There is no crisis in relations between Israel and the United States, despite a lingering dispute - which will be settled "soon" - over settlement construction in the occupied territories, Israel's new ambassador to Washington said Wednesday.

"There is no crisis in Israel-U.S. relations. Here we are talking about disagreements over certain subjects, very, very specific," Michael Oren told Israel Radio.

The interview took place against a backdrop of reports that the U.S. and Israel are on a collision course over Israel's insistence, in the face of U.S. opposition, that it can continue building within existing settlements.

The White House has demanded that Israel halt all settlement activity.

However, Prime Minister Benjamin Netanyahu has said that, while Israel will not build any new settlements, or expropriate any more land in the West Bank, it will continue construction in existing settlements in order to deal with the effects of population increase - a practice Israel calls natural growth.

The State Department summoned Oren over the weekend to ask for clarifications over an Israel plan to construct housing units on the site of a defunct hotel in occupied East Jerusalem.

Oren however said there was "good will" between the two countries in attempting to solve the dispute.

"The spectrum of contacts, of cooperation, between the two countries is tremendous, deep and long," he said. "We do not feel any tensions."

"I am sorry to disappoint, but there is no crisis," Oren added. "We are talking about an extremely deep alliance (between Israel and the U.S.)"

He did not say when he thought the dispute would be resolved, but said he assumed it would be "soon."

Oren, American-born and an acclaimed historian, presented his credentials to President Barack Obama on Monday.