The cause" of the crisis between America and Israel is that

Reports in Israeli media say Israel’s ambassador to the United States Michael Oren told Israeli diplomats that American-Israeli relations were facing a crisis of historic proportions. Washington is furious at last week’s announcement by Israel during a visit by the US Vice President that more new Jewish homes were to be built in occupied East Jerusalem. But on Monday, the Prime Minister Benjamin Netanyahu told the Israeli parliament the building project would continue.
    Mr. Netanyahu has been presented with a choice, a breach with the right-wing members of his coalition, or with the Americans. With his speech to the Knesset, he seems to have chosen to put the needs of domestic politics first. It seems the Americans are so angry because they believe Mr. Netanyahu went back on an understanding. This was apparently that Israel would not push forward of any big new settlement building projects in East Jerusalem. This was necessary if the Palestinians were to be persuaded to join the long delayed negotiations so painstakingly put together by US mediators.