So the Obama administration has decided to make a big deal out of the announcement, during VP Joe Biden's visit, that Israel is planning 1,600 new housing unites for Israelis on the West Bank -- close to Jerusalem and as I understand it an addition or expansion of an existing settlement, not a new settlement. There's little doubt that someone in the Israeli government -- it looks as if Netanyahu is still denying personal advance knowledge of the announcement -- did intend to embarrass Biden. For various reasons the Israeli government is not especially pleased with Obama or his administration. Israel is mainly concerned about Iran right now, and in no mood -- and probably no position -- to negotiate with the Palestinians, whether through an intermediary or toherwise. When Obama called on Israel a year or so ago to halt West Bank settlements it was a blunder -- a president sholdn't make such a request unless he has already negotiated acceptance behind the scenes. Oops. Israel wasn't ready for that, though it softened its utter resistance after a while. Somebody was ready to put some egg on the American face.
The mistake is compounded by making such a big deal of it. The U.S. is in the position it has been in through much of the last 30 years or so -- wanting Israeli-Palestinian negotiations and a two-state settlement more than either of the parties involved want it right now. If Obama were smarter he would say nothing and start cutting off aid -- informing the Israelis but not making a public announcement. But after lookiing "soft" after letting the firm demand to stop settlements wither and die, he has to look "tough" now. Or so the constricted logic of too much of what passes for diplomacy goes.