It’s the Settlements, Stupid

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1. Biden Is Losing Patience

The rocky road that is the Netanyahu-Biden relationship is littered with numerous roadblocks and obstacles. There’s the soured personal relationship; America’s concern over the future of Israeli’s democracy under Netanyahu and his right-wing coalition; and Israel’s fear that Biden, once again, is favoring a deal with Iran over pursuing the tough line that Israel would like to see.

The least of concerns should have been the Palestinian issue, simply because those expectations have already been set to the lowest bar possible. Upon taking office, Biden made it clear that his administration would not seek an Israeli-Palestinian peace deal, nor would it attempt any breakthrough that would require Israel to compromise and make tough decisions. Biden’s only request from Netanyahu was not to rock the boat too much—to take it easy on settlement expansion and to move forward with some practical measures that would ease the lives of Palestinians at no cost to Israel’s wish of maintaining its Jewish settlement base in the West Bank.

That, however, didn’t work out as expected.

In recent weeks, the Palestinian-Israeli conflict has crept back up to reclaim its historic role as the No. 1 stumbling block between Washington and Jerusalem. As always, hopes (on the Israeli side) that America will finally give up on the Palestinian issue, or belief (on the U.S. side) that Israel will at last rein in settlers and impose a status quo, were shattered by reality.

Recent weeks have seen a steady escalation in tensions between the Biden administration and Netanyahu’s government. Biden, to put it in clear terms, has had enough. The feeling among administration officials in charge of relations with the region is that actions by the Israeli government have gotten dangerously close to crossing America’s red line.  Not only will the two-state solution become impossible to resurrect, but a violent eruption could follow in the very near future.

2. The Issues: Settlements, Settler Violence

Tensions over Israel’s construction and expansion of Jewish settlements in the West Bank are decades old. Except for the rare and short-lived periods of agreement (the 10-month settlement freeze agreed upon by Obama and Netanyahu) or of policy change (Trump’s decision to relax America’s objection to settlement expansion during the second part of his term), the lines have always been clear: Israel, especially when governed by a pro-settler right-wing coalition, would like to see as much building as possible in the settlements, and the United States would like to keep this expansion to a minimum and make sure that whatever building is okayed doesn’t infringe on the viability of a future Palestinian state.

This tension has given birth to a diplomatic dance that both sides know quite well: Israel announces another batch of settlement building permits, and U.S. diplomats rush to their Israeli counterparts and complain. Israelis offer some explanations about how these permits are only technicalities or how they’re necessary for natural growth or for the government’s political survival, at which point the Americans ask to postpone/limit/call off the permits and then issue a public statement expressing “concern” over Israel’s decision. Then the Israelis go ahead and issue the permits anyway. And that’s all it is—a diplomatic dance.

Except in those instances when one side breaks the unwritten rules, which is what has been happening in recent weeks.

It started with an Israeli decision to begin the process of providing permits for 4,000 new homes in West Bank Jewish settlements, which was followed by a government decision to streamline new building permits and make expansion of settlements even easier. This was topped by an announcement of the immediate approval of 1,000 new homes in response to a Palestinian terror attack that killed four Israelis near the settlement of Eli.

This was a bit too much for the Biden administration. Not only are these massive numbers, but they indicate a clear intention by the Israeli government to drop any façade of moderation when it comes to expanding Jewish presence in the West Bank.

The State Department went from “concerned” to “deeply troubled,” calling the moves an obstacle to peace and then accusing Israel of reneging on promises it made to the United States during recent regional summits.

But settlement expansion is not the only, nor the most worrisome, issue right now.

Recent months have seen a troubling uptick in violent attacks by settlers on neighboring Palestinians. The widely reported February pogrom in Huwara drew international attention but did not lead to an effective crackdown by the Israeli government on extreme settlers behind these attacks.

Just this week, settlers rioted in the town of Turmus Ayya, burning homes and cars and leading to the death of a Palestinian resident shot by Israeli soldiers who arrived, belatedly, on the scene. Following the attack on the town, which is home to many American citizens, the U.S. Office of Palestinian Affairs sent officials to tour the damage, a move meant to send a message of solidarity to the attacked Palestinians and at the same time signal to Israelis that America is taking these attacks seriously.

