Conventional wisdom is fast congealing in Washington that President Obama was wrong to demarcate a shift in American policy toward Israel last week. In fact, it was Prime Minister Binyamin Netanyahu who broke with the past — in one of a series of diversions and obstacles Netanyahu has come up with anytime he is pressed. He wins in the short run, but ultimately, he is turning himself into a version of Soviet Foreign Minister Andrei Gromyko, “Mr. Nyet,” a man who will be bypassed by history.

Here is what Netanyahu’s immediate predecessor, Ehud Olmert, said in a widely reported speech to the Israeli Knesset in 2008: “We must give up Arab neighborhoods in Jerusalem and return to the core of the territory that is the State of Israel prior to 1967, with minor corrections dictated by the reality created since then.” Olmert, a man with a reputation as a hard-liner, said that meant Israel would keep about 6 percent of the West Bank — the major settlements — and give up land elsewhere. This was also the position of Ehud Barak, Israel’s prime minister during the late 1990s.

The Bush administration did not have a different position, as statements from the president and Condoleezza Rice make clear. Here is George W. Bush in 2008: “I believe that any peace agreement between them will require mutually agreed adjustments to the armistice lines of 1949 to reflect current realities and to ensure that the Palestinian state is viable and contiguous.” (The 1949 armistice lines is another way of saying the 1967 borders.)

Or consider this statement from last November: “[T]he United States believes that through good-faith negotiations, the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state, based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements.” That’s not Obama, Bush or Rice, but a statement jointly issued by Secretary of State Hillary Clinton and Netanyahu on Nov. 11, 2010.

Today, Netanyahu says that any discussion of the 1967 borders is treason and that new borders must reflect “dramatic changes” since then. So in three years, an Israeli prime minister’s position has gone from “minor corrections” to “dramatic changes.” Netanyahu’s quarrel, it appears, is with himself. Yet we are to think it is Obama who has shifted policy?

Why did Netanyahu turn what was at best a minor difference into a major confrontation? Does it help Israel’s security or otherwise strengthen it to stoke tensions with its strongest ally and largest benefactor? Does such behavior further the resolution of Israel’s problems? No, but it helps Netanyahu stir support at home and maintain his fragile coalition. And while Bibi might sound like Churchill, he acts like a local ward boss, far more interested in holding onto his post than using it to secure Israel’s future.

The newsworthy, and real, shift in U.S. policy was Obama publicly condemning the Palestinian strategy to seek recognition as a state from the U.N. General Assembly in September. He also questioned the accord between Fatah and Hamas. Obama endorsed the idea of a demilitarized Palestinian state, a demand Israel has made in recent years. Instead of thanking Obama for this, Netanyahu created a public confrontation to garner applause at home.

Netanyahu’s references to the “indefensible” borders of 1967 reveal him to be mired in a world that has gone away. The chief threat to Israel today is not from a Palestinian army. Israel has the region’s strongest economy and military, complete with an arsenal of nuclear weapons. The chief threats to Israel are from new technologies — rockets, biological weapons — and demography. Its physical existence is less in doubt than its democratic existence as it continues to rule millions of Palestinians in serf-like conditions — entitled to neither a vote nor a country.

The path to resolving the Israeli-Palestinian conflict has been clear for 20 years. Israel would cede most of the land it conquered in the 1967 war to a Palestinian state, keeping the major settlement blocks. In return, it would get a series of measures designed to protect its security. That’s why the process is called land for peace. The problem is that Netanyahu has never believed in land for peace. His strategy has been to put up obstacles, create confusion and wait it out. But one day there will be peace, along the lines that people have talked about for 20 years. And Netanyahu will be remembered only as a person before the person who made peace, a comma in history.

The unspoken message that the Obama administration appeared to send Israeli Prime Minister Benjamin Netanyahu

last week is this: Stop behaving like an ungrateful friend.

Ever since Netanyahu’s government blindsided Vice President Biden during his recent visit to the Jewish state with an announcement that it will build 1,600 housing units in East Jerusalem, the Obama administration has been smarting.

And for good reason.

Of all the hurdles to an enduring peace deal between Israel and the Palestinians, the fate of Jerusalem— which both claim as their capital — is the most daunting. Every time Israel breaks ground on more housing there, the peace lamps flicker.

Reeling from Israel’s announcement, the Obama administration urged Netanyahu to rescind the decision. In a phone call, Secretary of State Hillary Clinton told the prime minister that the new construction was “a deeply negative signal” about Israel’s relationship with the United States. The Israeli government “needed to demonstrate not just through words but through specific actions” its commitment to that relationship and the peace process, Clinton said, according to State Department spokesman P. J. Crowley.

But in a speech last week in Washington to the American Israel Public Affairs Committee, Netanyahu thumbed his nose at these concerns. “Jerusalem is not a settlement; it’s our capital,” he proclaimed.

Israel’s benefactor

The United States is Israel’s oldest and closest friend. And since its creation in 1948, Israel has been the largest cumulative recipient of American foreign aid. In addition to now receiving nearly $3 billion annually in grants from this country, Israel has gotten billions of dollars worth of loan guarantees since 1972 to help build housing and shore up its economy.

While Israel is forbidden from using any of this money to construct housing in its occupied territory, the largesse frees Israel to use other parts of its budget to fund such projects. Not to mention that without U.S. military assistance, Israel would struggle to fend off its enemies.

A costly commitment

Our support of Israel is costly in non-monetary ways, too.

“The enduring hostilities between Israel and some of its neighbors present distinct challenges to our ability to advance our interests” in that part of the world, Gen. David Petraeus, the commander of U.S. forces in Afghanistan and Iraq, told the Senate Armed Services Committee this month. “Arab anger over the Palestinian question” hurts this country’s relationship with other governments in the region and “weakens the legitimacy” of moderate Arab leaders, he said.

And while unemployment in Israel dropped to 7.4% in the last quarter of 2009, joblessness during that period in the U.S. hovered around 10%.

The investment of treasure, and as Petraeus hinted, perhaps U.S. blood, on behalf of Israel should evoke deep gratitude. Instead, Netanyahu’s government takes a go-it-alone approach when it serves Israel’s interest — the rest of the world be damned.

The United States is right to champion Israel’s right to exist, of course, and to provide an umbrella of protection to help ensure the Jewish state’s survival. But the Netanyahu government strains this longstanding friendship when it pursues a course of action that unnecessarily inflames passions in the Arab world and weakens the ability of moderate Arab leaders to talk peace.

Britain, France, the EU and the Arab League have all added their protests against the decision.

The housing row has overshadowed a visit by US Vice-President Joe Biden which is meant to promote a new round of US-led negotiations.

He has condemned the move, saying it undermined trust in the peace process.

Israel and the Palestinians had agreed to hold indirect “proximity talks” in a bid to restart the process, which has been stalled for 17 months.

But earlier this week it approved 1,600 new homes for ultra-Orthodox Jews in East Jerusalem.

The international community considers East Jerusalem occupied territory and building on occupied land is illegal under international law.

Israel regards East Jerusalem – which it annexed in 1967 – as its territory, but Palestinians want it as the capital of their future state.

‘Ill-timed’

UK Foreign Secretary David Miliband described the Israeli move as “a bad decision at the wrong time”.

“It will give strength to those who argue that Israel is not serious about peace,” he said.

“Along with our EU partners, I condemn it as certain to undermine the mutual confidence we need.”

French Foreign Ministry spokesman Bernard Valero said the decision was “completely ill-timed”.

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Israel under pressure over East Jerusalem homes