The photo here, linked to the Ha’aretz article from which it comes, makes it as clear as you could want just how threatening the new settlement, Givat Hamatos is. It doesn’t threaten “peace”; it doesn’t “call into question Israel’s commitment to peace.” Few have any illusions anymore that Israel has any interest in peace.
What it does is to expand Israel’s presence into Jerusalem. That will bury the old formula for Jerusalem (according to the Clinton Parameters, Jerusalem would be divided according to the formula “what is Jewish is Israel’s, what is Arab is Palestine’s). That may not be a very big deal. But it extends Israel’s grip on the eastern part of the city and, as you can see fro the map, future settlements can easily be placed in strategic positions to surround Arab villages…much as settlements do in the rest of the West Bank.
The US reaction is completely shameful. It’s worse than the usual kowtowing or tongue-clucking. In this case, the US reaction makes it clear that the Obama Administration knows full well just how damaging Givat Hamatos is, and STILL will not do a thing to stop it, but will continue to obstruct other parties (chiefly the UNSC but also the EU) from acting.