Maybe that's why Netanyahu sounded so tentative on the subject in an interview: "What we've advanced so far is only planning [in E1], and we will have to see. We shall act further based on what the Palestinians do." Israeli officials admitted to the New York Times that the move on E1 was "symbolism against symbolism."
But several European nations took the E1 threat seriously and responded with unusually sharp criticism. Some Israeli insiders claimed that Obama's hidden hand was at work here, too. The American president, they speculated, gave the Europeans "the green light to respond with extreme measures... The European move is essentially an American move." If so, it was all done in private, of course. (The White House publicly denied the claim.)
However Peter Beinart, editor of the Open Zion page at the Daily Beast and author of The Crisis of Zionism, claims administration officials have told him that such behind-the-scenes maneuvering is Obama's new strategy. Publicly, Washington will "stand back and let the rest of the world do the confronting. Once the U.S. stops trying to save Israel from the consequences of its actions, the logic goes, and once Israel feels the full brunt of its mounting international isolation, its leaders will be scared into changing course."
As Beinart suggests, international isolation is what worries Israelis most. A cut-off of U.S. military aid would be troubling indeed but in itself hardly fatal, since Israel already has the strongest military in the Middle East and a sizeable military-industrial-high-tech complex of its own.
What Israel needs, above all, from the U.S. is diplomatic support to protect it from international rejection, economic boycotts, and a diplomatic tsunami that could turn Israel into a pariah state. Political analysts have long assumed that any Israeli leader who loses the protection of the U.S. would pay the price at the polls.
That's why some insiders, like Daniel Kurtzer, former U.S. ambassador to Israel and Egypt, think Obama can "lay down the law" to Israel on E1 -- behind closed doors, of course. The influential Israeli journalist Anshel Pfeffer puts the situation in the simplest of terms: "It is clear who is boss."
Obama's New Diplomatic Weapon
The rules of Israel's political game, however, may also be changing. And that's a key to understanding why 2013 could be the year of confrontation between the leaderships of the two countries. Netanyahu has allied his Likud party with the strongest party to its right, Yisrael Beitenu. To seal his victory in the upcoming election on January 22nd, he's put his political fate in the hands (or talons) of his country's hawks.
If he wins (which everyone assumes he will), he'll have to satisfy those hawks -- and they don't care about shrewd secret bargaining or holding on to allies. What they want, above all, are public displays of unilateral strength made with much fanfare, exactly like the recent settlement-expansion announcement and the accompanying threat to turn E1 into an Israeli suburb. Many observers have suggested that the primary audience was Netanyahu's new, ever-more-right-wing partners. Plenty of them still don't trust him, especially after the ceasefire in Gaza under pressure from Washington.
Most analysts saw the Israeli announcement as a public punishment of the Palestinians for their success at the U.N. The BBC's Kevin Connolly had a different interpretation: Israeli hawks felt that letting the U.N. vote pass without some strong response "would be seen as a sign of weakness."
Israeli political life has always been haunted by a fear of weakness and a conviction that Jews are condemned to vulnerability in a world full of anti-Semites eager to destroy them. The hawks' worldview is built upon this myth of insecurity. It demands instant retaliation so that Jews can show the world -- but more importantly themselves -- that they are strong enough to resist every real or (more often) imagined threat.
To keep the show going, they must have enemies. So they seek out confrontations and, at the same time, "actually welcome isolation," as the venerable Israeli commentator Uri Avnery says, "because it confirms again that the entire world is anti-Semitic, and not to be trusted."
"For the sake of his target voter," writes another Israeli columnist, Bradley Burston, "it's in Netanyahu's direct interest for the world to hate Israelis" and for Obama to be "fed up and furious with Israel. That is, at least until Election Day."
Obama owes the Israeli prime minister nothing after the recent U.S. election season in which Netanyahu practically campaigned for Mitt Romney and publicly demanded that the U.S. threaten an attack on Iran -- a demand that the administration publicly rebuffed. The president might finally be fed up, and so in a mood to ratchet up private pressure on the Israelis.
If Obama is planning to put more heat on them, he will undoubtedly wait until after their election. Then, in the late winter months of 2013, before spring comes and Netanyahu can revive the possibility of an attack on Iranian nuclear facilities, the president might well provoke a showdown.
