Obama must argue that two states are preferable to Netanyahu's dream of 'greater Israel.'

Stephen M. Walt in the WaPo, here

"... Netanyahu's stance hardened as Obama's approval ratings slipped. In July, after U.S. officials tried to halt an Israeli plan to convert an old Arab hotel into 20 Jewish apartments in Sheik Jarrah -- an Arab neighborhood in East Jerusalem -- Netanyahu told his Cabinet that "Jerusalem is not a settlement, and there is nothing to discuss about a freeze there." Underscoring the point, Israeli authorities expelled two Arab families in Sheik Jarrah from homes they had inhabited for 50 years.

.......Why is Netanyahu defying Obama so openly? Because he has long been committed to the dream of a "greater Israel," and the only Palestinian state he might accept would be an archipelago of disconnected enclaves under de facto Israeli control. His Cabinet is even more hard-line, which means his government would collapse if he made meaningful concessions. Furthermore, attempting to remove a substantial portion of the 300,000-plus settlers living in the West Bank could trigger a violent reaction within Israel, possibly even putting Netanyahu at risk of suffering the fate of former primer minister Yitzhak Rabin, who was assassinated by a Jewish extremist in 1995.

Some observers say that Netanyahu's decision to authorize new housing units is merely a sop to his right-wing colleagues and that he will eventually agree to a temporary freeze on settlements and serious negotiations with the Palestinians. But even if he does, history suggests that any pledge to stop settlement expansion would be meaningless. Previous Israeli governments also promised to halt settlement building, most recently in the 2003 "Road Map" agreement that set a formal timetable for Middle East peace. Yet despite these promises, the number of settlers has more than doubled since the early 1990s and has grown by about 5 percent annually since Israel formally accepted the "Road Map" in May 2003.......

Why is Obama letting Netanyahu thwart his efforts? To begin with, the president has too much on his plate -- the economic crisis, the health-care battle, Afghanistan, Iran's nuclear problem -- so the attention he can devote to Israeli-Palestinian peace is limited.

And then there is the Israel lobby. The good news is that there is a new pro-Israel organization, J Street, which is committed to the two-state solution and firmly behind Obama. The bad news is that the American Israel Public Affairs Committee (AIPAC) and other defenders of the status quo remain powerful, and they will surely oppose any attempt to pressure Netanyahu. In May, for example, AIPAC drafted a letter warning Obama to "work closely and privately" with Israel. It garnered 329 signaturesin the House and 76 names in the Senate. During the August recess, 56 members of Congress visited Israel, and House Majority Leader Steny H. Hoyer (D-Md.) told reporters that it was a mistake to make settlement construction the key issue and that there was a "significant difference" between settlements in the West Bank and those in East Jerusalem.

If Obama tries to make aid to Israel conditional on a settlement freeze, Congress will simply override him. Putting real pressure on Israel risks alienating key politicians and major Democratic fundraisers, as well as Israel's supporters in the media, imperiling the rest of Obama's agenda and conceivably his prospects for reelection. Moreover, several of Obama's top advisers, such as Dennis Ross, are enthusiastic supporters of America's "special relationship" with Israel and would almost certainly oppose using U.S. leverage to force Israeli concessions. Obama and special envoy George Mitchell are negotiating with one hand tied behind their backs, and Netanyahu knows it...."