In the week immediately following VP Biden?s visit to Israel and the firestorm of controversy over the announcement of 1600 new settler housing units in occupied East Jerusalem, tensions between the US and Israel bubbled over in a most unusual manner. Administration officials, including Sec. Clinton, used language normally reserved for the likes of Iran and North Korea in order to emphasize how appalled they were at the brazen defiance. Both sides quickly developed a strong interest in containing and then reducing tensions once the United States had made its point crystal clear, and both Pres. Obama and PM Netanyahu moved quickly to do so. However, Israel was required to provide what are apparently substantial and significant assurances to the United States in private and, it would seem, in an unpublished and unreleased written document as well. Since Special Envoy Mitchell has invited Netanyahu to meet with the President tomorrow during his trip to Washington, obviously the American side is satisfied with whatever climbdown it has received from the Israelis. This is worth considering in some detail, especially from a Palestinian point of view.

First of all, it seems clear that given the outrage and exceptionally strong language coming out of Washington that the Obama administration would not have simply let the matter pass. Israel was going to have to earn release from the rhetorical doghouse. So in spite of skepticism, both logic and the known facts indicate strongly that whatever assurances Israel has provided to Washington are substantial and significant. I think many people are somewhat confused about what exactly has been at stake, and therefore are misreading this development as some kind of victory or successful defiance by Netanyahu.

Settlements were indeed the central issue between the US and Israel for many months, especially in the early fall of 2009. However, after his meetings with both Netanyahu and Pres. Abbas at the UN in October, Pres. Obama made it clear that while the United States was not satisfied with Israel?s positions or the partial, temporary and, it is now clear, largely fraudulent settlement moratorium, nonetheless Washington wanted to move on to the reestablishment of permanent status negotiations rather than continuing to be mired in the settlement conundrum. What became clear as Washington attempted and failed to get Netanyahu to agree to a complete settlement freeze is that beyond his own personal and ideological inclinations, it is unlikely that his cabinet would survive any such step and therefore there is no chance under the present circumstances that he is going to take it. They were asking for something they really couldn?t get, and when they realized that they decided to keep the issue on the table but prioritize something else.

It was at this stage that Palestinian reluctance to return to permanent status negotiations for a complex set of diplomatic, practical and political reasons became a defining feature of international perceptions and began to really harm Palestinian standing in the United States and the rest of the West. Netanyahu was able to skillfully deploy this reluctance in order to paint himself as ?the one who made positive gestures and who wants to get back into talks right away,? and the Palestinians as ?the ones who say no.? The political problem for the Palestinians was that they really didn?t have anything substantial and meaningful to show their public to justify a return to negotiations in spite of the lack of a settlement freeze. Hence the idea of proximity talks, Arab League permission and other indecorous measures designed to ease the PLO back into talks in spite of the attendant grave political difficulties. But there were other more practical and serious diplomatic problems with the idea of getting back into permanent status negotiations, even proximity talks, without any preconditions. The obvious, rational and legitimate Palestinian fear is getting back into a peace process that is all process and no peace, and that drags on indefinitely without any significant progress while settlement construction continues apace and the borders of Palestine become increasingly difficult to conceptualize, let alone determine.

Therefore, the biggest sticking point from a practical and diplomatic point of view to a resumption of negotiations in recent months has been the lack of adequate terms of reference for the negotiations that would define exactly what Israelis and Palestinians are talking about. On this point too, as with a settlement freeze, the Obama administration basically sided with the Palestinians in theory and the Israelis in practice, in that they have been pushing for terms of reference, assurances and other structures that would give the negotiations substantive meaning, but urging the parties to return to talks even if the topics were not clearly defined because Israel preferred keeping everything as vague as possible. One can understand this politically from Netanyahu?s point of view: getting into a negotiation with the Palestinians about the future of Jerusalem is probably more politically dangerous for him than any notion of a settlement freeze. On the other hand, any negotiation that doesn?t include core permanent status issues like Jerusalem are unlikely to be meaningful. And, there is a grave danger for him that should talks restart and the Palestinians prove forthcoming, constructive and clever, the colossal distance between his position and that of the Obama administration, and what may be a fundamental incompatibility between the two, will become increasingly clear. There is a real and extremely dangerous possibility for him to emerge as being perceived by all parties as the main problem once permanent status talks really get going. Demagoguery on Jerusalem might be good politics in Israel, but it?s potentially disastrous diplomacy, if the Palestinians and the other Arabs don?t provide endless ways of avoiding the topic.

