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Israel feels rising anger of US over settlements

Netanyahu says there will be no compromise

By Mark Landler and Ethan Bronner
New York Times / March 16, 2010

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WASHINGTON — An ill-timed municipal housing announcement in Jerusalem has mutated into one of the most serious conflicts between the United States and Israel in two decades, leaving a politically embarrassed Israeli government scrambling to respond to a tough list of demands by the Obama administration.

The White House has put Prime Minister Benjamin Netanyahu in a difficult political spot at home by insisting that the Israeli government halt a plan to build housing units in East Jerusalem. The administration also wants Netanyahu to commit to substantive negotiations with the Palestinians, after more than a year in which the peace process has been moribund.

With special envoy George J. Mitchell suddenly delaying his planned trip to Israel, the administration was expecting a call from Netanyahu, after a tense exchange last week with US Secretary of State Hillary Rodham Clinton.

Yesterday, however, Netanyahu sounded a defiant note, telling the Israeli Parliament that construction of Jewish housing in Jerusalem was not a matter for negotiation.

He is struggling to balance an increasingly unhappy ally in Washington with the restive right wing of his coalition government.

The prospects for peace in the Middle East seemed murkier than ever, as a year’s worth of frustration on the part of President Obama and his aides seemed to boil over in its furious response to the housing announcement, which spoiled a visit to Israel by Vice President Joseph R. Biden Jr.

“What happened to the vice president in Israel was unprecedented,’’ said a senior administration official, who spoke on the condition of anonymity. “Where it goes from here depends on the Israelis.’’

But the diplomatic standoff also has repercussions for the White House. Its blunt criticism of Israel — delivered publicly by Clinton in two television interviews on Friday and reiterated Sunday by Obama’s political advisor, David Axelrod — has set off a storm in Washington, with pro-Israel groups and several prominent lawmakers criticizing the administration for unfairly singling out a staunch American ally.

“Let’s cut the family fighting,’’ said Senator Joseph I. Lieberman, independent of Connecticut. “It’s unnecessary; it’s destructive of our shared national interest. It’s time to lower voices, to get over the family feud between the US and Israel. It just doesn’t serve anybody’s interests but our enemies.’’

Relations between Israel and the United States have been uneasy ever since Obama took office with a plan to rekindle the peace process by coupling a demand for a full freeze in Jewish settlement construction with reciprocal confidence-building gestures by Arab countries.

Neither happened, and Obama, who is not as popular in Israel as he is elsewhere around the world, was forced in September to make do with Netanyahu’s offer of a 10-month partial moratorium on settlements in the West Bank. But the president was outraged by the announcement of 1,600 housing units in an ultra-Orthodox neighborhood in East Jerusalem during Biden’s visit, administration officials said.

Obama was deeply involved in the strategy and planning for Biden’s visit and orchestrated the response from Biden and Clinton after it went awry, these officials said.

The administration has used language designed to telegraph anger, defining the dispute not only in terms of the damage it could cause to the peace process but to the American relationship with Israel.

“That is a whole different order of magnitude of importance,’’ said Daniel Levy, a former peace negotiator who is senior fellow and head of the Middle East Initiative at the New America Foundation, a research group.

The last time relations between the United States and Israel became this strained, analysts said, was when James A. Baker, then secretary of state, clashed with the Israeli government in the early 1990s, also over settlement policy. The United States ended up withholding loan guarantees from Israel for a time.

Netanyahu said the announcement of the housing development had surprised even him, and he apologized for its timing. But Obama feels Netanyahu should have been in clearer control of the construction process and that he should have done what was needed to stop it, according to officials in Jerusalem and Washington.

There is a feeling among officials in Washington that the Netanyahu government does not fully grasp how angry Obama officials have grown. But there are signs that it is sinking in.