R. Isaac said: When Solomon married Pharaoh's daughter, Gabriel descended and stuck a reed in the sea, which gathered a sand-bank around it, on which was built the great city of Rome.God created Rome to punish the Jews for Solomon's actions and their ancient sins.
But when one checks the commentary in the Jerusalem Talmud this passage is expanded upon with some variations (yAZ 1.2, 39c; see):
R. Levi said: On the day when Solomon married the daughter of Pharaoh Necho, the king of Egypt, Michael came down from heaven and struck a staff into the sea, and pulled up a heap of mud which became a great forest, and this was the location of the great city of Rome. On the day when Jeroboan set up two golden calves, Romulus and Remus came and built two huts in Rome. On the day when Elijah disappeared, a king was appointed in Rome - "And there was no king in Edom, a deputy was king" (I Kings 22:48)The passage makes it clear that the foundation and development of Rome was due to a series of sins by a number of Jews - not just punishment for the Jews for the sin of Solomon. Jeroboam, he "who made Israel to sin" (I Kings 14:16), erected two Golden Calves to his pagan gods and the one God sent two brothers as punishment to found Rome.
In Midrash Psalms 10.6 R. Yudan quotes R. Judah on a story of Romulus and Remus being abandoned by their mother and suckled by a wolf, as a comment on Psalms 10:14.
In the of the midrash of Canticles in the the Jerusalem Talmud (see), Romulus and Remus are not mentioned, but their reed huts are. These keep falling down until they seeks the advice of Abba Kolon and mix in the waters of the Euphrates, according to Rabbi Judah. More on this and other stories about the founding of Rome can be found here.
In another midrash Solomon and the king of Rome meet, so I'm not going to pretend these are genuinely useful sources for the study of the foundation of Rome. The passages are interesting as an explanation for the way Jews in Late Antiquity and the early Byzantine period viewed the loss of their lands to Rome.