Yesterday Pres. Obama gave the first clear indication of exactly where he stands in disputes embroiling the administration on how to go forward with Middle East peace in the context of the standoff with PM Netanyahu over settlements in Jerusalem. The President said that resolving the conflict is a “vital national interest of the United States,” and, echoing points made with varying degrees of emphasis by Gen. Petraeus, Adm. Mullen and Sec. Gates, very significantly added that such conflicts are “costing us significantly in terms of blood and treasure.” These are unprecedented comments from this or any other US president, and reflect the shift in the context of US-Israel relations and the new way in which Israeli policies are perceived in Washington, about which I have been writing for many months.

Please note that neither the President nor any of his aides are saying, as is sometimes wrongly suggested, that Israel or Israeli policies are threatening American security or American lives. But what they are saying is that the lack of peace, the continuation of the conflict and the occupation are serious strategic problems for the United States throughout the Arab and Islamic worlds, including in Afghanistan and Iraq and with regard to Iran. The bottom line is that Israeli policies are no longer viewed primarily as either simply a matter of bilateral relations between Israel and the United States or functions of domestic American political considerations, as they sometimes have been in the past. Instead, they are increasingly being placed in a much broader context that gives them a very different significance and implication.

The long-standing debate over “linkage” is over: not only is linkage firmly established as a real and crucial phenomenon in the eyes of Washington, linkage is not simply being identified between one or two strategic issues, but many. Because of its symbolic resonance and political significance, the Israeli-Palestinian conflict and the occupation are rightly seen by the administration as linked to almost everything the United States wants to achieve in the Arab and Islamic worlds. This has created a new and extremely significant dilemma for Netanyahu, and is the context of the present standoff between the two governments.

The President’s message is unambiguous but multivalent. It is aimed at multiple audiences for multiple purposes.

First, obviously it’s a message to Israel, the Palestinians and the Arab states that the United States is absolutely determined to achieve a peace agreement because it does not consider this optional, but regard it as essential to “vital” US national security concerns. The more the stonewalling from the parties continues, the more the Obama administration seems determined to express the depth of its commitment to doing something about this, not for moral or even political reasons, but for essential and unavoidable strategic considerations.

The President’s reference to “blood and treasure” is aimed, I think mainly, at the Congress. On Saturday I wrote that the name of the game in Washington now is the President keeping hold of his support in Congress, especially among well-placed pro-Israel Jewish Democrats. Thus far, he has been successful, which is one of the main reasons Netanyahu ducked out of the nuclear terrorism conference this week. I think the message is being sent to members of Congress who might be tempted to waver in their support for Obama is that the President is unequivocal that this is an issue of vital national security interests. It involves, ultimately, the lives of US soldiers. It is not a matter for political games, grandstanding or pandering. He’s drawing a line in the sand and saying: we need this as a country, now stick with me. And, of course, he’s right.

The final target audience are the factions within his own administration who have been feuding, in some cases publicly, as well as seriously debating how to move forward in the context of recalcitrance by all the parties — Israel, the Palestinians and the Arab states — as well as the current standoff with the Netanyahu cabinet. No one now need wonder where the President stands. He has made that abundantly clear.

Of all of these, Congress is probably the most important audience at the moment. It comes in the context of the first glimmers of real pushback from the legislative branch, most notably a letter sent two days ago from most senators to Sec. Clinton that was essentially boilerplate, but which seemed to put the onus for resolving the standoff on the administration. In and of itself, it doesn’t signify much of anything, and I don’t think it greatly annoyed the administration, but I do think that it — along with several other efforts by pro-Israel organizations, most recently a letter from World Jewish Congress chief Ronald Lauder questioning US commitment to Israel’s security — helped prompt these extremely strong comments from the President. His remarks were buttressed by an exceptionally robust statement of US commitment to pursuing a negotiated agreement from the US deputy permanent representative to the United Nations before the Security Council also on Wednesday. Obviously, the administration’s present purpose is clarity, and making sure everybody understands this is not business as usual, that Washington is not backing down, and that it does not feel it has the option of walking away.

I have been writing and speaking about this shift of context for US-Israel relations and the peace process given the new conceptualization of regional dynamics and networked linkage for many months now, employing the analogy of a kaleidoscope in which, when one piece of the puzzle moves, the entire pattern rearranges itself. It’s becoming clearer that this is indeed a widespread perspective shared by the administration at the highest possible levels, as well as a consensus in the foreign policy establishment. It’s also clear that the Israeli-Palestinian conflict is generally perceived to be at the center of that pattern of interdependent strategic dynamics, because of its tremendous political resonance. In other words, what happens in Palestine can affect what happens in Iraq, but not so much vice versa. What happens in Palestine can affect what happens even in Afghanistan, but not so much vice versa. What happens in Palestine has much more impact on what happens in Iran than the reverse, unless of course there was some kind of regime change via the green movement or some other force. Even then, it might still be the case that what happens in Palestine has, in general, more impact in Iran than vice versa. And, it’s also important to note, that more even than the wars in Iraq and Afghanistan, it is the problem of Iran and its nuclear weapons program that dominates administration concerns in the Middle East at the present time.

But none of this should be overstated. The American commitment to Israel’s security is unshaken and unshakable. The special relationship, which has this commitment at its center, operates at a level beyond such political disputes. This doesn’t and indeed cannot change that. In addition, it’s important to state again that the administration’s concern is the lack of peace, which it blames on the parties generally and not just Israel. Arabs or any others who are enjoying some kind of schadenfreude at Israel’s, or at least Netanyahu’s, expense should be bracing themselves for their own dose of tough love, or possibly even just toughness, from the administration as soon as the standoff with Netanyahu is resolved, and possibly even before that.

Many supporters of Israel are understandably concerned about the new way of looking at these issues in Washington and within the administration, the confrontation over settlements in Jerusalem, and the implications of the President’s statement and those of other administration officials. But they should understand that Administration attention is focused on this issue now in large part because of its concern about Iran and its efforts to craft a workable policy on that issue, which is also the central concern for the Israelis. Moreover, a negotiated peace agreement is not only a vital American interest for Israel and the Palestinians to reach a negotiated peace agreement at the soonest possible date, it’s also indispensable for Israel’s interests. In fact, although the present Israeli government doesn’t act like it, it’s even more important for Israel than it is for the Americans. Whatever the settlers and their supporters, and the rest of the extreme Israeli ultra-right, might think, Obama is advancing, not threatening, Israel’s most vital national interests. Until now he has retained strong support in the Jewish community and among the most important Jewish members of Congress. It’s important for everyone that he retains this support, and he’s just given the strongest possible argument to the lawmakers for that: the lack of a peace agreement is costing the United States not only treasure, but blood.