Vice President Joe Biden's visit to Israel last week was rightly hailed as a catastrophe—but not because of settlements. After a tense year in which Washington had failed to stop Prime Minister Benyamin "Bibi" Netanyahu from settling more occupied land, Biden had come to shore up the relationship. Instead, officials in Netanyahu's government caught both men off guard by announcing plans to build more in contested East Jerusalem. True, that was a snafu. But the real disaster was what it may cost Israel. Biden had come to offer not just friendship, but support (and protection) against Iran—Israel's greatest bogeyman—in exchange for a few concessions from Netanyahu. Instead, he got a finger in the eye.
When President Barack Obama and Netanyahu took office last year, consensus opinion expected a confrontation between the United States and Israel. It was almost a no-brainer—America was moving left as Israel was moving right. Obama's grand design for a new, peaceful, and pro-American Middle East (featuring a new Palestinian state) stood in stark contrast to Netanyahu's long-held support for Israel's control of the West Bank and East Jerusalem. But Netanyahu thought that if he tacked between his rightwing coalition—committed to expanding settlements in the West Bank and moving more Jews into East Jerusalem—and Obama's desire for peace talks, he could keep U.S. support against Iran and even start from scratch with the Palestinians. And until last week, Netanyahu seemed to pulling it off: he got indirect talks with the Palestinians in return for a limited and temporary settlement freeze that excludes East Jerusalem. His coalition survived intact. And his public popularity skyrocketed to 50 percent in February—which Israelis knew only in the Ariel Sharon period (while Obama's approval ratings plummeted).
Then Biden came to town. On the face of it, this was just about assuring Israelis, directly and in their own country, about America's love and support. It seemed like good politics in a tough election season back home, and Biden was a natural choice as messenger: alone in the high echelon of the Obama administration, the veep—an old-line Zionist—has come to consider "Bibi" as a close personal friend over a three-decade acquaintance. If anybody could reach out to Netanyahu, it was the former senator from Delaware.
Biden's trip had a deeper motive, though. He was there to offer Israel a deal: we'll support you on Iran—keeping "all options on the table"—in return for Israeli flexibility in the West Bank. Obama would continue flogging sanctions relentlessly (he had made some of his own concessions to obtain sanctions support from allies) and refuse to discount the possibility of force. Or, in Biden's more diplomatic lingo during a speech at Tel Aviv University: "We are determined to keep the pressure on Iran so that it will change its course. And as we do, we will also be seeking to improve relations between the Israelis and Palestinians. They are connected indirectly, but there is a relationship."
The settlements-for-Natanz idea (a reference to Iran's uranium-enrichment facility) has been around for a while. And it makes good sense: if Israel views Iran's would-be nukes as the gravest existential threat ever, and if Israel needs American support in confronting the threat, then it should give America something in return. That logic is how Netanyahu got his right-wing political partners to agree on a partial settlement freeze in November—against their beliefs. The freeze coincided with an upgrade in American-Israeli security cooperation. Biden simply made the linkage more explicit.
This is not a new idea. Time and again, Israel has traded peace concessions for security support. It started in 1949, when President Truman demanded a halt of the Israeli invasion of Egypt, in exchange for the armistice talks, which embedded Israel into the Middle East. It moved on with Israel's Sinai withdrawal—after the 1956 war—in return for security guarantees from the Eisenhower administration. In 1974, Israel disengaged from Egypt and Syria in return for the American resupply airlift during the 1973 Yom Kippur War. The most recent agreement began after the first Gulf War in 1991, when Israel agreed at the Madrid Peace Conference to a comprehensive land-for-peace process in return for American deployment of antimissile batteries during the war. The idea of foregoing the settlements for protection from Iran—as Biden was suggesting—is just an extension of that understanding.
But with the settlement announcement timed to embarrass Biden, Israel seemed to be casting aside that deal. For Obama and his inner circle, it brought back memories of Bibi's first term, during the Clinton years, when he appeared as an untrustworthy spoiler of peace, despite commitments from his predecessor. So the president decided on a showdown. As Biden's plane left the Israeli airspace, Washington launched a multichannel diplomatic offensive: Secretary of State Hillary Clinton chewed out Netanyahu by phone and made the conversation public so he couldn't brush it aside, and top aides like David Axelrod flooded the Sunday talk shows to decry the "affront." The idea was to shame Israel into accepting Biden's bargain.
Thing is, it's not working. Netanyahu apologized for the "bad timing" of the housing announcement, but he vowed to keep building in East Jerusalem. Knowing that concessions in the disputed city could bring down the Israeli coalition, Obama was asking Netanyahu to choose between American support or his right-wing political partners.
And Netanyahu turned right. He rallied American Jewish groups against the administration's "dressing down," anticipating a warm welcome at the AIPAC annual conference next week in Washington. His ambassador in Washington called the crisis "the worst in American-Israeli relations since 1975," when then–secretary of state Henry Kissinger announced a "reassessment" of the relationship. And even Netanyahu's key coalition member from the center-left, Defense Minister Ehud Barak, backed the prime minister, securing the prime minister's political position at home.
So now it's down to a high-stakes test of wills: will Netanyahu, following his show of partisanship, concede on settlement building—or will Obama back down under the pro-Israel-lobby pressure? Isolating Israel could push it to attack Iran's nuclear plants. But caving to Israel could strengthen anti-American feelings throughout the Middle East. It's not clear who will blink first, but it's obvious that, where once there was an understanding, today there is only a contest.
Benn is the editor-at-large of Haaretz.