Clinton said although the United States' relationship with Israel is not at risk as it is rooted in common values, the announcement of the settlements on the day that the U.S vice president Joe Biden was there was insulting.

"I mean, it was just really a very unfortunate and difficult moment for everyone -- the United States, our vice president who had gone to reassert our strong support for Israeli security -- and I regret deeply that that occurred and made that known," Clinton said.

She added that she has no reason to believe that Prime Minister Netanyahu knew about the announcement during Biden's visit but added, "He is the prime minister. Like the president or secretary of state ... ultimately, you are responsible."

Israeli government previously decided to build 1,600 new housing units in Jewish settlements in East Jerusalem.