Bibi schools Andrea

The Israeli prime minister invites the NBC reporter to take a bit more in-depth view of the apartments in east Jerusalem.  She asks him if the permission to build new housing ("settlements," as these types prefer to call it, as if we were talking about refugees fresh from WWII persecution pitching tents in the wilderness) isn't "poisonous to a peace agreement with the Palestinians."

Netanyahu pushed back:

Well, I find that curious because the criticism was leveled, one, at a new neighborhood that was mixed. It had a substantial part of the apartments that apportioned, parceled out to Arabs, to Palestinians, alongside Jews. So why not have them live together? The second part of the criticism was actually baffling to me. Because it criticized individual Jews who bought apartments in an Arab neighborhood. Now, Jews buy apartments, private property, in Arab neighborhoods. Arabs buy apartments in Jewish neighborhoods. And I find – that's the right thing to do. 

Mitchell argued: "It's contested territory. It's territory that is supposed to be negotiated." Netanyahu pointed out: "Well, even if it is, it doesn't mean that you prevent an Arab from selling property to a Jew. If I said to you in any part of the United States or the world, 'Jews cannot buy apartments here'?"

Indeed.  What is objectionable about a free-market exchange between two parties, and why does the ethnicity of either have to rank highly among the considerations surrounding the transaction?

Along with "settlements," another term that FHers employ for the express purpose of framing the debate in a way detrimental to Israel is "east Jerusalem."

P. David Hornik at PJ Media examines its etymology:

The term actually refers to northern, eastern, and southern parts of Jerusalem that were occupied by Jordan from 1949 to 1967. Only two countries, Britain and Pakistan, recognized the Jordanian occupation. During it Jews were denied all access to their holy sites while Jordanian snipers fired repeatedly into the Jewish part of the city. Christians suffered as well, their “East Jerusalem” population dwindling from 25,000 in 1949 to 10,000 in 1967 as they were given only paltry access to their holy sites and forced to teach the Koran in their church schools (accounts here and here).

Since Israel’s conquest of “East Jerusalem” in the 1967 Six-Day War, all faiths have enjoyed freedom of worship throughout the city. Actually the only exception is the Temple Mount—to which, under an unfortunate deal worked out after the war between Israel and the Muslim Wakf, Islam retains full access while Judaism and Christianity have only partial and restricted access.
Since 1967 the city has also flourished economically, and both its Jewish and Arab populations have grown dramatically. Polls have found that, even if a Palestinian state were to be established in the West Bank, most East Jerusalem Palestinians would prefer to remain Israeli rather than become citizens of the Palestinian state.
None of this, however, dislodges Washington’s—and, of course, every European government’s—idée fixe that the only acceptable fate for “East Jerusalem” is to be held in perpetuity by Israel as a purely Arab, predominantly Muslim zone until such time as the mythical “two-state solution” can be reached and the city can be redivided.

The Israeli position about "diversity" is actually what the position of the United States was, when we still had such a nation, before it morphed into post-America:  You can come here from anywhere and be anything you'd like, but be aware that you're coming to a land with a distinct culture and national identity.  It's up to you to figure out how to fit into that.  But be assured, if you want to buy or sell stuff, you'll find folks enthusiastic about engaging with you.  We're all about economic freedom.