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In the Middle East, Obama's failure to act is becoming disastrous. Image Credit: AP

Washington: President Barack Obama on Wednesday denied a crisis was rocking US-Israeli relations, as one of the worst rows in years between the allies rumbled on over new homes for Jewish colonisers.

Obama's first public comments on the showdown came as his administration awaited a response from Israeli Prime Minister Benjamin Netanyahu about Washington's sharp complaints over the episode.

The president was asked in an interview with Fox News if there was a "crisis" in US-Israeli relations after the announcement on 1,600 new colony homes in Occupied Jerusalem embarrassed Vice-President Joe Biden during a visit to the Jewish state.

"No," Obama answered. "We and the Israeli people have a special bond that's not going to go away.

"But friends are going to disagree sometimes... there is a disagreement in terms of how we can move this peace process forward."

Obama noted that the announcement on the new colony homes last week was the work of the Interior Ministry in Israel and that Netanyahu had apologised.

And he called on both Israelis and Palestinians to "take steps to make sure that we can rebuild trust."

The New York Times meanwhile reported that the White House was considering proposing a US plan to form the basis of Israeli-Palestinian negotiations as US officials questioned the commitment of Netanyahu's government to peace talks.

Should Obama present his own proposal, complete with territorial maps, it would likely not take place until his special envoy to the Middle East, George Mitchell, had engaged in several months of US-brokered indirect "proximity" talks between the two sides, the Times said.

Secretary of State Hillary Clinton meanwhile headed to Moscow, for a meeting of the international quartet on Middle East peace talks, without holding an expected telephone call with Netanyahu.

"We're still looking forward to a response. It hasn't happened yet. There hasn't been a call yet," Mark Toner, a State Department spokesman, told reporters after Clinton's departure.

With nightfall in Occupied Jerusalem and Clinton flying to Moscow on her US Air Force plane, which has good phone connections, there was no sign the call would happen Wednesday despite officials' earlier insistence otherwise.

Netanyahu did speak overnight, however, with Vice-President Biden, the prime minister's office in occupied Jerusalem said.

A White House aide would only say that the call was part of "ongoing negotiations."

In a previous call last week, Clinton told Netanyahu that Israel's treatment of Biden sent a "deeply negative signal," just as Washington had persuaded Palestinians to join indirect "proximity" peace talks.

She said Tuesday Washington was engaged in "very active consultation" with the Israelis over steps that would demonstrate the requisite commitment getting peace talks on again.

Earlier, the Israeli government showed no sign of backing down on the wider issue of Jewish colonists, even if it welcomed US assurances that its bond with the United States was safe following the row.

Foreign Minister Avigdor Lieberman said demands for a halt to building homes for Jewish colonizers in mostly-Arab occupied east Jerusalem were "unreasonable."

The row erupted when Washington, frustrated by the lack of success for its peace brokering, reacted angrily last week to an Israeli announcement that the new homes for Jewish colonizers would be built in Occupied Jerusalem, the mainly Arab half of the Holy City that was annexed after being captured in 1967.

Mitchell decided to cancel a planned trip to meet Israeli and Palestinian officials until after Clinton joins her quartet partners Russia, the United Nations and the European Union in Moscow on Thursday.

The US envoy had been scheduled to visit the Middle East at the beginning of the week.

The State Department said Mitchell first delayed his visit to give Netanyahu time to respond to the US concerns on settlements, but then said logistics were the reason the envoy canceled plans to visit the Middle East this week.

It gave no date for when the talks will occur.

Netanyahu is due to visit the United States next week to speak at a meeting of AIPAC, the pro-Israel lobby.

US-Israel cooperation feast:

How broad is the US-Israeli cooperation?

The US and Israel are engaged in extensive strategic, political and military cooperation. This cooperation is broad and includes American aid, intelligence sharing and joint military exercises. American military aid to Israel comes in different forms, including grants, special project allocations and loans.

How powerful is the Israeli lobby in the US?

In their 2007 book “The Israel Lobby and US Foreign Policy”, John Mearsheimer, professor of political science at the University of Chicago, and Stephen Walt, professor of international relations at the Kennedy School of Government at Harvard University, describe the Israeli lobby as a “loose coalition of individuals and organisations who actively work to steer US foreign policy in a pro-Israel direction.”

The authors argue that although “the boundaries of the Israel lobby cannot be identified precisely”, it “has a core consisting of organisations whose declared purpose is to encourage the US government and the American public to provide material aid to Israel and to support its government’s policies, as well as influential individuals for whom these goals are also a top priority.”

What sets the Israel Lobby apart is its extraordinary effectiveness. According to Mearsheimer and Walt, the “loose coalition” that makes up the Lobby has “significant leverage over the executive branch,” as well as the ability to make sure that the “Lobby’s perspective on Israel is widely reflected in the mainstream media.” They claim that AIPAC in particular has a “stranglehold on the US Congress,” due to its “ability to reward legislators and congressional candidates who support its agenda, and to punish those who challenge it.”

