The problem appeared after updates. The updated Android Gradle plug-in did not support the outdated version of Gradle I had. But the error message is misleading, if you don't attempt different build options you won't see what the problem is.
After downloading a newer version of Gradle, Imported the project again, then:
Use local gradle distribution
Then Gradle home set to the folder where the new version of gradle was downloaded
that solved it
Edit: From Scott (below comments) : It's preferable to use the wrapper and to change the Gradle version in gradle-wrapper.properties instead of downloading and installing Gradle yourself. As for the Android-Gradle plugin, that's set in the dependencies.classpath block in your build file; see this