The US has long expressed opposition to the expansion of Israeli settlements but this has never moved much beyond rhetoric.
Certainly the continued expansion and development of new settlements on the West Bank did not cause prior administrations to shift their policies toward Israel.
The basic understanding between the two sides has been that the US would oppose settlements formally but that this would not evolve into a fundamental disagreement.
The new US administration, however, has clearly decided to change the rules of the game, demanding that the Israeli government halt a settlement building project in East Jerusalem.
However, Binyamin Netanyahu, the Israeli prime minister, said on Sunday that he would not take orders on where Jews can live and reiterated the claim that a united Jerusalem is Israel's capital.
With relations souring between the US and Israel, Inside Story asks: How strained are relations between these two long-term allies and will either concede?
Discussing the issue are guests Shimon Shetreet, a professor of law at the Hebrew University and the former senior deputy mayor of Jerusalem, Geoffrey Aronson, the executive director of the Washington based foundation for Middle East Peace and editor of the Report on Israeli Settlements in the Occupied Territories, and Ghassan al-Khatib, a political analyst and the vice-president of Bir Zeit University.
This episode of Inside Story aired on Tuesday, July 21, 2009.
Source: Al Jazeera