It seems pretty clear that whatever the Israelis have agreed to involves, if not detailed and constructive terms of reference as such, at least putting all permanent status issues, including Jerusalem, on the table for upcoming proximity talks. This is, and should be seen as, a huge gain for both the Obama administration and the Palestinians and an eventuality that Netanyahu was trying very assiduously to avoid. In some sports this sort of thing is called an ?unforced error,? in which the blunder of one side strengthens the position of the other without the advantaged party actually having to do anything. The bottom line is this: before the Biden-settlements fiasco, the Palestinians were willing although extremely reluctant to go back into proximity talks without a clear agenda or terms of reference. Now, it?s clear that they will be able to go into them with much more satisfactory arrangements from their perspective. It seems to me one of the few ways to badly mishandle this would be to sulk and refuse to reengage the talks they had already agreed to. Clearly this is a gain to be pocketed and built upon, not squandered.

Other aspects of the US-Israel understanding reached last week appear to include some kind of easing of the blockade of Gaza, which is morally urgent and which should politically benefit the PA, which will have achieved it, rather than Hamas. In any event, the siege plainly benefits Hamas politically, and is the principal factor in the slow evolution of what is increasingly looking like a totalitarian theocracy in the Strip. Almost any opening to the outside world should weaken or slow that lamentable process. So, that?s also a good thing, and without this confrontation, it probably wouldn?t have happened either.

The most difficult subject, of course, is the problem of the settlements themselves. It?s especially tricky because on this issue the politics and diplomacy are particularly murky, as is the nature of the understanding arrived at last week. Clearly as long as he is working with this group of coalition partners, and possibly under any circumstances, Netanyahu is not going to countenance a meaningful and thorough settlement freeze, and certainly not in Jerusalem. But it?s also clear that the Obama administration is serious about its categorical opposition to increased settlement construction, including in Jerusalem, especially in Arab neighborhoods in occupied East Jerusalem. Therefore, it?s extremely difficult to read the reputed ?don?t ask, don?t tell? arrangement on Jerusalem settlements. Will it in practice mean that Israel reserves the right to colonize East Jerusalem, and may even plan settlement activity, but in reality not conduct any, unless specifically approved by Washington? Or will it mean that settlement activity in East Jerusalem goes ahead as planned, but remains unannounced? My guess is that the reality is something in between the two, that Netanyahu publicly insists colonization will continue in East Jerusalem, but assures the Obama administration that it will be very limited and close to zero in practice. However, if this is true, I?m sure he and his bureaucrats will try to ?cheat? as much as they can within this framework. I?m also very skeptical that any aspect of this understanding made it into the reputed written document.

Of course this is not satisfactory from the American, international and especially Palestinian perspective. However, it too is useful in that it places Israel settlement activity, especially in East Jerusalem under an even more powerful microscope than it already has been. And, it increases sensitivity in Washington to the problem. In other words, Israeli colonization of East Jerusalem is not just a Palestinian or Arab problem now, it?s become an American problem as well, and that is a serious complication for any Israelis who want to preserve political relationships with the Obama administration. So I think all in all this has been exceptionally useful from a Palestinian perspective, for the following reasons:

1) the proximity talks are now structured in the way Palestinians have wanted, not on Israeli terms;

2) any easing of the siege on Gaza is a good thing morally and politically;

3) settlement activity, especially in East Jerusalem is going to be more politically difficult and costly for Israel after this.

Obviously, this is far short of a settlement freeze, and serious progress on peace is really going to require that. However, I don?t think anyone should fail to note the gains, albeit limited, the Palestinians have been able to extract from this US-Israel confrontation. The main thing now is to build on and not squander them.