Israel and the Palestinians will never achieve a peaceful, two-state coexistence without a deal over Jerusalem. The Obama administration was right to call on Israel to refrain from building in areas Palestinians claim for a future capital. If that squeezes Israeli Prime Minister Benjamin Netanyahu and his right-wing coalition government, fine. It is about time other countries besides the United States started to address the core obstacles to Middle East peace.
The United States and Israel have spent the past several weeks trying to reduce tensions after a tit-for-tat exchange of diplomatic humiliations. First, the Israelis embarrassed Vice President Joe Biden by announcing during his visit in early March that Israel would build 1,600 new housing units for Jews in east Jerusalem. The vice president, who made the trip to underscore American support for Israel in the hopes of jump-starting peace talks, rightly condemned the move as "precisely the kind of step that undermines the trust we need." Netanyahu was given the cold shoulder last week on his visit to Washington, where U.S. officials took him behind closed doors to urge practicality and restraint. When there is no joint public appearance with the president, that is a clear sign of trouble.
The Obama administration was right to hold its ground. Israel must curb its settlement activity. That is the only way moderate voices of the Palestinian Authority are going to wrest public support away from Hamas and other hard-line groups. Israel should be looking to build confidence on the Palestinian side in exchange for broader, regional guarantees for its security. No one expects a diplomatic breakthrough any time soon — the Palestinians are still split and the Palestinian Authority has a long way go to establish a functional government, economy and civil institutions. But Netanyahu dashed any hopes of even indirect talks. He also undercut America's credibility in the Arab world.
The United States remains a strong ally of Israel. And Washington is doing the heavy lifting on many fronts, such as isolating Iran and working to deny Tehran access to nuclear weapons. But that enduring kinship with Israel should not be a free pass. There is a difference between securing Israel and securing Netanyahu's coalition government. The peace process cannot be a perpetual monologue about who goes first and what deals the parties won't make. The focus needs to be more on the future and less on the past.
The administration should continue working with Israel on a face-saving way to hold off on new settlements. That would give Palestinian moderates some leverage and Arab states political cover to move the peace process along. Israel needs to show some appreciation for America's larger strategic interests. Resolving the Israeli-Palestinian dispute has enormous ramifications for the U.S. ability to fight global terror, curb nuclear proliferation and defuse long-standing regional conflicts. Advancing those goals serves Israel's interests, too. The two nations need to get on the same page, repair their relationship and revive the stalled peace process.