Israeli Prime Minister Benjamin Netanyahu on Sunday sought to project calm amid a deepening crisis with the United States, seen as the worst rift between the close allies in decades.

"We opened the papers this morning and saw the analyses and reviews. I suggest we not get carried away, and calm down," Netanyahu said ahead of a weekly cabinet meeting.

"We know how to deal with situations like these, calmly, responsibly and seriously," he said.

Israel had thought the crisis -- provoked by an announcement of plans for 1,600 new settler homes in mostly Arab east Jerusalem during a visit by US Vice President Joe Biden -- was over, following a public apology issued on Thursday.

But over the weekend the US signalled things were far from business as usual.

US Secretary of State Hillary Clinton berated Netanyahu in a 43-minute phone conversation before telling the press the move was "insulting," and sent a "deeply negative signal" about Israel's ties to its top ally.

"The crisis is still in full force and has reached new heights. It appears to be far more severe than anything we've known in the past decade, and perhaps even longer," Israel's Maariv newspaper said in an editorial.

"When was the last time we heard such harsh words, and such a cold and alienated tone of voice from Washington? And it isn't just the tone and the words. It is the lack of trust, the contempt," Israel's Yediot Aharonot newspaper said in an editorial entitled "Spit in the face."

Israeli daily Haaretz suggested Netanyahu re-evaluate his mostly right-wing governing coalition. 

-AFP/NOW Lebanon