Sen. Mitchell Says ‘Blunder’ by Bush Contributed to Splintering of Israeli Coalition : Politics: Democrat launches attack over comments on the sensitive issue of East Jerusalem’s future.

In a strongly worded attack, Senate Democratic Leader George J. Mitchell accused President Bush on Friday of a “heavy-handed blunder” that contributed to the downfall of the Israeli government when he raised the issue of East Jerusalem’s future status.

“His remarks have contributed to the recent political crisis in Israel and have cast doubt upon America’s intentions and role in promoting peace in the Middle East,” Mitchell (D-Me.) said in a statement. “A more heavy-handed blunder is difficult to imagine.”

Bush, speaking at a March 3 news conference in Palm Springs, voiced opposition to settlements by Soviet Jews in predominantly Arab East Jerusalem, which Israel captured in 1967 and subsequently annexed.

Although Bush’s comments were consistent with longstanding U.S. policy, U.S. officials generally have refrained from discussing East Jerusalem because its future status is one of the most sensitive issues facing the Israelis.

Although a number of American Jewish organizations have been highly critical of the President’s remarks 13 days ago, Mitchell’s broadside was the first Democratic move to reap political benefit from the issue.

The Senate leader’s response came a day after Israeli Prime Minister Yitzhak Shamir’s government fell on a parliamentary vote of no confidence, reflecting its refusal to accept an American plan to start peace talks with the Palestinians.

Meanwhile, State Department spokeswoman Margaret Tutwiler, responding to a reporter’s question, declined to acknowledge that the President’s remarks had contributed to the downfall of the Israeli coalition government headed by Shamir.

“Obviously there is a pause in moving the peace process forward,” Tutwiler said.

She added, however: “The vote in the Knesset (Thursday) clearly reflected a focus on the peace issue and the importance of moving forward. . . . The Israeli government has fallen and Israel’s constitutional processes will come into effect. It will now take some time for a new government to be formed. This is an exclusively Israeli matter that only Israelis can work out.”

A spokeswoman for Mitchell said he decided to speak out, nearly two weeks after Bush made his comments on East Jerusalem, because of press inquiries regarding his view of the controversy. The statement was issued after a series of fund-raising appearances in California for the Senate Democratic Campaign Committee.

While most Democratic and Republican politicians take a pro-Israeli stance, Mitchell’s statement seemed likely to win more favor among American Jews and other Israeli sympathizers than the President’s position.

Israel says that it annexed East Jerusalem and will never give it up. But U.S. policy regards the area as occupied territory, with its final status subject to negotiation during peace talks with Palestinians.

Although Bush simply restated American policy in effect since 1967, the timing of his remarks at a crucial stage in the drawn-out peace process has been regarded as a mistake by foreign policy specialists.

Shamir has implied that Bush’s comment was the final straw that led to the collapse of Israel’s coalition government. Many Bush Administration officials believe, however, that Shamir’s hard-line resistance to American recommendations for peace talks with Palestinians was equally to blame for the government’s fall.

Mitchell praised the Bush Administration for paving the way for the Mideast peace process through consultations with Israel and Egypt that built trust on all sides. But he said the President’s remarks have undermined that progress.

“There was simply no reason to suddenly thrust into the forefront of debate the issue of Jewish Israelis’ rights to live in East Jerusalem,” Mitchell said.

Times staff writer Norman Kempster contributed to this report.