Washington (AFP) - The White House delivered an extraordinary public rebuke to Prime Minister Benjamin Netanyahu on Monday, after he said US criticism of Israeli settlement building ran counter to "American values."

It was another turn for the worse in the tense relationship between President Barack Obama's administration and Netanyahu, amid deepening fallout from a meeting between the two leaders last week.

After those talks at the White House, Washington strongly condemned reported Israeli plans to give the go-ahead for thousands more settler homes in East Jerusalem, prompting Netanyahu to return fire in an interview broadcast on US television Sunday.

White House spokesman Josh Earnest said it seemed "odd for (Netanyahu) to try to defend the actions of his government by saying that our response did not reflect American values."

"It's American values that lend this country’s unwavering support to Israel," Earnest said.

"It's American values that have led us to fight for and secure funding to strengthen Israel's security in tangible ways.

"It's American values that have led us to fund and build an Iron Dome system that have protected the lives of countless innocent Israeli citizens.

"It's American values that have led the United States to fully support Israel's right to defend itself. And it's American values that have led us to defend Israel in a variety of international forums, including a variety of United States forums."

In a portion of an interview with CBS Show "Face the Nation" that was carried online, Netanyahu said he found US criticism of settlement policy "baffling."

"It's against the American values. And it doesn't bode well for peace," he said.

Last week, Israeli Public radio quoted Netanyahu as telling Obama in talks in Washington on Wednesday to "study the facts and details before making statements" about the settlement plan.

The approval of 2,610 new housing units in Israeli-annexed Arab east Jerusalem angered Washington. Earnest said at the time it would "distance Israel from even its closest allies."

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Netanyahu told Israeli journalists after the meeting that the plans had been in the pipeline for two years.

Housing Minister Uri Ariel told Israeli army radio that 1,000 of the units would "go to Arabs," but did not elaborate.

Israel's settlement building in the occupied West Bank and annexed east Jerusalem, which is illegal under international law, has caused the breakdown of several rounds of peace talks.

The settlements are built on land the Palestinians want for their potential future state, whose capital would be in east Jerusalem.