Presidents Bill Clinton, George W. Bush, and now Barack Obama have all publicly stated that the United States seeks a "two-state" solution to the Israeli-Palestinian conflict. In other words, the United States supports the creation of a viable Palestinian state in virtually all of the West Bank and Gaza. The new Israeli government led by Benjamin Netanyahu opposes this goal, and Foreign Minister Avigdor Lieberman has already said that he does not think Israel is bound by its recent commitments on this issue.

To advance its own interests, therefore, the United States will have to pursue a more even-handed policy than it has in the past, and put strong pressure on both sides to come to an agreement. Instead of the current "special relationship" -- where the U.S. gives Israel generous and nearly-unconditional support -- the United States and Israel would have a more normal relationship, akin to U.S. relations with other democracies (where public criticism and overt pressure sometimes occurs). While still committed to Israel’s security, the United States would use the leverage at its disposal to make a two-state solution a reality.

This idea appears to be gaining ground. Several weeks ago, a bipartisan panel of distinguished foreign policy experts headed by Henry Siegman and Brent Scowcroft issued a thoughtful report calling for the Obama administration to “engage in prompt, sustained, and determined efforts to resolve the Arab-Israeli conflict.” Success, they noted, "will require a careful blend of persuasion, inducement, reward, and pressure..." Last week, the Economist called for the United States to reduce its aid to Israel if the Netanyahu government continues to reject a two-state solution. The Boston Globe offered a similar view earlier this week, advising Obama to tell Netanyahu "to take the steps necessary for peace or risk compromising Israel's special relationship with America." A few days ago, Ha’aretz reported that the Obama Administration was preparing Congressional leaders for a possible confrontation with the Netanyahu government.

These developments got me thinking: what might a more even-handed posture look like in practice? We already know what it means for the United States to put pressure on the Palestinians, because Washington has done that repeatedly -- and sometimes effectively -- over the past several decades. During the 1970s, for example, the United States supported King Hussein’s violent crackdown on the PLO cadres who were threatening his rule in Jordan. During the 1980s, the United States refused to recognize the PLO until it accepted Israel’s right to exist. After the outbreak of the Second Intifada, the Bush administration refused to deal with Yasser Arafat and pushed hard for his replacement. After Arafat's death, we insisted on democratic elections for a new Palestinian assembly and then rejected the results when Hamas won. The United States has also gone after charitable organizations with ties to Hamas and backed Israel’s recent campaign in Gaza. In short, the United States has rarely hesitated to use its leverage to try to shape Palestinian behavior, even if some of these efforts -- such as the inept attempt to foment a Fatah coup against Hamas in 2007 -- have backfired.

But what about pressure on Israel? The United States has only rarely put (mild) pressure on Israel in recent decades (and never for very long), even when the Israeli government was engaged in actions (such as building settlements) that the U.S. government opposed. The question is: if the Netanyahu/Lieberman government remains intransigent, what should Obama do? Are there usable sources of leverage that the United States could employ to nudge Israel away from the vision of “Greater Israel” and towards a genuine two-state solution? Here are a few ideas.

1. Cut the aid package? If you add it all up, Israel gets over $3 billion in U.S. economic and military aid each year, which works out to about $500 per Israeli citizen. There’s a lot of potential leverage here, but it’s probably not the best stick to use, at least not at first. Trying to trim or cut the aid package will trigger an open and undoubtedly ugly confrontation in Congress (where the influence of AIPAC and other hard-line groups in the Israel lobby is greatest). So that’s not where I’d start. Instead, I’d consider a few other options, such as:

2. Change the Rhetoric. The Obama administration could begin by using different language to describe certain Israeli policies. While reaffirming America’s commitment to Israel’s existence as a Jewish-majority state, it could stop referring to settlement construction as “unhelpful,” a word that makes U.S. diplomats sound timid and mealy-mouthed. Instead, we could start describing the settlements as “illegal” or as “violations of international law.” The UN Charter forbids acquisition of territory by force and the Fourth Geneva Convention bars states from transfering their populations (even if voluntarily) to areas under belligerent occupation. This is why earlier U.S. administrations described the settlements as illegal, and why the rest of the world has long regarded them in the same way. U.S. officials could even describe Israel’s occupation as “contrary to democracy,” “unwise,” “cruel,” or “unjust.” Altering the rhetoric would send a clear signal to the Israeli government and its citizens that their government’s opposition to a two-state solution was jeopardizing the special relationship.

3. Support a U.N. Resolution Condemning the Occupation. Since 1972, the United States has vetoed forty-three U.N. Security Council resolutions that were critical of Israel (a number greater than the sum of all vetoes cast by the other permanent members). If the Obama administration wanted to send a clear signal that it was unhappy with Israel’s actions, it could sponsor a resolution condemning the occupation and calling for a two-state solution. Taking an active role in drafting such a measure would also ensure that it said exactly what we wanted, and avoided criticisms that we didn’t want included.

