The Obama administration signaled Friday that its 10-day spat with Israel may be nearing an end, with Secretary of State Hillary Rodham Clinton declaring to the BBC that the confrontation “is paying off” and would lead to a resumption of negotiations between Israel and the Palestinians.

But as the dust from the diplomatic tussle settles, some analysts are questioning what the administration actually gained from it – and whether U.S. officials have a strategy to achieve their goals.

Clinton, speaking to reporters in Moscow after a meeting with Mideast mediators, said that Israeli Prime Minister Benjamin Netanyahu on Thursday had offered “useful and productive” ideas for getting the peace process back on track.

It appears, however, that those proposals will fall short of the demands Clinton listed in a tense phone call on March 12, after Israel announced new housing units in a disputed part of Jerusalem during Vice President Joe Biden’s goodwill visit.

Sources suggested that the bulk of Netanyahu’s suggestions concerned possible gestures to the Palestinians, with some vague discussion of a “mechanism” to ensure that housing construction in East Jerusalem does not cause further controversy.

The prime minister followed up the call by sending Clinton a formal document more fully outlining the proposals. U.S. special envoy and former Maine senator George Mitchell will meet with Netanyahu in Israel on Sunday, presumably to lock in an agreement before Netanyahu travels to Washington to meet with Clinton and addresses the annual conference of the American Israel Public Affairs Committee on Monday.

Diplomats noted that the Obama White House still appears to lack a discreet back channel that would allow President Barack Obama and Netanyahu to directly handle sensitive issues, but the glimmerings of one may have emerged in this crisis. Yitzhak Molcho, a low-key private lawyer in Israel who negotiated the settlement freeze with Mitchell, worked closely behind the scenes on the Israeli response with Dennis Ross, a senior official on the National Security Council.

Last year, the administration was heavily criticized in the Arab world when it accepted a 10-month moratorium on settlement construction, with substantial caveats, after publicly demanding a full settlement freeze.

Clinton, in the BBC interview, denied that the administration had lost credibility because of its handling of the matter and defended the deal, saying that in diplomacy “sides start very far apart and try to narrow differences and get as close as they possibly can.”

Still, administration officials appear to have learned their lesson. This time around, they never publicly confirmed their demands – or the consequences Clinton outlined to Netanyahu if he did not act. If Clinton’s full demands, which included a cancellation of the controversial housing project, are not met, the diplomatic consequences could be limited.

In the BBC interview, Clinton also asserted that the indirect talks being organized by Mitchell will start with “substantive matters on the core issues that divide the Israelis and the Palestinians.”

If true, this would mark a significant shift by the Israelis, who had wanted to keep the talks focused on procedural issues, leaving discussions on such topics as Jerusalem, borders and refugees for direct negotiations.

The Palestinians had pressed for substance in the indirect talks, and Clinton had demanded a change in the Israeli position in her phone call with Netanyahu.

The “proximity” talks, however, are a far cry from the grand ambitions once suggested by Obama, who on his second day in office announced the appointment of Mitchell, a former Senate majority leader who forged the Irish peace accords.

Israelis and Palestinians have been negotiating for years, but after Clinton hailed the temporary settlement freeze as “unprecedented,” Palestinians refused to participate.

Now, many analysts say indirect talks are a significant step backward. “We are going back 20 years,” said Daniel Kurtzer, a former U.S. ambassador to Israel who advised Obama during the campaign. “This is really kind of unambitious.”

Elliott Abrams, who handled Israeli issues as deputy national security adviser in the George W. Bush administration, noted that after meeting with Clinton in Moscow, the Quartet – the Middle East monitoring group that also includes Russia, the European Union and the United Nations – on Friday echoed the administration’s use of the word “condemn” when it referenced the housing project in East Jerusalem. “The Quartet only used that word for murders and terrorism,” he said.


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