The two authors decry what they call misuse of “the charge of anti-Semitism,” and argue that pro-Israel groups place great importance on “controlling debate” in American academia

How did the US presidents behave towards Israel?

Truman Administration:

The US, under President Harry Truman, became the first country to extend de facto recognition to Israel, 11 minutes after it unilaterally declared itself independent.

Eisenhower Administration (1953-1961)

The US provided Israel with moderate amounts of economic aid, mostly as loans for basic food stuffs. Eager to increase its influence in the region, and prevent Egyptian President Jamal Abd Nasser from going over to the Soviet Bloc, US policy was to remain neutral and not become too closely allied with Israel.

Kennedy and Johnson Administrations (1961–1969)

During Lyndon B. Johnson’s presidency, US policy shifted to a whole-hearted, but not unquestioning, support for Israel. In 1968, with strong support from Congress, Johnson approved the sale of Phantom fighters to Israel, establishing the precedent for US support for Israel’s qualitative military edge over its neighbors.

Nixon and Ford Administrations (1969–1974)

President Nixon ordered the full scale start of a strategic airlift operation to deliver weapons and supplies to Israel during the October 1973 War. It was called “the airlift that saved Israel.”

Carter administration (1977–1981)

The Jimmy Carter years were characterized by very active US involvement in the Middle East peace process, and, as a consequence, led to some friction in US-Israeli bilateral relations. President Carter’s support for a Palestinian homeland and for Palestinian political rights created additional tensions with Israel.

Reagan administration (1981–1989)

President Ronald Reagan’s personal support for Israel and the compatibility between Israeli and Reagan perspectives on terrorism, security cooperation, and the Soviet threat, led to considerable strengthening in bilateral relations.

In 1981, Secretary of Defense Casper Weinberger and Israeli Minister of Defense Ariel Sharon signed Strategic Cooperation Agreement, establishing a framework for continued consultation and cooperation to enhance the national security of both countries. In November 1983, the two sides formed a Joint Political Military Group, which meets twice a year, to implement most provisions of that agreement. Joint air and sea military exercises began in June 1984, and the United States has constructed facilities to stockpile military equipment in Israel.

US-Israeli ties strengthened during the second Reagan term. Israel was granted “major non-NATO ally” status in 1989 that gave it access to expanded weapons systems and opportunities to bid on US defense contracts. The United States maintained grant aid to Israel at $3 billion annually and implemented a free trade agreement in 1985. Since then all customs duties between the two trading partners have been eliminated.

Bush administration (1989–1993)

The centerpiece of the Administration was to work on achieving an Arab-Israeli treaty based on the territory-for-peace principle and the fulfillment of Palestinian rights.”

Secretary of State James Baker said that Israel should abandon its “expansionist policies.”

Clinton administration (1993–2001)

President Bill Clinton announced that the United States and the PLO would reestablish their dialogue.

President Clinton offered $100 million in aid for Israel’s anti-terror activities, another $200 million for Arrow anti-missile deployment, and about $50 million for an anti-missile laser weapon.

President Clinton disagreed with Prime Minister Benjamin Netanyahu’s policy of expanding Jewish settlements in the occupied territories, and it was reported that the President believed that the Prime Minister delayed the peace process.

Bush administration (2001–2009)

President George W. Bush and Israeli Prime Minister Ariel Sharon established good relations

In 2003, the US provided Israel with $9 billion in conditional loan guarantees made available through 2011.

All recent US administrations have disapproved of Israel’s settlement activity as prejudging final status and possibly preventing the emergence of a contiguous Palestinian state. President Bush, however, noted the need to take into account changed “realities on the ground, including already existing major Israeli population centers,” asserting “it is unrealistic to expect that the outcome of final status negotiations will be full and complete return to the armistice lines of 1949.”

Why are US-Israeli economic ties so strong?

The cornerstone of the vibrant US-Israel economic relationship is the 1985 Free Trade Agreement (FTA), the first FTA ever signed by the United States. Over the last 20 years the FTA has enabled a sevenfold expansion of bilateral trade. Israel has become one of the largest trading partners of the US in the Middle East and Israel’s prime export destination is the United States.

Do all Israelis support the special bonds with the US?

No. In an op-ed published in Haaretz on Thursday, Gideon Levy wrote: “The facts are clear: Israel has no real intention of quitting the territories or allowing the Palestinian people to exercise their rights. The continuation of the occupation doesn’t just endanger Israel’s future, it also poses the greatest risk to world peace, serving as a pretext for Israel’s most dangerous enemies. “No change will come to pass in the complacent, belligerent and condescending Israel of today. That’s why this difficult, thankless task has fallen on the shoulders of an ally, as only it has the power to get things started. The entire world, and ultimately Israel too, will applaud Barack Obama if he succeeds. “What is required is not merely extending the settlement construction freeze - whether or not it includes the occupied areas of Jerusalem - but applying pressure on Israel to begin withdrawing to its own borders. The means at Washington’s disposal - including assistance on security and economic issues, the campaign against Iran’s nuclear program and diplomatic support of Israel - can all be conditioned on an end to the occupation.