Is this the beginning of the end, or the end of the beginning?

Prime Minister Benjamin Netanyahu, it is now reported, has told his American interlocutors recently that he was going to approve the construction of several hundred new homes in the occupied West Bank before commencing with any form of settlement freeze. The biggest problem really is that Netanyahu’s defiance of Washington is proving popular in Israel, where the public is usually very nervous about quarreling with the United States. However, in this case, the Israeli public distrusts President Obama, and seems to be largely supportive of Netanyahu’s refusal to fully cooperate in moving towards peace. It’s a kind of practical demagoguery, and shortsighted populism, but at the moment, it’s proving politically effective for the Israeli prime minister.

However, the real context of this very limited but also extremely unfortunate and provocative, indeed outrageous, settlement activity is preparation for the announcement of a freeze in September or October. While Netanyahu is defiant of the United States, the Obama administration has not given in to his conditions and is still pushing for a settlement freeze that is comprehensive, includes Jerusalem, and lasts for at least 18 months. Netanyahu’s settlement flurry, I suspect, indicates that he is preparing the ground politically for an arrangement with the United States that formally meets many, and in practice meets virtually all, of the Obama administration’s conditions. However, it’s also likely that some of the most sensitive aspects of this understanding will be informal and unannounced, probably to the point that the Israeli prime minister will insist that he has not given in on this or that issue, when, in fact, at a practical level he has.

Netanyahu not only has an ideological and instinctive inclination towards maintaining the occupation and thwarting Palestinian independence, he also is dealing with a cabinet that is extremely fragile and contains many people significantly to his right, making it very difficult for him to act in a reasonable and constructive manner even if he were inclined to do so. Worse still, he now finds it politically advantageous with the general Israeli public as well as his cabinet coalition to be recalcitrant, or at least to try to appear to be obdurate. However, his agreement to the concept of establishing a Palestinian state, even if only in principle and at the rhetorical level, shows that he can be moved, will when necessary do things that key cabinet members continue to reject and oppose, and is playing a delicate political game of balancing Israel’s interests as he perceives them, his own political requirements for staying in office, and preventing an all-out confrontation with the Obama administration. This suggests that there is in reality significant room for maneuver while the public face remains, on many issues, one of stubborn intransigence.

On the American side, President Obama finds himself in a very tricky political situation, with rapidly declining popularity ratings and complete chaos on his signature health care issue. The United States retains enormous leverage over Israel, but the power of Israel’s American political supporters and the current difficulties of the President, not to mention the fact that the defiance is proving popular domestically in Israel, has complicated the already difficult business of applying this leverage to specific Israeli behavior, especially on such a pivotal issue as the settlements.

The question, then, is: is Netanyahu’s miniature settlement surge the beginning of the end, or the end of the beginning? Is the Israeli prime minister determined to sabotage the Obama peace initiative for ideological and/or political imperatives? Is this a sign that Israel is simply going to refuse to do what is necessary to achieve peace, and the end therefore of Obama’s hopeful beginning in re-engaging with the peace process? That is entirely possible. On the other hand, it is also possible to read this move as pointing in a contrary direction, as the beginning of the end, and the final temper tantrum of defiance before Israel agrees, in practice, to effectively stop building settlements for the foreseeable future.

If Netanyahu builds a few hundred homes now, and then through both formal and informal commitments effectively stop building any more settlements for the next couple of years, that would open the door for very significant progress, without collapsing his government and creating an avoidable and unconstructive crisis. It’s probably true that this current Israeli government is not the one that will ultimately sign a permanent status agreement that ends the occupation and ends the conflict. But it could be the government that, after extraordinary theatrics of defiance and recalcitrance, finally bites the bullet on settlements making serious negotiations possible and beginning the process of moving towards the end of the occupation and of the conflict.