* Housing announcement has strained U.S.-Israel ties
* Some lawmakers rebuke U.S. criticism of Israel
By Arshad Mohammed
WASHINGTON, March 15 (Reuters) - A U.S. envoy's plans to visit the Middle East were up in the air on Monday, the State Department said, as it waited for Israel to respond to U.S. demands it show that it is serious about peace talks with the Palestinians.
Israel's announcement of plans to build 1,600 housing units in East Jerusalem has strained ties with the United States, which has said it regarded last week's decision -- made public while Vice President Joe Biden was in Israel -- as an insult.
The announcement has called into question U.S. efforts to revive indirect peace talks between the two sides after a 15-month hiatus in negotiations. The U.S. criticism of Israel has in turn drawn rebukes from U.S. members of Congress and pro-Israel lobby groups.
Secretary of State Hillary Clinton last week made specific demands of Israeli Prime Minister Benjamin Netanyahu about the project and about showing commitment to U.S.-mediated indirect peace talks, the State Department said, without elaborating.
Netanyahu, however, on Monday rejected any restrictions on Jewish settlement in and around Jerusalem.
While State Department P.J. Crowley did not draw a link, he said plans for George Mitchell, the U.S. envoy for Middle East peace, to fly to the region on Monday were in flux. He also said Washington was waiting for Israel's formal response.
"George Mitchell intends to be in the region this week, however his schedule is not yet set," Crowley told reporters. "This is a fluid situation. As of this moment, he is still in the United States."
Crowley declined to specify what demands Clinton made of Netanyahu, saying they related to the East Jerusalem project, "but really more so about ... the willingness of the parties to engage seriously in this peace process."
MOSCOW MEETING
Another official, who spoke on condition he not be named, said the question of when Mitchell would travel was largely logistical, depending on when Israel responded and whether there would be time for him to discuss the response in the region and attend a meeting on the Middle East in Moscow later this week.
Clinton and Mitchell are scheduled to travel to Russia for a meeting of the quartet of Middle East mediators that groups the European Union, Russia, the United Nations and the United States. The meeting is expected to occur on Friday.
Several prominent U.S. lawmakers, including House of Representatives Republican leader John Boehner, former Republican presidential candidate Senator John McCain and independent Senator Joe Lieberman, a former Democrat, urged the Obama administration to temper its comments about Israel.
"The Administration's decision to escalate its rhetoric ... is not merely irresponsible, it is an affront to the values and foundation of our long-term relationship with a close friend and ally," Boehner said in a written statement.
The American Israel Public Affairs Committee, a pro-Israel lobby, called on the administration to "defuse the tension" with Israel and to "make a conscious effort to move away from public demands and unilateral deadlines directed at Israel."
In a sign the administration may be trying to appear more even-handed, the State Department said it was "deeply disturbed" by unspecified Palestinian comments about Israel's consecration of an ancient synagogue in the Jewish Quarter of Jerusalem's Old City, a tinderbox site in the conflict.
"We call upon Palestinian officials to put an end to such incitement," Crowley said. (Additional reporting by Susan Cornwell and Thomas Ferraro; Editing by Peter Cooney)
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