To the original poster, Mr. CT Lawyer:
When my daughter got engaged a few years ago , my mechutan came to me and asked for a large sum of money for an apartment (which he also would contribute). A little background, the kids live in Israel, I live in North America, Mr. Mechutan lived in North America (although is not North American) and now lives in Israel. I am well aware that buying an apartment is an Israeli thing. ( I merely said, “Shlomie — I am sure that we will have a great relationship go forward and I know my daughter is very excited but this is not a conversation worth having because I cant/wont do that .” That was that. And, in fact, we do have a very nice relationship, he is a great person — and my daughter is very very happy (and her husband is a great person).
So I say to you — it may be chutzpah — but “so what.” Decline the invitation to pay — as you did — and go from on from there. Mazel Tov.