The Americans weren't buying Israel's explanation that this was the result of a slow-moving bureaucratic process which caught Mr Netanyahu and other senior officials unawares.
Immediately following the announcement, the vice president kept the Israeli prime minister waiting 90 minutes for an official dinner.
That was taken as a sign of Mr Biden's displeasure.
It also reflected the time needed to work out the line to take with President Barack Obama about the settlement issue.
In the end, the Americans seem to have acquiesced in a face-saving formula drawn up by Mr Netanyahu.
Warm speech
This says procedures will be put in place so that in future such announcements are not made at sensitive junctures in the peace process.
It also states that building at Ramat Shlomo will not start for several years.
In his speech in Tel Aviv, Mr Biden seized on this to say that negotiations should start immediately - there would be time later to work issues such as Ramat Shlomo (along with the division of Jerusalem, control of the holy sites, what is to happen to Palestinian refugees and the final borders between Israel and a future Palestinian state).
Mr Biden used his speech to reiterate yesterday's unequivocal condemnation of the Israeli decision to build these 1,600 new homes on occupied land.
He said it undermined the trust needed for negotiations to succeed. But the speech was nevertheless warm and non-confrontational.
Indeed Mr Biden began it by saying that he had been a friend and supporter of Israel's for the past 37 years as an elected public official.
'Don't bomb Iran'
An important section of Mr Biden's speech was devoted to Iran.
Part of Mr Biden's speech was aimed at Israel's fears over Iran
Some Israeli commentators have raised the question of whether the United States will be able to fully trust Israel over the sensitive and vital issue of how to deal with Iran if Israel was prepared to humiliate Mr Biden over the settlements issue.
To dispel such thoughts, the vice-president attempted to reassure Israelis that they would not have to face what they assume to be an Iranian nuclear threat alone.
He did however plead for sanctions and diplomacy to be given a chance to work before any military action.
A big part of his private discussions with Israeli leaders is thought to have been about delivering the message: don't bomb Iran.
Mr Biden's visit was about resuscitating a peace process which doesn't seem to have much life of its own - indeed one key part of his speech in Tel Aviv was to tell both parties to the conflict that the United States could not want peace more than they did.