4. Downgrade existing arrangements for “strategic cooperation.” There are now a number of institutionalized arrangements for security cooperation between the Pentagon and the Israel Defense Forces and between U.S. and Israeli intelligence. The Obama administration could postpone or suspend some of these meetings, or start sending lower-grade representatives to them. There is in fact a precedent for this step: after negotiating the original agreements for a “strategic partnership,” the Reagan administration suspended them following Israel’s invasion of Lebanon in 1982. Today, such a step would surely get the attention of Israel’s security establishment.

5. Reduce U.S. purchases of Israeli military equipment. In addition to providing Israel with military assistance (some of which is then used to purchase U.S. arms), the Pentagon also buys millions of dollars of weaponry and other services from Israel’s own defense industry. Obama could instruct Secretary of Defense Robert Gates to slow or decrease these purchases, which would send an unmistakable signal that it was no longer "business-as-usual." Given the battering Israel’s economy has taken in the current global recession, this step would get noticed too.

6. Get tough with private organizations that support settlement activity. As David Ignatius recently noted in the Washington Post, many private donations to charitable organizations operating in Israel are tax-deductible in the United States, including private donations that support settlement activity. This makes no sense: it means the American taxpayer is indirectly subsidizing activities that are contrary to stated U.S. policy and that actually threaten Israel’s long-term future. Just as the United States has gone after charitable contributions flowing to terrorist organizations, the U.S. Treasury could crack down on charitable organizations (including those of some prominent Christian Zionists) that are supporting these illegal activities.

7. Place more limits on U.S. loan guarantees. The United States has provided billions of dollars of loan guarantees to Israel on several occasions, which enabled Israel to borrow money from commercial banks at lower interest rates. Back in 1992, the first Bush administration held up nearly $10 billion in guarantees until Israel agreed to halt settlement construction and attend the Madrid peace conference, and the dispute helped undermine the hard-line Likud government of Yitzhak Shamir and bring Yitzhak Rabin to power, which in turn made the historic Oslo Agreement possible.

8. Encourage other U.S. allies to use their influence too. In the past, the United States has often pressed other states to upgrade their own ties with Israel. If pressure is needed, however, the United States could try a different tack. For example, we could quietly encourage the EU not to upgrade its relations with Israel until it had agreed to end the occupation.

I don’t think Obama needs to employ all of these steps --and certainly not all at once -- but the United States clearly has plenty of options if pressure turns out to be necessary. And most of these measures could be implemented by the Executive Branch alone, thereby outflanking die-hard defenders of the special relationship in Congress. Indeed, even hinting that it was thinking about some of these measures would probably get Netanyahu to start reconsidering his position.

Most importantly, Obama and his aides will need to reach out to Israel’s supporters in the United States, and make it clear to them that pressing Israel to end the occupation is essential for Israel’s long-term survival. He will have to work with the more far-sighted elements in the pro-Israel community -- including groups like J Street, the Israel Policy Forum, Brit Tzedek v'Shalom, and others -- and make it perfectly clear that his administration is not selling Israel down the river. And yes, we are also going to have to keep pressing Hamas to moderate its positions and push the Palestinian authority to create more effective governing institutions.

The key point to grasp is that using U.S. leverage on both sides--and not just one--is not an “anti-Israel” policy, if that is what it will take to make the two-state solution a reality. It is in fact the best thing we could do for ourselves and for Israel itself. In effect, the United States would be giving Israel a choice: it can end its self-defeating occupation of Palestinian lands, actively work for a two-state solution, and thereby remain a cherished American ally. Or it can continue to expand the occupation and face a progressive loss of American support as well as the costly and corrupting burden of ruling millions of Palestinians by force.

Indeed, that is why many—though of course not all--Israelis would probably welcome a more active and evenhanded U.S. role. It was former Prime Minister Ehud Olmert who said "if the two-state solution collapses, Israel will face a South-Africa style struggle for political rights." And once that happens, he warned, “the state of Israel is finished." The editor of Ha’aretz, David Landau, conveyed much the same sentiment last September when he told former Secretary of State Condoleezza Rice that the United States should "rape" Israel in order to force a solution. Landau's phrase was shocking and offensive, but it underscored the sense of urgency felt within some segments of the Israeli body politic.

Indeed, I suspect it would not take much U.S. pressure to produce the necessary shift in Israel’s attitudes. As the recent bipartisan statement notes, "most Israelis understand and appreciate that, at the end of the day, what really matters most for Israel's security is a relationship of trust, confidence, and friendship with the U.S." If the United States believes that a two-state solution is the best option, then it will have to convey that this “trust, confidence, and friendship” can be retained if Israel changes course, but cannot be taken for granted.