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updated 9/13/2010 5:38:11 PM ET 2010-09-13T21:38:11

It is two blocks from ground zero, but the site of a proposed mosque and Islamic center shouldn't be seen as "hallowed ground" in a neighborhood that also contains a strip club and a betting parlor, the cleric leading the effort said Monday.

Making an ardent case for the compatibility of Islam and American values, Imam Feisal Abdul Rauf reiterated that he is searching for a solution to the furor the project has created. But he left unanswered exactly what he had in mind.

If anything, Rauf only deepened the questions around the project's future, telling an audience at the Council on Foreign Relations think tank that he was "exploring all options" — but declining to specify them — while also arguing that a high-profile site is necessary to get across his message of moderate Islam.

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While opponents of the project see it as insulting the memories of the thousands killed by Muslim extremists in the 2001 terrorist attacks, Rauf said he doesn't see the spot as sacred memorial space.

"It's absolutely disingenuous, as many have said, that that block is hallowed ground," Rauf said, noting the nearby exotic dance and betting businesses. "So let's clarify that misperception."

Some Sept. 11 victims' families and others view the proposed mosque site — in a building damaged in the attacks — as very much part of the terrain of death and sorrow surrounding the trade center.

"I just think he's being very insensitive to say it's not hallowed ground because of who's occupying the buildings," said Jim Riches, a former New York City deputy fire chief whose son, Jimmy, was killed at the trade center. "The strip club didn't murder my son."

The project has become a flashpoint for worldwide debate about Islam's place in America nine years after the Sept. 11 attacks. The controversy has colored the fall campaign season and cast a shadow on this past weekend's commemoration of the attacks, with supporters and opponents of the mosque project holding rallies nearby.

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Rauf said a project meant to foster understanding has become unduly mired in conflict and what he described as misconceptions of a fundamental clash between Islamic and American values.

The Kuwait-born Rauf said his own faith had been shaped by the sense of choosing one's identity that American society provided, compared with the Muslim milieu from which he emigrated in 1965.

"I'm a devout Muslim ... and I'm also a proud American citizen," said Rauf, noting that he was naturalized in 1979 and has a niece serving in the U.S. Army. "I vote in elections. I pay taxes. I pledge allegiance to the flag."

He said the Islamic center's organizers were surprised and saddened by the uproar and might not have pursued the project had they known what was coming. But he declined to detail any strategy for quieting the clamor — or say whether that might include moving the project.

"We are exploring all options as we speak right now, and we are working through what will be a solution, God willing, that will resolve this crisis," Rauf said during a question-and-answer session following his speech. "Everything is on the table."

After months of growing tensions over the plan, some observers say it is time to move past deliberation to a decision.

Public receptiveness toward Rauf's idea of creating a hub of moderate Islam "is being undermined by his inability to take a quick decision," said Muqtedar Khan, a University of Delaware political scientist and author of "American Muslims, Bridging Faith and Freedom." "It's time for him to be very specific: Is it staying, or is it moving?"

While not answering that, Rauf suggested the locale's high profile served an important purpose for the proposed $100 million Islamic center, which will feature prayer space as well as a swimming pool, culinary school, art studios and other features.

"We need to create a platform where the voice of moderate Muslims would be amplified," Rauf said.

A spokesman for the mosque's developer did not immediately respond to a telephone message.

A lawyer for another figure in the plan — Hisham Elzanaty, a major investor in the real estate partnership that controls the site — said he didn't know what possibilities Rauf was considering.

Meanwhile, Donald Trump discussed his rebuffed offer last week to buy out Elzanaty's stake for 25 percent more than he paid. Trump said Monday on "Live! With Regis and Kelly" that he made the offer "to get rid of the controversy."

Elzanaty's lawyer, Wolodymyr Starosolsky, said by telephone that Elzanaty had previously received a much higher offer for the project and didn't appreciate that Trump had trumpeted his bid to the media, rather than approaching him privately.

Also, author Salman Rushdie — whose satirical novel "The Satanic Verses" led to worldwide riots by Muslims and calls for his death in the 1980s — said that he believes the mosque project should be allowed to go forward but that he understands the "sensitivities" of its location.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Imam says plans for mosque must go on

  1. Closed captioning of: Imam says plans for mosque must go on

    >>> another development in the swirling couldn't vrsy over that proposed mosque and islamic center near ground zero . the imam behind the project is not backing down, vowing again that the plan will move forward. nbc's ron allen has more now from lower manhattan . ron, good morning.

    >> reporter: good morning, ann. the site of that proposed islamic center and mosque is down that street about 40 or 50 yards or so. behind me about two blocks from here you can see the edge of ground zero . the distance is about 250 yards. that's too close for the opponents of the plan. the cleric trying to make it happen holds a rare news conference later today. lately he says the project must go forward. during an emotional weekend when the nation honored the heroes of september 11th , thousands of protesters for and against the islamic center also tried to make their voices heard. the imam behind the project, what he calls a 13-story community center with a prayer space, now says moving further away from ground zero would help extremists recruit terrorists and put americans abroad at risk.

    >> the headline in the muslim world will be, islam is under attack in america. this will strengthen the radicals in the muslim world .

    >> reporter: the imam also said he never expected to cause such an uproar and blames growing anti-muslim sentiment in the country stoked by politicians running for office. however, his critics say talking about possible violence undermines the imam's claim that he is a man of peace.

    >> he seems by his actions to be more interested in confrontation than in healing.

    >> reporter: meanwhile, another potentially explosive confrontation was avoided when that pastor in florida announced on "today" that he would not burn muslim holy books to mark 9 /11.

    >> we will definitely not burn the koran, no.

    >> reporter: he says his point was made, that islam has a radical element. the pastor was also facing over 100 death threats. he's been trying to hold a meeting with imam rauf but so far that has not happened. the imam says he will continue reaching out to september 11 families, religious leaders, civic leaders here and across the nation trying to make the case for the islamic center .

    >> ron allen this morning.

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