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The U.S. condemnation of Israeli housing starts in an eastern Jerusalem neighborhood is “against American values,” Israeli Prime Minister Benjamin Netanyahu said.

In an interview Sunday morning on the CBS News show “Face the Nation,” Netanyahu said he was “baffled” by the criticism.

“What we are being criticized for is that some Jewish residents of Jerusalem bought apartments, legally, from Arabs in a predominantly Arab neighborhood and this is seen as a terrible thing,” he said, adding that the Jerusalem neighborhood in question is three minutes from his office.

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“If somewhere in America someone said Jews cannot buy apartments here, there would be an uproar. I do not accept this.”

The White House strongly criticized last week the publishing of tenders for the construction of 2,610 housing units in the Givat Hamatos neighborhood that were approved in December 2012, saying they would “poison the atmosphere” and distance Israel from “even its closest allies.”

Netanyahu said the idea that Jews and Arabs cannot buy housing in each other’s neighborhoods is bad for peace. The Israeli leader said he and President Obama during their meeting last week talked about settlements in general, and that Netanyahu suggested the heart of the matter is not settlements but rather “are the Palestinians ready to recognize a nation-state for the Jewish people” in the same way that Israel has recognized a Palestinian nation-state.

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