On Friday, National Security Adviser Jake Sullivan called his Israeli counterpart, Tzachi Hanegbi, with some harsh words. Sullivan “reiterated the importance of holding accountable those responsible for such acts of violence,” according to the White House readout of the call, and “encouraged additional steps to restore calm and de-escalate tensions.”

3. Hitting Where It Hurts

A lot of this is diplomatic speak. No one in the real world cares about American “concerns” or about “encouraging additional steps.”

But early this week, the Biden administration moved into the world of real consequences. Well, almost. On Sunday, KAN news in Israel reported that the Biden administration had informed Israel of new guidance prohibiting the use of U.S. funds for bilateral scientific and technological projects in the West Bank. In practice, this means that American taxpayer dollars will no longer go to research institutions in the West Bank, primarily Ariel University, which is located in the settlement of Ariel.

This was seen in Israel as a punitive response to its settlement activity and to its failure in curbing settler violence. As far as punishment goes, this is a strong signal from the Biden administration. Real money will be denied to Israeli projects. Not a lot of money, but still, it’s real.

The U.S. administration has explained that the move is no more than a return to decades-old policy that excludes institutions in the settlements from receiving U.S. funding. (The Trump administration did away with this restriction.)

And so there is space for deniability; is the United States punishing Israel, or is this just part of a review of all Trump-era policies regarding Israel that have been in the works regardless of the Netanyahu government actions? 

4. How Will These Issues Play Out in Coming Months?

There are two main events to watch for.

The first, in mid-July, is when Israeli president Isaac Herzog is scheduled to visit Washington. Herzog is the official head of state and as such is detached, or at least should be detached, from Israel’s partisan infighting. Herzog will speak to a joint session of Congress, an honor few heads of state receive, and will meet with President Biden and top administration officials.

Netanyahu, needless to say, will feel a sting watching Herzog reap praise and friendship in Washington, while he himself is still banished from the Biden White House.

But will the issues straining the relationship between the two countries come up in Herzog’s meetings? Though these visits are usually thin on policy and diplomatic content, it is likely that the Israeli president will get a good sense of what’s bothering Biden and his administration: Israel’s policy regarding the Palestinians, Netanyahu’s attempted judicial overhaul and the rise of extremism in Israel.

And there’s another upcoming date: September 30. That is the deadline for determining whether Israel will be entered into the U.S. visa waiver program. There are still details that need to be ironed out, primarily ensuring that Israel allows free access to Americans of  Palestinian and Arab origin, but a bigger question is hovering over this process: Does the Biden administration really want to go the extra mile right now and make it happen for Israel? Visa waivers are a big deal for Israelis. It would be safe to guess that at least some in Washington are asking themselves if this is the right time to provide Israel, and by extension Netanyahu, with such a gift.

5. Exit Ramps

Tensions don’t last forever, especially when both sides feel the need to resolve them.

How can it be done this time around?

Netanyahu can send messages to Washington making it clear that the outburst of settlement construction planning was no more than a response to a tough situation on the ground, and that—as has happened many times in the past—the government will find quiet ways of delaying the process. After all, finalizing building permits can take years.

He could also demonstrate that steps are being taken to go after extremist settlers. On Sunday, a first step in this direction was taken by heads of Israel’s security branches. A joint statement issued by the army’s chief of staff, the outgoing chief of police and the head of the Shin Bet (Israel’s internal security agency) condemned settler violence in harsh terms and announced immediate measures against those involved in violence. This could be a good start.

On the judicial overhaul front, Bibi is in a tougher spot, since he committed to his coalition members to advance the process, but here too, careful messaging to Washington, and some real moves to prove that he will not move unilaterally on the issue, could go a long way.

Biden and Netanyahu will never be the best of friends, but with some good will, the relationship can still be salvaged.

Image credit: U.S. Air Force Staff Sgt. Jack Sanders/U.S. Secretary of Defense(CC BY 2.0) / Gage Skidmore (CC BY-SA 2.0) / מיכאלי (CC BY-SA 2.5)