President Obama met with Israeli Prime Minister Benjamin Netanyahu at the White House on Tuesday amid new signs that the two remain deeply divided over continued Israeli construction in disputed East Jerusalem.
In their first face-to-face meeting after months of tension, Obama was expected to press Netanyahu for action to ensure that Israeli housing plans do not endanger peace talks.
U.S. officials seeking to end the standoff are not asking Netanyahu to halt construction, a step he has refused to take. Instead, they have asked him to avoid announcements of new projects, which infuriate Palestinians and imperil peace talks. The U.S. approach has been described as "don't ask, don't tell."
But Netanyahu said before going to the White House that he cannot meet demands that he control disclosures of new housing projects.
In meetings on Capitol Hill, Netanyahu displayed charts to argue that the Israeli zoning process involves so many agencies that his office can't prevent provocative disclosures, congressional aides said.
A disclosure March 9 during a visit by Vice President Joe Biden, involving a 1,600-unit project in East Jerusalem, enraged Palestinians, drew condemnation from U.S. officials and jeopardized a new round of planned peace talks.
Israeli officials said Netanyahu told congressional leaders that the Palestinian demand for a complete halt to Israeli settlement growth was an "illogical and unreasonable demand" that could delay talks by another year.
Although U.S. and Israeli officials appear to be working to end the dispute, a senior Israeli official said terms of any agreement will not be spelled out publicly.
The Obama-Netanyahu meeting capped a high-stakes diplomatic dance that brought U.S.-Israeli relations to their lowest point in decades.
With both sides eager to put the affair behind them, they tried to portray the dispute as a disagreement between friends, allowing both Obama and Netanyahu to save face by clinging to their original positions over the appropriateness of Jewish construction in mainly Arab East Jerusalem.
Theoretically, that should allow them to focus on areas of agreement, such as the need to relaunch Israeli-Palestinian peace talks and a joint response to the Iranian nuclear threat. But the tussle has left ill feelings on both sides that are likely to shape relations throughout the Obama administration, analysts said.
"There's a crisis of trust," said Jonathan Rynhold, political science professor at Bar-Ilan University in Israel. "That's more of a crisis than the substantive issue."
According to Rynhold, Netanyahu fears the Obama administration has shifted the U.S. to a more pro-Palestinian position and hasn't appreciated the concessions Netanyahu has already made, such as endorsing a two-state solution and restricting West Bank settlement growth for 10 months.
The Obama administration, on the other hand, feels burned by Netanyahu's "game playing," Rynhold said, and questions whether it can rely on Netanyahu's government as a partner in the peace process.
The turning point in the crisis came in a letter last week from Netanyahu to U.S. Secretary of State Hillary Rodham Clinton. The complete contents have not been revealed, but it is believed to have offered concessions, such as promises to release Palestinian prisoners and ease the blockade of the Gaza Strip.
Many in Israel also believe it contained secret assurances that Netanyahu would strive to limit future housing projects in Arab-dominated areas of East Jerusalem and minimize publicity about other sensitive construction.
It remains unclear whether any recent actions would lure Palestinians back to talks.
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