JUST in case he had any illusions that the Israeli government has any interest whatsoever in supporting a new Palestinian peace initiative, on the very day of his re-election, president Obama received a slap in the face from Premier Benjamin Netanyahu.
Even as the echo of the victory cheers of the president’s supporters were still dying away, the Israeli housing ministry announced that it had issued tenders for nearly 1300 new housing units, to be built illegally in East Jerusalem and the West Bank.
There can be little doubt that this was a calculated affront to the Obama administration. The Israeli leader and the US president have had a series of stormy face-to-face and telephone encounters. It is clear there is no love lost between the two men. But what does this outrageous Israeli move presage for Obama’s Middle East policy in the next four years?
Israel matters to Washington in two key areas, Iran and Palestine. Iran is the most obvious and arguably urgent issue. Netanyahu has made it clear that he wants to take pre-emptive action against Iranian nuclear facilities, where he is certain Tehran is working on the construction of an atomic weapon. Israeli warplanes have launched such attacks before. In 1976 they destroyed Iraq’s French-built Osiris reactor and in 2007 mounted a similar devastating raid against a Syrian facility.

On both occasions, analysts concluded that the attacks could not have been launched without US cooperation. However there is no guarantee that Israel will need similar support for an assault against Iran. It has developed its own advanced satellite and targeting capability, if not using technology actually provided by the United States during the Bush presidency, then know-how that has been stolen from its American ally, in a reprise of the 1987 Jonathan Pollard spying scandal.

Obama is not about to supply any assistance to Netanyahu for an Iranian strike. He is set upon a combination of tightening sanctions and the implied offer of direct negotiations, to persuade the Iranians to honor their obligations as a signatory to the treaty empowering the International Atomic Energy Agency. Israel’s saber-rattling may be a useful substitute for direct US military threats, but Obama wants the Israelis to do nothing more.

He does however have other leverage. SinceIsrael’s establishment in 1948, America has given the country no less than $ 115 billion in bilateral aid, mostly for military purposes. He himself approved a further $ 3 billion package for next year. Yet blocking that payment may not keep Netanyahu in check. If Israel attacks Iran, the repercussions could well endanger the Israeli state, and the strong Jewish lobby in the United States would not tolerate Washington abandoning its support for the country.

It is, however, just possible that threats to delay or withdraw US financial support could persuade the Israelis to postpone further illegal settlement plans and at least pretend, that they would re-enter talks on a Palestinian settlement. Moreover, if Iran’s pro-Palestinian stance is real, then allowing the IAEA inspectors in to see what Tehran insists is its peaceful nuclear program, would defuse a dangerous situation and at the same time make Israel vulnerable to US financial pressure over Palestine.
The greatest achievement of Obama’s second term, arguably the greatest achievement of any recent US president, would be achieving a just settlement for the Palestinians. With Netanyahu seemingly certain to hold on to power in next January’s Israeli general election, even agreeing on a resumption of negotiations, the precondition of which would be a halt to illegal settlement building, let alone finding a lasting end to the agony of all Palestinians, seems a tall order indeed.

Yet it is still hard to believe that Obama was merely speechifying when he made his epic speech in Cairo in 2009. His words carried real conviction. He may not have appreciated how intractable was the opposition that he faced, not just from Netanyahu but from powerful lobbyists in his own country. But he really did sound like a man who meant what he said. And if, as the US economy carries on healing, he decides to refocus his administration on the Middle East and Palestine in particular, there will still be many in our region, who despite their bitter disappointment at his failures over the last four years, will nevertheless be prepared to give Obama the benefit of the doubt. The president has four years left, occupying the most powerful position in the world. He has the opportunity, with wisdom and influence, to transform the future of the Palestinians. He should not let the chance slip through his fingers.