America has "no better friend" than Israel, Vice President Joe Biden recently declaimed, even as the Israelis kicked him in the teeth with the announcement of 1,600 new settler homes in East Jerusalem. Israel's U.S. ambassador called the flap "a crisis of historic proportions ... the worst crisis since 1975," when President Ford attempted to "reassess" the relationship because of Israeli foot-dragging on the same issues as today: borders, sovereignty and refugees. The Israeli ambassador's subsequent assertion that he did not actually use the word "crisis" lacked, to put it mildly, believability. Dealing with a Netanyahu government, former Secretary of State Madeline Albright recalled, is "like negotiating in hell." It is now Obama's turn to navigate that hell. The issue at hand is a new and old: the new aspect is the new housing on Arab land; the old aspect dates from the birth of Israel in 1948, when 75 percent of Palestine's Arabs were driven out of their homes and into exile. In the 1967 Six-Day War, the Israelis seized new territory: the Sinai, Gaza, the West Bank, East Jerusalem and the Golan Heights. Although Israelis cheered the occupations as a sign of Israeli permanence -- "redeeming Israel's narrow hips," as Yitzhak Rabin put it -- they were actually self-defeating. Having expended so much energy kicking the Palestinian Arabs into exile in 1948, the Israelis turned around and reoccupied the very populations that they had taken such pains to expel.
"We've been given a good dowry, but it comes with a bride we don't like," Prime Minister Levi Eshkol joked after the 1967 war. But the joke faded as the bride remained. Sinai was given back, but Israel clung to the other territories and pushed in settlers in an effort to dilute the Palestinian presence. American aid has certainly facilitated the settlements; with U.S. taxpayers picking up 20 percent of the Israeli defense budget every year, the Israelis can pour more resources into settlers. Military areas and roads, nature preserves, the 2002 security barrier -- which brazenly helped itself to 12 percent of the Palestinian Authority's land -- and, finally, Jewish housing projects in the occupied territories suggested themselves as a way to create wholly new "facts on the ground." The Palestinians could be displaced by a permanent IDF presence and settlers. Unfavorable demographics -- "we will beat then with the womb," Arafat always boasted -- would be staved off by inflowing waves of Jewish immigrants and their families.
Nowadays, the pressure for settlements comes from the right-wing religious parties in Israel, which are a key member of Netanyahu's coalition. Settlements provide free land, soft loans, welfare payments and space to raise the big families. For Netanyahu, Orthodox settler fertility is convenient, because it permits him to budget for "natural growth" in the settlements, and keep expanding them.
Israel remains dependent on U.S. foreign aid ($3 billion per annum), yet pushes ahead with an illegal housing program that sours America's relations with the Muslim world and makes any peace settlement, let alone a final one, impossible. The 844,000 refugees of Truman's day have grown to 4 million today, and they remain crammed into the very areas that Netanyahu is parceling into Jewish settlements. Every administration since Truman has wrestled with this problem, and vowed to bring the Israelis to heel. Eisenhower protested Israel's "merciless severity." Kennedy pressed a plan to compensate or resettle the Palestinians, but then dropped the plan when warned that it would cause "a violent eruption both domestically and in our relations with Israel." LBJ looked on impassively as the Israelis seized the occupied territories that they are now busily settling. With Israel briefly on the ropes in 1973, Nixon and Kissinger had a golden opportunity to force the Israelis out of their occupied territories and to trade the U.S. airlift -- bigger than the Berlin airlift of 1948-49 -- for tangible results, but Kissinger demurred, foolishly assuming that Israeli gratitude after the war would result in big concessions. It didn't. "They can't do this to us, Henry, they can't do this to us again," Nixon wailed in the face of Israeli stonewalling, but they did.
Can Obama finally get tough, and trade U.S. foreign aid and security for Israeli fair-dealing on this question? Probably not: the administration has its hands full with health care, stimulus, Iraq and the surge in Afghanistan, and is unlikely to pick a bruising fight with an Israel lobby that influences the very members of Congress Obama needs for his other initiatives. It's worth remembering how the 1975 crisis recently adduced by Israel's ambivalent ambassador subsided. Ford got tough, and Congress went limp, bowing under a barrage from AIPAC and warning Ford not to reassess. He didn't. Still, there is cause for hope. The Obama administration is just angry enough to press Netanyahu hard and force him into real talks with the Palestinians that will deal conclusively with borders, the status of Jerusalem and the fate of the Palestinian refugees. Geoffrey Wawro is the General Olinto Mark Barsanti Professor of Military History at the University of North Texas, and the author of Quicksand: America's Pursuit of Power in the Middle East (Penguin Press, April 2010.)