The last American president to openly challenge Israel on settlements was George H.W. Bush and we commend President Obama for demanding that Israel halt all new construction. The controversy must not obscure Mr. Obama’s real goal: nudging Israel and the Palestinians into serious peace negotiations.

Mr. Obama and his negotiator, George Mitchell, have focused on settlements after prying loose a commitment — highly caveated — from Prime Minister Benjamin Netanyahu to a two-state solution. The Palestinians insist they won’t return to talks until all construction halts. The Americans have decided that a freeze is needed to show Palestinians and other Arabs that Israel’s conservative government is serious about peace.

Less visibly, but we hope just as assertively, the administration is pressing the Palestinians and other Arab leaders to take concrete steps to demonstrate their commitment to a peace deal. Those must clearly contribute to Israel’s sense of security.

Unless all sides deliver — the Palestinians, Arabs and Israelis — Mr. Obama’s credibility and the credibility of the peace process will be undermined.

The ultimate question of who controls which land will have to be resolved at the peace table with border negotiations and land swaps. Right now, some 300,000 Israeli settlers live in the West Bank; 200,000 in East Jerusalem. And the continued expansion of Israeli settlements has led Palestinians to doubt they will ever be allowed to build a viable state. The issue has also given Arab states a far too convenient excuse for inaction.

While Israeli governments have repeatedly promised to halt settlement activity — and no new settlements have been approved in nearly two decades — existing ones have continued to mushroom with government incentives. According to Americans for Peace Now, an activist group, 4,560 new housing units were built when Ehud Olmert was prime minister. Mr. Netanyahu has rejected demands for a freeze and insisted that “natural growth” (to accommodate births) must be allowed.

Under pressure from Washington, Mr. Netanyahu’s government has dangled a possible compromise: a temporary freeze in new construction, as long as 2,500 units now in process can be completed and Arab East Jerusalem is exempt. It is a weak offer.

While they press the Israelis, Mr. Obama and Mr. Mitchell are also asking the Palestinians and Arab states to do more. They are insisting that the Palestinians work harder to prevent incitement against Israel in schools and the media. They have asked Arab states — notably Saudi Arabia, Egypt and Syria — to signal the beginning of an acceptance by allowing Israel to fly commercial planes through Arab airspace or open government commercial offices in their capitals. They are also pressing Arab states to provide more aid for the fragile government of the Palestinian president, Mahmoud Abbas.

President Obama and Mr. Mitchell claim they are making progress, but so far there is little sign of it. Saudi Arabia, which has pushed Washington hard to revive negotiations, has been especially resistant. Mr. Mitchell would do well to remind them that a prolonged stalemate will only feed extremism across the region.

Israeli leaders do not often risk being at odds with an American president, but polls show broad support for Mr. Netanyahu’s resistance. President Obama, a skilled communicator, has started a constructive dialogue with the Islamic world. Now he needs to explain to Israelis why freezing settlements and reviving peace talks is clearly in their interest.