WASHINGTON — Two weeks after Israel's announcement of construction in East Jerusalem threatened the worst confrontation with the U.S. in 20 years, the two sides have agreed to disagree — in effect handing a political and diplomatic victory to right-wing Israeli Prime Minister Benjamin Netanyahu.
Netanyahu, who was showered with expressions of support Tuesday in a visit to Capitol Hill, has successfully refused White House demands — relayed directly by Secretary of State Hillary Clinton — that Israel halt construction in the eastern sector of the holy city, also claimed by the Palestinians.
"We understand that . . . there are different perspectives among the parties. We agree with some, we don't agree with others," said Clinton spokesman P.J. Crowley.
His statement suggested that the Obama administration has failed to move Netanyahu off Israel's long-standing position on Jerusalem.
It was just 11 days ago that Clinton had denounced Israel's decision to build 1,600 new apartments in East Jerusalem with rare harshness. She told Netanyahu that it was a "deeply negative signal" about relations with the U.S. and undermined U.S. attempts to re-launch Middle East peace talks.
This week's outcome marks the second time the Obama administration has pressed Netanyahu on Jewish settlements outside the country's pre-1967 borders, only to come away with less than it demanded.
Last year, Obama pressed Israel for a full freeze on settlements, including what Israel calls "natural growth." Netanyahu offered a 10-month moratorium, excluding East Jerusalem. U.S. officials say the promise was more than any other U.S. president has extracted from Israel.
Obama and Netanyahu met early Tuesday evening for nearly 90 minutes behind closed doors at the White House, with no joint public appearance planned.
It was an unusual protocol for a visiting Israeli leader, and it's not clear the two men will be able to work together in the coming months.
Whether Obama's tactics in the current crisis prove fruitful, or another false start after 14 months of trying to get Israelis and Palestinians to negotiate, remains to be seen.
U.S. officials suggested the high-stakes effort will have been worthwhile if they can get the two sides to the table in the coming weeks, and to open substantive talks on a peace treaty and an eventual Palestinian state.
Crowley said the U.S. goal is to get Israelis and Palestinians beyond indirect, so-called "proximity talks," already tentatively agreed on, and into direct face-to-face negotiations.
"Our immediate pass/fail test is, can (we) get the . . . parties into direct negotiations," he said.
The White House has attempted to keep under wraps the details of the demands that Clinton, at Obama's behest, made of Netanyahu in a tense March 12 phone call — apparently so there would be no public scorecard of what the White House won, and what it didn't.
A senior U.S. official, speaking on condition of anonymity because of the subject's sensitivity, acknowledged that the Obama administration "set a high bar" in its negotiations with Israel. "The Israelis have moved, but not far enough."
The next U.S. step, he said, will be to "make a credible presentation to the Palestinians that this is not everything you wanted, (but) it's a lot."
An Israeli official said Netanyahu has offered some steps on East Jerusalem in response to U.S. pressure. Israel won't halt the construction, but it will avoid provocative actions that could upset peace talks, said the official, who wasn't authorized to speak for the record.
The U.S. and Israel "agree to disagree" on East Jerusalem, the official said.
During his visit to Capitol Hill, where both Republicans and Democrats pledged backing for Israel, Netanyahu attempted to turn the tables on the Palestinians.
If Palestinians stick to demands for a full settlement freeze before peace talks begin, another year could be lost before negotiations get underway, he told Israeli reporters.
Nor does Israel appear to have acquiesced to a reported U.S. demand that, once the "proximity" talks get underway, Israelis and Palestinians would immediately begin negotiating the substantive issues that divide them, as opposed to procedural questions.
Netanyahu's position is that the Palestinians can put any issue on the table they want, but issues such as the borders of a Palestinian state, Jerusalem, and the fate of Palestinian refugees can only be solved via direct talks.
The prime minister, who attended MIT and Harvard and knows the U.S. well, demonstrated the depth of Israel's support in Congress on Tuesday.
"In Congress we speak with one voice on the subject of Israel," House Speaker Nancy Pelosi, D-Calif., said during a joint appearance with Netanyahu.
Shibley Telhami, a University of Maryland professor and the author of several books on the Middle East, said the two-week old crisis has had the effect of putting Obama and his administration more directly involved in Middle East peacemaking.
"There's a level of engagement that's different than before. What we haven't seen yet is what the results will be," Telhami said.
After successive crises, Obama's credibility is more at stake than ever, he added.
"The stakes have been raised even higher," Telhami said. "I don't know if the administration can go on as usual" if there's another confrontation with Israel.
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