If the Obama administration goes all the way in its demand for a total settlement freeze, if it stands firm against Israeli emotional blackmail, we may have this week's debacle in Sheikh Jarrah to thank.

The eviction of two Palestinian families from their homes in Arab east Jerusalem where they'd lived for over 50 years, and the takeover of the houses by Israeli zealots intent on "re-Judaizing" the neighborhood, revealed our settlement policy in all its glory. It reminded everyone that the issue isn't houses and zoning, it's justice and decency - or, rather, injustice and indecency.

Secretary of State Hillary Clinton denounced the evictions as "provocative" and a violation of Israeli commitments. In Washington, the State Department called in our ambassador to make the point in person. The Brits, the Swedes, the UN, everybody's up in arms over the spectacle of hundreds of Israeli cops going into an Arab neighborhood of Jerusalem, tossing two Palestinian extended families into the street and protecting the Jewish nutters moving in.

This is what's known as a wake-up call. And it didn't come a moment too soon.

The news, at least around here, is that the Obama administration is getting ready to "blink" in its dispute with the Netanyahu government over settlements. The word is: We showed 'em. They can't tell us to stop "normal life" for Jewish families. They can't tell Jewish mothers to stop having babies. They can't tell us that a Jew can live anywhere he wants in Washington, Paris or London, but not in Jerusalem, the eternal, undivided, indivisible, eternal capital of the Jewish people. AIPAC and the rest of the Israel lobby are finally standing up on their hind legs and telling Obama to lay off. Those self-hating Jews in the White House, Rahm Emanuel and David Axelrod and the rest, are withering under our assault.

Obama's losing altitude over the health care thing. His foreign policy is going nowhere. He's vulnerable. He doesn't want to take on Israel and the lobby now. He'll blink. And we'll build. What was, will be.

I was worried that this consensus wisdom was right, that Obama was getting ready to fold, and I'm still worried. It's not easy to stop the settlement enterprise, especially in Jerusalem, when all of official Israel, along with our friends in Washington, are wailing and gnashing their teeth.

The Netanyahu government, the settlers and their supporters may still prevail. But Sheikh Jarrah hurt them. Those scenes showed what lies underneath all the kitschy slogans about a Jew's right to live anywhere in Jerusalem and a Jewish mother's right to have a baby. It demonstrated the true principle that's animated our settlement policy in Palestinian-populated land since 1967: What's mine is mine, and what's yours is mine, too.

The government is defending the eviction of the two Palestinian families by saying the houses in Sheikh Jarrah, according even to Israeli courts, were owned by Jews before 1948.

That's rich. The two evicted families, the Hanouns and the Ghawis, were given those houses by the UN a few years after they, like tens of thousands of other Palestinians, fled their homes in west Jerusalem during the 1948 war. Since then, west Jerusalem has been all-Jewish.

If Israeli justice in 2009 means restoring pre-1948 Jewish property rights in the Arab east Jerusalem neighborhood of Sheikh Jarrah, what about pre-1948 Palestinian property rights in the Jewish west Jerusalem neighborhood of Baka? Some of those old houses in Baka look pretty "Oriental" to me.

If we're going to evict the Hanouns and Ghawis to "re-Judaize" one side of the Green Line, are we going to evict the Cohens and Levys to "re-Arabize" the other side?

Stay tuned.

Not far away in Sheikh Jarrah is the old hotel that Irving Moskowitz, a great American Jew (he made his fortune running bingo parlors, then moved to Florida) wants to turn into a luxury apartment building for observant Jewish tenants. The government's behind him.

What? A Jewish, democratic state is going to bar Jews from living in eternal Jerusalem? Do you know who that hotel was built for? The mufti! Look at these pictures of the mufti of Jerusalem sitting with Hitler. Hitler! Does that give us the right to move Jews into the neighborhood, or what?

I would like to see Israel permit a rich, devout, nationalistic Palestinian Muslim living in America to come build a luxury apartment building for religious Muslims in, say, Rehavia. Or any other Jewish neighborhood in Jerusalem.

Or anyplace else in this country.

When that happens, Israel will have a case for building Beit Moskowitz in Sheikh Jarrah. Until then, it's just another instance of us planting our flag on the Palestinian's turf, of rubbing their noses in it.

The Americans raked us over the coals for that one a couple of weeks ago. Now there are the two Palestinian families - 53 people in all - being turned out of their homes by Israeli police, who are now guarding the proud Jews settling into their new second home.

If Obama and Co. were getting ready to blink, this should snap their eyes wide open to what's at stake in the battle over the settlements. They'd better keep their eyes wide open until the battle's over - until all settlement is frozen and the land, ultimately, is redivided - or the injustice and indecency may never end.