After the Fight, U.S. Eyes Netanyahu's Next Move

The White House has made clear its relationship with Israel has been fundamentally altered; what Benjamin Netanyahu does in government will determine if it can be saved.

Barack Obama's sustained public criticism of Netanyahu's election rhetoric has led to allegations of a personal vendetta and even a touch of presidential petulance.

Obama has steadfastly rebuffed Netanyahu's efforts to row back his election-time opposition to a Palestinian state.

An outright apology for anti-Arab comments was barely acknowledged.

"It's has been a continuously running soap opera between Netanyahu and Obama," said Aaron David Miller, a former advisor to Republican and Democratic secretaries of state.

The Obama administration has hinted it would consider a U.N. resolution -- long opposed by Israel -- that would lay out the contours of a peace agreement and the creation of Palestinian state.

But, at least publicly, the White House is stopping short of outright support.

"We have not yet actually seen the text of a resolution, so I'd reserve comment on a hypothetical resolution at this point," said White House spokesman Josh Earnest.

- Eyes on new cabinet - 

The inflection point may be the creation of Netanyahu's government.

Negotiations to form that government are already advanced. It seems likely to include hardline right wing and ultra-Orthodox parties. 

The composition of the cabinet will matter -- Washington was no fan of foreign minister Avigdor Lieberman, but it's not clear Naftali Bennett or other candidates would be any less hardline.

Perhaps more important will be the document that binds Netanyahu's multi-party coalition.

If Netanyahu's pre-election anti-Palestinian rhetoric is codified, concrete action is sure to follow.

"The coalition agreement, which they actually have to vote on at the Knesset, will either have to say 'we support a two-state solution' or it won't," said Jeremy Ben-Ami, founder of J Street, a left-leaning lobby group based in Washington. 

"No matter what was said in the campaign, or what was said to walk it back, that's the policy of the government."

"It is a very very clear signal if that coalition agreement, if they can't even get the words out of their mouth."

The White House has made it clear that security ties will not be affected, but from there everything else seems to be in play.

Settlement building could be met with measures to halt the flow of financing to those individuals and organizations involved. 

A lot will depend on Obama's goals.

There is as much speculation in Washington as Jerusalem about what the US hopes to achieve by pressing Netanyahu so.

"Are they trying to force the Netanyahu government into more compliant positions on the peace process? Are they trying to change the nature of the relationship? Are they trying to pacify the Palestinians so that there won't be an explosion on the West Bank?" asked Miller.

On the diplomatic circuit, there is speculation that Obama may also, in part, want to warn Netanyahu off further opposition to a seemingly imminent nuclear deal with Iran.

After all, the latest tensions between the two leaders came before the Israeli elections, when Netanyahu secretly arranged to address a joint meeting of the Republican-controlled U.S. Congress where he openly tried to scupper the agreement.

- Worries over U.N. resolution - 

But in the short term, a United Nations resolution is what perhaps worries Israel the most and is what diplomats will try to avoid.

"I think that's a real possibility that the administration is seriously contemplating. This will not make the Israelis happy," said Edward Djerejian, a former U.S. ambassador to Israel.

"The parameters a final settlement would be outlined and approved by the international community. Putting (it) on the record that the two-state solution is the one way to go."

A similar resolution was defeated in December, largely thanks to the U.S. desire to avoid seeing Israel isolated.

It went as far as setting a deadline for Israeli forces to withdraw from Palestinian territories.

While few agree that a dictated peace would work, it may help keep frustrated Palestinians from acting unilaterally.

"I think that the White House concretely wants to see that the government of the state of Israel stop undermining the chances of a state for the Palestinian people and for peace in the region," said Ben-Ami.

"Because if they don't this will ultimately blow up and this country -- which has very deep interests in the Middle East -- will be drawn into a very very awful conflict."

Even before the creation of his government, Netanyahu has started making overtures beyond the rhetorical.

A settlement plan in East Jerusalem will reportedly be frozen. 

The Israeli government has also said it will release hundreds of millions of dollars in tax funds it has withheld from the Palestinian Authority.

The Obama administration has welcomed that latter move, but it will take much more to repair ties or even avoid a new flashpoint at the United Nations.