President Obama will not give in to Israel when it comes to settlements. Both he, Secretary Clinton and Special Envoy Mitchell have made it abundantly clear: “not one more brick.” Israel’s refusal of this demand could potentially lead to a level of tensions between Washington and Jerusalem that we have not seen in a long while. Israel should propose an alternative that will not only make the administration happy, but will also make real progress toward ending the Israeli-Arab conflict. This compromise is the ”Compensation Law.” Instead offreezing settlements, Israel would open the way for settlers who wish to move back into Israel to do so, for the first time in over 40 years.

President Obama’s choice of the settlement issue as his sticking point in his approach to Israel was not accidental. Palestinians and the Arab world in general view settlement expansion as evidence of Israel’s ultimate intention not to withdraw from the West Bank in the context of a comprehensive peace and establishment of a Palestinian state. If we look at history through Palestinian eyes, we can see why.

Since 1967, whether it was Rabin, Shamir, Peres, Barak or Sharon in charge, the number of settlers grew under each and every government. In 1993, when the Oslo treaty was signed, 220,000 Jewish settlers resided in the West Bank. Today, there are almost 500,000. And this while we were supposedly moving toward Palestinian statehood. Even the Sharon government, which evacuated 8,000 settlers from Gaza, added about 50,000 more in the West Bank.

President Obama knows that delivering on settlements will give him leverage to ask for concrete measures from the Palestinians and the Arabs. This is the only way the United States can regain its role and utility as a legitimate broker. This is not about not supporting Israel, nor is it about demanding Israeli concessions that risk its security. It is about a genuine American effort to bring an end to the conflict; a true Israeli interest.

Obama also knows that while there might be a great debate among American Jews on Jerusalem, borders and refugees, there is a significant consensus within the community when it comes to settlements: they need to stop. Though some might criticize, the president knows that the Jewish community will support him on this. Seventy eight percent of American Jews voted for and still support the president.

If Obama will not bend on settlements, Israel has two options: just say no, or offer an alternative. For all the reasons in the world it is clear that offering an alternative is much better. And an alternative exists. It is called the “Compensation Law.” Instead of freezing settlements, this proposed Israeli law could be accepted by the administration, the price for Israel is low, and it carries no security risks.

The “Compensation Law” includes two pillars: settlers residing east of the security barrier who choose to relocate to Israel will be compensated by the State; and an expiration date, after which remaining settlers would not be entitled to compensation even should the State evacuate their settlements. Israel can even seek financial support from the US Congress to implement the law. Netanyahu’s domestic battle to pass that law would not be easy, but it would be easier than a settlement freeze. After all, currently, settlers who wish to relocate into Israel are trapped as hostages by the State, unwilling to compensate them.

The US Administration should accept the “Compensation Law” alternative for several reasons: first and foremost, no one in Washington or Jerusalem is eager for a fight. Both have much to lose. Moreover, the Administration would be happy to avoid negotiating details of a “freeze” or spending the resources needed to monitor its implementation.

Unlike a settlement freeze, which freezes a very bad situation, the “Compensation Law” is a step forward. Even if only 10% of the settlers choose to relocate, the Palestinians will, for the first time ever, witness a movement of settlers westward. The US can point to this law as evidence of Israel’s intentions to forego the West Bank, and gain leverage and momentum to move forward towards a comprehensive peace agreement. And last but not least, implementing the “Compensation Law” would greatly ease the difficult task of finally evacuating settlements when Israel does eventually get a peace agreement.