two days after Mr. Biden condemned the housing action that was announced while he was in Israel, and demonstrated that Mr. Netanyahu's efforts to mollify the administration have fallen short. The prime minister has claimed that he did not know that the announcement was coming, but he has not canceled the project.

Relations with Israel have been strained during the Obama administration, and Mr. Biden's trip had been intended as a fence-mending mission. Now, it has led to the biggest crisis between the two countries in two decades.

Ms. Clinton called the prime minister "to make clear the United States considered the announcement a deeply negative signal about Israel's approach to the bilateral relationship and counter to the spirit of the vice president's trip," State Department spokesman P.J. Crowley told reporters at his regular news briefing. Ms. Clinton, he said, reinforced that "this action had undermined trust and confidence in the peace process and in America's interests."

Mr. Crowley added: "The secretary said she could not understand how this happened, particularly in light of the United States' strong commitment to Israel's security, and she made clear that the Israeli government needed to demonstrate not just through words, but through specific actions, that they are committed to this relationship and to the peace process."

U.S. special envoy and former Maine Sen. George Mitchell has struggled to relaunch peace talks between the Israelis and Palestinians. Last week, he succeeded in getting the two sides to agree to indirect talks, with Mr. Mitchell shuttling between them, but that has been put at risk by the Israeli building announcement.

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