He has good reason. If he can secure a definitive halt to settlement expansion, he can bring the Palestinians back to the table with a promise to press Israel to negotiate seriously for a two-state solution. In a chaotic region where the U.S. seems to be losing ground weekly, Washington could score sizeable foreign policy points, especially in improving relations with regional powers Turkey and Egypt.
And faced with Netanyahu's new post-election government, Obama would find himself with a new diplomatic weapon in his arsenal. Suppose -- an administration aide might suggest to an Israeli counterpart -- the U.S. publicly reveals that it's allowing, perhaps even pushing, other nations to isolate Israel.
Some Israeli hawks would undoubtedly welcome the chance to proclaim Obama as Israel's greatest enemy and demand that Netanyahu resist all pressure. But Israeli centrists -- still a large part of the electorate -- would be dismayed, or worse, at the thought of losing Washington as their last bulwark against international rejection. The fear that Israel could become a pariah state, blacklisted, embargoed, and without its lone invaluable ally would be a powerful incentive. They'd insist that Netanyahu show flexibility to avoid that fate.
Netanyahu would find himself caught in a political battle he could never hope to win. To avoid such a trap, he might well risk yielding in private to U.S. pressure, with the understanding that the two allies would publicly deny any change in policy and the U.S. would continue to offer effusive public support. (The Israelis could always find some bureaucratic excuse to explain a halt -- even if termed a "delay" -- to settlement expansion.)
Battle on the Home Front
That prospect should be tempting for Obama, but he has domestic political risks of his own to weigh.
There's a common misconception that the administration worries most about "the Jews." The latest polls, however, show 73% of U.S. Jews supporting Obama's policies on the Israeli-Palestinian conflict. Nearly as many want him to propose a specific plan for a two-state solution, even if it means publicly disagreeing with Israel. Nor is there too much reason to worry about Jewish money, since most Jewish contributors to the Democrats are liberals who are pro-Israel but also pro-peace.
Nor are Christian Zionists the big problem. They do have some clout in Washington, but not enough to make Obama fear them.
The administration's main worry is undoubtedly the Republican Party and especially its representatives in Congress. Recent polls by CNN, the Huffington Post, and Pew indicate that Republicans are roughly twice as likely as Democrats to take Israel's side, while Democrats are about five times as likely to sympathize with Palestinians. Men, whites, and older people are most likely to support Israel unreservedly in the conflict.
In the U.S. presidential campaign, Republicans were eager to play on the traditional American belief in Israel's insecurity: an innocent victim surrounded by vicious Arabs eager to destroy the little Jewish state. Obama, the GOP charged, had "thrown Israel under the bus."
But the issue never gained real traction, an indication that the domestic political climate may be changing. Another small sign of change: a relatively weak measure threatening a cutoff of funding to the Palestinians, which in the past would have sailed through Congress, recently died in the Senate.
If Obama and the Democrats come out of the "fiscal cliff" process looking strong, they will feel freer to put real pressure on Israel despite Republican criticism. The more they can keep that pressure hidden from public view, while mouthing all the old "we stand with Israel" clichés, the more likely they are to take the risk.
In such a situation, Israeli right-wingers might well give their GOP allies enough evidence to rip off the mask. Then, Obama would have to speak more candidly to the American people, though his honesty would surely be well tempered with political spin.
Our goal, he might say, has always been to make Israel secure, something long ago achieved. We've ensured that Israel maintains such a huge military advantage over its neighbors, including its Iron Dome missile defense system, that it is now effectively safe from any attack. And we'll continue ensuring that Israel maintains its military superiority, as we are required to do by law.
But now at long last, he would continue, we are showing our friendship in a new way: by bringing Israel and its Palestinian neighbors to the negotiating table so that they can make peace. Israelis shouldn't have to live eternally in a fortress. We refuse to condemn them to that kind of future. We are instead taking steps to help them be free to flourish in a nation that is genuinely secure because it has made peace. Some may call it tough love, but let everyone understand that it is an act of love.
Whether Obama believed such talk or not would hardly matter. Public theater deftly meshed with private diplomacy is the key to peace. And confrontation in 2013 could be the first step on the path toward it.