Published: 7:00AM BST 28 Mar 2010
Last night Arab League officials warned of a complete failure in the peace process, and spoke of alternative plans to "face Israel". Israel's "inner cabinet" discussed how to rescue its relations with the United States after the prime minister, Benjamin Netanyahu, was snubbed by a frustrated Barack Obama in Washington last week.
The split between Israel and the US comes at a critical time as Iran's nuclear ambitions grow steadily nearer to being realised.
Here BENNY MORRIS explains why this is a threat to world peace.
Without doubt, the Middle East's rogue or terrorist leaders, from Iran's Mahmoud Ahmedinejad to Hizbollah's Hassan Nasrallah to Hamas's Khalid Mashal, are rubbing their hands with glee.
The year-long rift between the Netanyahu and Obama administrations over Israel's settlement policy in the West Bank and East Jerusalem is threatening to turn into a political rupture just as Israel faces an existential threat which it needs every ounce of American support
In the first decades of Israel's existence, when it fought and defeated Egyptian armies, the Eisenhower and Nixon administrations twice twisted arms in Tel Aviv to force Israeli forces to withdraw - first from the Sinai Peninsula (1956-57), then from territory west of the Suez Canal which it had occupied during the October War (1973). But the Americans continued to provide Israel with strategic cover to counter Soviet threats of nuclear destruction and direct military intervention.
Today, Israel faces an Israel-hating Islamist coalition, of Iran, Hizbollah and Hamas, which may soon have nuclear weapons but does so without any certainty about American goodwill and protection.
Barack Obama may say that the United States supports Israel and will not countenance a "nuclear Iran". But most Israelis see Obama as lacking in that basic commitment to and sympathy for Israel that characterised American presidents from Truman through Kennedy to Clinton and George W Bush.
As recently as 2000 and 2005, Israeli prime ministers Ehud Barak and Ariel Sharon felt able to offer or make major territorial concessions to the Palestinians because they knew that Washington would make up any shortfall in security that withdrawing from the West Bank and Gaza might entail.
Obama's deliberate coldness toward America's traditional ally has not been lost on the Israeli public. He spoke in Cairo last year to the Muslim world, while avoiding a "balancing" visit to Jerusalem. He pettily humiliated Netanyahu during last week's visit to America (on the evening of their meeting, Obama left Netanyahu for more than an hour stranded in the White House while he dined without his guest). Nor will Washington's overbearing tone be quickly forgotten.
And while, without doubt, Obama's health care bill victory has bolstered his stature in American public opinion and enabled him to face off with Netanyahu, his Democratic Party may yet pay a price in the congressional elections in November.
The pro-Israel lobby in Washington remains powerful, despite recent knocks and the emergence of a small, Obama-supporting dissident Jewish lobby called J-Street.
While American Jews traditionally vote Democrat, Obama's trouncing of Israel may well affect campaign contributions and votes (American Jews, who number more than 5 million, tend to contribute and vote disproportionately).
In the coming weeks, it will become clear whether Israelis interpret Obama's behaviour toward Netanyahu as a personal issue or whether it reflects a deeper disaffection with Israel itself.
Israelis have recently been given grounds for feeling that Netanyahu is an incompetent (and unlucky) prime minister: the international political fallout from the assassination he authorised of Hamas leader Mahmoud al-Mabhouh in Dubai, including Britain's expulsion of the Mossad head of station in London, is still reverberating.
And while most Israelis approve of the killing of a Hamas general and condemn Western and Arab hypocrisy in this regard (MI6 agents have never used non-British passports? Did Dubai's rulers really support Hamas's gun-running activities, in cahoots with Iran, on its soil?), many question the wisdom of the cost-benefit calculus.
Many Israelis have been wary of Netanyahu since his first tenure as prime minister in the late 1990s, when his relations with Clinton were poor. But they will not endorse American interference in Israel's politics or with its
Did the Obama administration embark on its confrontation with Netanyahu in order to force him to switch coalition partners from the two main Right-wing parties Yisrael Beiteinu and Shas to the more agreeable centrist Kadima Party? Or is it merely seeking to freeze the Israeli settlement enterprise, to pave the way for Palestinian re-entry into peace negatiations?
