Occupied Jerusalem: The United States feels "insulted" by Israel, where many leaders feel equally affronted, prompting US President Barack Obama to take the unusual step on Tuesday of reaffirming an "unbreakable" bond with Israel.
It is the worst crisis in relations since the 1970s, says Israel's envoy to Washington. Here are answers to key questions:
What's behind the spat?
Obama wants better ties in the Arab and wider Muslim world, to help stabilise the oil-exporting Middle East, including Iraq, curb Iran's alleged quest for nuclear arms and stifle threats from Al Qaida and its allies to US global interests, including in Afghanistan. Resolving, or at least being seen trying to end, the Palestinians 60-year struggle with Israel might help.
While Washington has shown little patience with Palestinian conditions for talks, notably a demand for a total freeze on Jewish colony expansion, and has no sympathy for Palestinian groups such as Hamas, it is also keen to get both sides talking.
So, having got Palestinian President Mahmoud Abbas to end 15 months of boycott and begin to negotiate via US intermediaries in "proximity talks", and having US Vice-President Joe Biden in Occupied Jerusalem to seal the deal while assuring Israel of American resolve to protect the country against Iran, an Israeli ministry's approval of 1,600 new coloniser's homes in the Occupied Jerusalem area on March 9 caused ructions.
And Israel has rushed to apologise?
Only up to a point. US-educated Prime Minister Benjamin Netanyahu was quick to say that the approval was a bureaucratic procedure — at a ministry controlled by a pro-colonist religious party in his coalition — and does not mean actual construction work for a good long while yet. He set up a committee to ensure he is not blindsided again. In any case, Israel said, buildings at Ramat Shlomo, on West Bank land occupied since 1967 and annexed by Israel in the face of international objections, is destined to be part of Israel in any eventual partition deal with Abbas. They fall outside a partial 10-month colony freeze announced by Netanyahu in November that Clinton hailed as "unprecedented". And, Netanyahu said on Monday, no Israeli government had ever not built in and around [occupied] East Jerusalem since it was captured, so it was unreasonable of the Palestinians to demand he do so now.
Were the Americans satisfied?
US Secretary of State Hillary Clinton called Netanyahu on Friday to demand he act to show his commitment to a relationship with Israel's key ally and to the peace process; Biden's treatment was "insulting". US officials are working to repair the peace negotiations, seeking to bridge a gap that has opened again between the Israeli position and Palestinian demands that the Ramat Shlomo building approval be reversed and an undertaking be given for no new colony expansion. But on Tuesday Clinton and Obama spoke respectively of "unshakeable" and "unbreakable" bonds between the US and Israel.
So is that it?
Hardly. Israel will be pleased to hear those assurances from the US. The Obama administration will hope Netanyahu can hold back his pro-colonist allies from further demonstrations of determination to retain occupied land while Mitchell tries to coax Abbas back to negotiations, as the Palestinian leader looks over his shoulder at invective from Hamas in the Gaza Strip and a surge in anti-Israel protests by Palestinians in his own backyard in the occupied West Bank and East Jerusalem.
All friends again?
Yes and no. Israelis continue to mistrust Obama, not least since his bid for friends in the Muslim world formed such a key part of his early foreign policy gambits. Liberal commentators in the US are grumbling that American ties to Netanyahu and Israel come at a high cost in Washington's wider struggles with Islam. In Israel, commentators suggest Netanyahu needs to go along with the peace process until at least November, when congressional elections may see a boost for Israel's traditional friends on the American right and remind Obama he may need pro-Israel votes to get re-elected in 2012.
