According to the BBC, and not surprising at all.
The sort of reckless and arrogant policy making that has been coming from Israel lately cannot be accidental. My honest impression is that someone over there thinks they can piss all over the Obama administration because they are, probably correctly, gambling that he won't do anything about it for political reasons. In other words, the second that Obama criticizes Israel, the Republicans will undercut him and offer blind, unconditional support to Israel no matter what the Israelis are doing. The Israelis' gamble is still dangerous, though. Obama could get a second term, and they are no doubt doing enormous damage to their reputation among average Americans.
For a whole host of reasons, it has been my position that Middle East peace was being thwarted more by Arabs than by Israelis. That position is no longer tenable. The surrounding Arab states are worried about Iran, and are starting to see Israel as a tempting ally. The Palestinian Authority in the West Bank has moderated significantly, and has done a really good job of clamping down on terrorist activities. Even Gaza has been extremely quiet lately. Make no mistake, it is the Israelis now that are holding back the peace process, and they are doing it on America's dollar.
This ultimately may turn out to be a blessing in disguise though. To win back America's favor, Israel will have to make greater sacrifices, which will make peace more likely. The Palestinians should get the eastern half of Jerusalem for their capital, end of story. If the two sides can't agree to share it, then Jerusalem should be administered as an international mandate as was originally intended in the UN Partition of 1947.