Israel has announced that it is building another 1,000 settlement units in East Jerusalem [GALLO/GETTY]

Is this is a sick joke?

While visiting Israel in March, Joe Biden, the US vice president, delivered a speech that delighted the Israeli Right and its followers here. The key passage was this: "When it comes to Israel's security there can be no daylight - no daylight - between Israel and the US."

That formulation, which was devised by the pro-Israel lobby here, pleased the Netanyahu government, which interprets it to mean that Israel has carte blanch from Washington to do whatever it wants. No other country in the world enjoys such a pledge from the US.

Within hours, the Israeli government responded to Biden's endorsement by announcing that it would be building 1,600 new settler units in Arab East Jerusalem.

That announcement - and the slap in the face that it represented - led to the Spring 2010 crisis in US-Israel relations that seemed to indicate that, at long last, the US was standing up to Israel on the settlement issue. In Israel, it was widely speculated that Netanyahu's government would fall. Many believed that the dispute would force him to implement a settlement freeze or face serious consequences.

But then, surprising even Netanyahu, the Obama administration surrendered. Without Israel conceding anything, the administration let just a short time pass before it not only caved on settlements but denied that there ever was a crisis between the two governments.

And the sad thing is that Obama could have prevailed. The Israeli Right knew it had a weak hand to play while the Israeli peace camp was suddenly optimistic that Obama would be the "honest broker" he had promised to be.

But political considerations prevailed. Despite the fact that polls have always shown that most supporters of Israel in this country oppose settlements, the lobby and the Democratic Party donors who take their cues from the lobby warned Obama to back off.

Obama did. And the administration has been flailing in the region ever since.

Déjà vu?

And now the Israeli government has offered another demonstration of just how misguided the administration was when it wussed out.

Incredibly, Biden again offered up the "no daylight" formulation in a major speech to a Jewish organisation in New Orleans.

Biden used the exact same words he had used in March - "no daylight, no daylight" - and, guess what, the Netanyahu government responded a few hours later by insulting him and the US in precisely the same way it did in March.

It announced another 1,000 new settlement units in East Jerusalem. The progression of events is so identical that, when I read today's story, I thought that the computer had somehow pulled up the story from March.

But, no, it is not the same story, although it is the same Netanyahu.

The question is: what will Obama do this time? Especially when it is clear that this latest announcement was timed to kill off US-sponsored negotiations. (See this analysis by Americans for Peace Now.)

Following Tuesday's "shellacking," the big question in Washington is whether the president is going to push back against ugly slaps like this or simply try to conciliate his adversaries.

Netanyahu, who grew up in the US, is as much a Republican as he is a Likudnik (he worked with Speaker Gingrich against President Clinton) and will do everything he can to sink Obama and the Democrats. The President needs to understand that when he plans his response to Netanyahu's latest diss.

What should that response be? It should not be a statement by the state department that settlement expansion is "counterproductive". No, Obama himself should simply restate US opposition to settlements. And he should say that the US believes that a settlement freeze must be implemented (most importantly in East Jerusalem) as a prelude to direct negotiations between Israelis and Palestinians toward a final status solution. He should say that those negotiations must produce an actual map of Israel and Palestine - with Israel free to do whatever it likes in the area that will be Israel. And Palestinians free to build their state in Palestine.

The settlement issue will simply solve itself by the establishment of borders. (No country can build in another country. Period.)

Do it for Israel

The administration must not even consider ignoring Netanyahu's provocation - and not only because that would give a signal to all the president's adversaries that he will easily be rolled over the next two years.

He must fight back because, as General Petraeus warned him, US interests throughout the Middle East (i.e. Iraq and Afghanistan) are imperiled by the perception that the US is the tail wagged by the Israeli dog. He also needs to do it for the Palestinians and for Israel, too.

Just yesterday the Washington Post reported on the declining morale of the Israeli army. Increasingly, young Israelis are ducking service in the military. In a country where just a few years ago draft dodging and refusal to do reserve duty was almost unheard of, large numbers of Israelis today do everything they can to avoid service. The reason why is obvious. It is one thing to defend one's country. It is another to defend an occupation.

If Obama truly is Israel's friend, he will help Israel out of the hole it has dug itself into. No one else has the leverage. No one uses its United Nations veto on Israel's behalf over and over again, even when the state department itself is deeply embarrassed to do so. No one else provides Israel with almost $4bn a year.

The US has both the right and the obligation to demand that the settlement insanity stop now. Neither this country nor its president should be treated as if they barely matter.

MJ Rosenberg is a senior foreign policy fellow at Media Matters Action Network. The above article first appeared in Foreign Policy Matters, a part of the Media Matters Action Network.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

Source: Al Jazeera