He said Clinton made clear that the Israeli government needed to demonstrate not just through words but through specific actions that they are committed to this relationship and to the peace process.
Asked if the tone of the call was angry, Crowley said "frustration would be a better term".
Nour Odeh, Al Jazeera's correspondent in the West Bank town of Ramallah, said Clinton's unprecedented reaction had raised some hopes in the Palestinian territories.
"These kinds of reactions are not customary from the US, regardless of whether it's a Republican or Democratic administration in the White House," she said.
"The Palestinians are watching very carefully. They have welcomed the American rebuke ... all eyes are on Washington - this is the closest ally to Israel and the country that has the most leverage to exercise in the Middle East."
Clinton's rebuke of Netanyahu came at the end of a week of tense exchanges between the US and Israel, after the latter announced it was building 1,600 new settler homes in an area of the occupied West Bank.
The announcement infuriated the West Bank-based Palestinian leadership, which threatened to pull out of US-brokered indirect "proximity" talks with Israel that Washington hoped would be the first step towards relaunching full peace negotiations after more than a year.
It also embarrassed Joe Biden, the US vice-president, who was in Israel to emphasise the US president's commitment to Israel's security in the face of a possible Iranian nuclear threat.
"The announcement of the settlement the very same day the vice-president was there was insulting ... an unfortunate and difficult moment for everyone," Clinton said in an interview with CNN.
Since then Biden repeated calls for talks despite Palestinian demands that Israel first cancel the settlement project.
Crowley said George Mitchell, the US Middle East peace envoy, and Jeffrey Feltman, the assistant secretary of state, had made numerous calls to regional leaders including Mahmoud Abbas, the Palestinian president, and underscored continued commitment to the plans for indirect talks.
Palestinians have called the announcement a deliberate attempt by Netanyahu to sabotage peace talks in which he will likely come under pressure to trade land for a deal.
Netanyahu has said he did not know the announcement was coming and that
nothing would actually be built in the area for years.
But Crowley said: "We accept what Prime Minister Netanyahu has said, but by
the same token he is the head of the Israeli government and ultimately is responsible for the actions of that government."
Also on Friday, The Middle East diplomatic Quartet condemned Israel's plans and said unilateral actions would not be recognised by the international community.
The group - the European Union, the United States, Russia and the United Nations - in a statement condemned "Israel's decision to advance planning for new housing units in East Jerusalem".
"The Quartet reaffirms that unilateral actions taken by either party cannot prejudge the outcome of negotiations and will not be recognised by the international community," it added.