LUKE: Okay, well that means Jess has some time off from school. His mom knew that and she never called.
LORELAI: Ugh, it makes me sick
LUKE: So I decided just to keep Jess with me, and I told him that his mom wanted him to come home but I thought since he just got there and was still adjusting that I thought he should stay, and his mom was really upset but I insisted. He bought it hook, line and sinker. Saved him a lot of hurt.
Liz has neglected Jess to the point that she doesn’t phone him for the Christmas holidays. Even Lorelai, not exactly Jess’ biggest fan, is disgusted that Liz doesn’t want to see her son when he has a break from school.
With the best of intentions, Luke made up a story that Liz did want him, but Luke decided it would be better for him to remain in Stars Hollow, even though that upset Liz. Lorelai knows that Jess would never have believed this story, but seems unable to completely convince Luke of this. Shortly afterwards Jess confirms that he knows Luke wasn’t truthful with him.