Settlement Policy ‘Dance’ Intensifies

In the ambiguous aftermath of the Annapolis summit, a blizzard of contradictory Israeli pronouncements on settlement expansion could be an irritant in U.S.-Israel relations — especially the on-again-off-again plan to build new housing in the red flag Har Homa neighborhood of Jerusalem.

But few observers expect an all-out diplomatic blow-up despite the Bush administration’s new urgency about forging a peace agreement by the end of the new year.

Warnings on the right that the Bush administration is abrogating its 2004 promises to former Prime Minister Ariel Sharon notwithstanding, most analysts believe U.S. policy on settlements remains consistent.

"I see no change," said Seymour Reich, president of the Israel Policy Forum, a group that promotes a more active U.S.-led peace process. "What
I do see is the administration expressing deep concern about the expansion of settlements, in contravention of the good faith talks that are supposed to be taking place between Israel and the Palestinians."

In a way, Reich said, it is a familiar diplomatic dance.

"U.S. presidents have always expressed concern about expansion of settlements; Israel always talks about ‘natural expansion’ because of growing families," he said

Israeli domestic pressures have traditionally been part of the choreography, he said. That may play an even more important role as Prime Minister Ehud Olmert struggles to keep his fragile governing coalition together.

"Olmert has to play to his coalition," Reich said. "He doesn’t have a big enough majority to move forward as he might want to. So for every step forward, he has to take two back. That’s unfortunate, it’s an irritation in Washington, but it may not impede the new talks."

The real question, several Jewish leaders say, is whether the Bush administration is serious about doing what it takes to create a Palestinian state in the next 12 months. If so, and if conditions are right for progress, there could be new U.S. – Israeli friction because the administration will want Olmert to move more quickly on settlements than his political situation might allow.

But those are huge "ifs," most agree.

The recent settlement flare-ups and ambiguous response in Jerusalem would be dizzying to observers not schooled in the nuances of Israeli politics and diplomacy.

Recently Israeli officials set off alarm bells in Washington with plans for up to 10,000 new homes in the Atarot neighborhood of east Jerusalem. At the same time, the Housing Ministry announced plans for 300 new apartments in Har Homa, a Jerusalem neighborhood that has been the flash point for U.S.-Israel friction for a decade.

Olmert distanced himself from the Atarot proposal, a retreat praised by Secretary of State Condoleezza Rice. But over the weekend it was revealed that the Housing Ministry budget for the upcoming year includes even more apartments for Har Homa, plus additional units for Ma’aleh Adumim, a community of 30,000.

Rafi Eitan, the minister for Jerusalem, told Army Radio that "Har Homa is an integral, organized part of Jerusalem. No promise was ever given to anyone that we wouldn’t continue to build in Harm Homa."

While Washington fears new announcements about settlements could weaken Palestinian leader Mahmoud Abbas and undermine fragile efforts to revive the Mideast road map before they take root, there has been nothing beyond the usual diplomatic wrist slapping — so far.

"If Secretary of State Rice wanted to make a real point, she would be making it much harder," said Edward Walker, a former U.S. ambassador to Israel. "She has to say settlements aren’t helpful. It’s not new policy, and it’s not a surprise to Olmert."

He said that the U.S. reaction so far has been largely pro forma.

"I don’t think the administration is all that upset about settlement activity on the premises of existing settlements. They say they are, but it’s impossible to press the issue. What are we going to do, tell people not to have children? It’s not going to work, so we have to have some tolerance for it. They [the administration] won’t make a big deal about it, even though Palestinians will."

Any Israeli effort to build up illegal outposts could produce a deeper diplomatic crisis, he said, but the kind of expansion that has produced a flurry of headlines in the past week is unlikely to be more than a ripple.

Har Homa, though, is a special case, Walker said.

Building at Har Homa was first proposed in 1991, but plans were not finalized until 1997. Some analysts say the plan was the response of then-Prime Minister Benjamin Netanyahu to the political crisis triggered by the Hebron Agreement.

The issue has become a diplomatic finger in the eye for U.S. administrations above and beyond their routine concerns about settlement expansion.

"That has always been a very sore spot with every administration," said Walker, who served in the Clinton administration when the issue of building in the neighborhood was first raised. "We made a substantial stink about it, and it was put on ice for a while. But it has a very strong domestic political component in Israel."

Right-of-center groups argue that this week’s rebukes from Washington signal that President Bush is abandoning his acknowledgment in a 2004 letter to then-Prime Minister Ariel Sharon that territorial adjustments taking into account major settlement blocs were likely in any final Israeli-Palestinian agreement.

"It’s becoming very clear that Bush is reneging on his promise that he supports Israel maintaining the major Jewish areas in Judea and Samaria," said Morton Klein, president of the Zionist Organization of America (ZOA). "Bush has gone from supporting Israel maintaining major Jewish areas of Judea and Samaria to saying that Israel cannot build within those areas."

Klein said that represents a "huge change" in administration policy, and attributed it to the administration’s "desperation" to get an Israeli-Palestinian peace agreement before the end of Bush’s term.

But several major Jewish leaders disputed that assessment.

"I see no real change. U.S. policy has always been opposed to settlements," said Abraham Foxman, national director of the Anti-Defamation League, who noted that the Bush administration does not speak of the settlements as "illegal" or "obstacles to peace."

Foxman said nothing expressed in recent weeks violates the 2004 letter, which "was just a broad perspective, a statement of the position the U.S. government will have if and when there is an agreement with the Palestinians."

There has been no change in the U.S. position on settlements or on the perennial sore spot of Har Homa, said David Makovsky, senior fellow at the Washington Institute for Near East Policy. But there could be a new urgency to the issue created by the renewed push for an Israel-Palestinian agreement within a year.

A new negotiating paradigm initiated at Annapolis requires tangible and quick signs of progress for skeptical populations on both sides. For Israel, that translates into curtailed settlement activity, he said. "Both sides have to get something."

In that context, analysts say, the settlements question could take on far greater significance in U.S.-Israel relations in the coming months.