Barack Obama and Benjamin Netanyahu may manage to paper over their differences next week, but deep disagreements remain -- Israel's settlements foremost among them.


Just days before a scheduled fence-mending visit to Washington by Israeli Prime Minister Benjamin Netanyahu, I received an email from the Jerusalem Post that invited me to move to territory that most of the world considers occupied Arab land.

The email, titled “Enhanced financial assistance for Aliyah to Israel’s North in 2010,” promised up to $14,000 in cash and numerous other benefits (“aliyah” is the term for when Diaspora Jews move to Israel). The email showed a smiling young mother and daughter looking out over a vista of red tile-roofed houses, rolling green hills, and a large lake.

A few clicks revealed that the Golan Heights — which Israel captured from Syria in the 1967 war — is among the “northern” communities seeking prospective immigrants.

Elsewhere on the site of Nefesh B’Nefesh — which means “Soul-to-Soul” and is the Israeli organization promoting the initiative — was a map that linked to numerous settlements in the West Bank that are also available for newcomers. Rather like old Palestinian maps that did not acknowledge the state of Israel, the Nefesh B’Nefesh illustration omits Israel’s pre-1967 “Green Line” border and any reference to the Golan Heights, West Bank, or Gaza.

Settlements were the cause of the Obama administration’s last big blowup with the Netanyahu government, during Vice President Joe Biden’s trip to Israel in February, and are likely to remain the biggest obstacle to restarting Israeli-Palestinian peace talks.

Netanyahu, due to meet with President Barack Obama July 6 to make up for a session canceled after the May 31 Gaza-bound flotilla fiasco, announced a 10-month moratorium on new settlement construction last November in large part due to U.S. pressure. But the moratorium permits completion of projects already started as of Nov. 25 and excludes the Golan Heights and East Jerusalem, both of which Israel has annexed but whose status in international law remains that of land occupied during a war. According to a report by Peace Now and its American sister organization, Americans for Peace Now, there was a “33% spike in building starts” in occupied territories on the eve of the moratorium, “effectively inoculating the settlers in advance so that they would feel little or no effect.”

Unless the moratorium is extended beyond its scheduled expiration on Sept. 26, Peace Now states, “these past 10 months will have had no significance on the ground — either in terms of settlement construction (which never stopped) or political impact…. Worse still, the moratorium may actually end up having laid the groundwork for a major increase in settlement construction, with settlers working hard, in advance of the expiration, to gain approval for new projects to be implemented as soon as the moratorium ends.”

Michael Herzog, a retiring brigadier general in the Israel Defense Forces, says Netanyahu will not extend the moratorium — even with all its loopholes — unless the Palestinians agree to move to direct negotiations from the proximity talks begun in May by U.S. envoy George Mitchell.

A veteran of failed negotiations in 2000 and at Annapolis in 2007, Herzog wants new talks to begin and succeed. “We cannot afford a third failure,” he told an audience at the Washington Institute for Near East Policy on July 1.

Palestinian leaders say they have little incentive to begin direct negotiations while Israel continues to subsidize settlement growth. Given the choppy pattern of U.S.-Israel relations under Obama and the dynamics of Netanyahu’s right-wing coalition, it wouldn’t be a surprise if Israel announced some new housing activity just before, during, or after the Obama-Netanyahu meeting: perhaps some digging around the old Shepherd Hotel in East Jerusalem. Plans to demolish the hotel and build Jewish housing in its place are particularly controversial because it would be the first time since 1967 that such construction would occur in Sheikh Jarrah, a predominantly Arab neighborhood north of the Old City.

“It seems as though Bibi [Netanyahu] believes it is easier and less costly to fight with Obama than his [Netanyahu’s] interior minister or the mayor of Jerusalem,” says Lara Friedman, director of policy and government relations for Americans for Peace Now.

Stephen Hadley, a former national security advisor under George W. Bush and now part of a Middle East study group at the U.S. Institute of Peace, says he thinks the Obama-Netanyahu summit will go relatively smoothly after months of friction.

“This visit is doomed to succeed,” Hadley told the Washington Institute crowd. But that doesn’t mean all is roses. “The crunch time will come in September” when the settlement moratorium and Arab League approval for proximity talks both expire, he said.

Meanwhile, a host of benefits beckons for American Jews who decide to move to Israel at a time of high unemployment in the United States.

Nefesh B’Nefesh, which receives one-third of its aliyah budget from the Israeli Ministry of Immigrant Absorption, promises employment coaching and white-collar job opportunities. In the “North,” its website says, “there is demand for grant writers, fundraisers, marketing and communications professionals and international sales people. The North is also ripe for entrepreneurship, and there are resources available to assist those who are interested in opening a business in the area.”

As to the possibility that these homes and businesses might someday have to be relinquished in the cause of peace, the website has nothing to say. The Israeli Embassy in Washington declined comment on the issue.

Barbara Slavin directs the Future of Iran Initiative at the Atlantic Council.  Twitter: @BarbaraSlavin1

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