Either way, most Israelis resent Obama's arm-twisting, and it is by no means clear that Israel will soften the widespread desire to retain East Jerusalem while opposing the settlement enterprise in the wider West Bank.
Meanwhile, Ahmedinejad speaks of the destruction of "the Zionist regime", and Iran has spent a decade fashioning the tools with which to achieve this nuclear weapons and the Shihab III rockets to deliver them.
Washington may still be beyond Iranian reach and the Arab Gulf states, while nervous about Iran's bid for regional hegemony and atomic bombs, may rightly feel that they are not the intended targets. But Israelis are keenly aware that they are in Tehran's sights.
Iran is an estimated one to three years away from building the bomb. And its local clients and proxies, Hizbollah in Lebanon and the Hamas in Gaza, have been equipped by Tehran (and Syria) with rockets with which to pound Israel's cities and air bases.
The White House and State Department still speak about mobilising the world community for sanctions to halt Iran's nuclear programme. But Russia and China are not on board for effective sanctions, while Obama and the American military have manifestly no stomach for a military confrontation with Iran.
Indeed, Netanyahu by now may suspect that the Americans have resigned themselves to a nuclear-armed Iran and are relying on deterrence to fend off an Iranian nuclear attack on Israel. But many Israelis fear that the anti-Semitic mullahs may prove less rational than the ageing apparatchiks who ran the Kremlin during the Cold War nuclear stand-off.
The only action that could halt Iran's march toward nuclear weaponry is a strike by Israel. Whether Israel can do so effectively without a green light and some assistance from Washington is unclear.
At a minimum, Israel would need American permission to overfly Iraq and perhaps landing rights, for refuelling and repair, in regional US air bases. Israel may also need additional equipment and weaponry. After an air assault, Israel would need American political backing to prevent Security Council condemnation and sanctions resolutions, and a promise of support and supplies if a wider Middle East war ensued.
While many Arab and Western governments would no doubt privately welcome the destruction of Iran's nuclear facilities, their public posturing would be different.
So far, Obama like George W Bush before him has vetoed an Israeli pre-emptive strike. The Americans are fearful of the chaos that might engulf the Middle East and are aware of their vulnerability in the region. They assume that the Iranians would charge them with complicity, whether or not they were complicit.
It is possible that Netanyahu hoped to reach an agreement with Obama based on a trade-off Israeli concessions on the Palestinians in exchange for America agreeing to an attack on the Iranian installations. But Obama apparently offered Netanyahu nothing, while demanding everything on the Palestinian front.
Washington believes that Palestinian-Israeli friction helps fuel Muslim antagonism towards the US. In its view, the resumption of Israeli-Palestinian peace negotiations or, better still, an Israeli-Palestinian peace accord would reduce this antagonism.
Which brings us to Netanyahu and the problem of Jerusalem. In December 2000, Clinton called for a two-state solution in which the Palestinians would have the Gaza Strip and about 95 per cent of the West Bank. The Arab-populated neighbourhoods of East Jerusalem would constitute the Palestinian state's capital.
Ehud Barak, prime minister at the time, accepted the Clinton parameters, including on Jerusalem. The Palestinians rejected them. And while Netanyahu, under pressure from Obama, may have agreed to the principle of a two-state solution and to limit construction around the West Bank, he has never accepted the principle of dividing Jerusalem. Hence his insistence that Israel continue constructing housing.
For Obama, this means that Netanyahu is not serious about peace and a two-state solution. He is right to the extent that there can be no two-state solution without Palestinian sovereignty over Arab East Jerusalem.
A the same time, Obama has ignored evidence that the Palestinians are averse to a two-state solution. How else to explain the majority Palestinian vote in 2006 for Hamas, which advocates Israel's destruction? Or the rejection by Yasser Arafat (with his colleagues, including Mahmoud Abbas, the Palestinian "president") of Clinton's two-state proposals six years before? Or Abbas's effective "no" to the peace proposals in 2008 of Ehud Olmert? Or Abbas's refusal to recognise Israel as "a Jewish state" while insisting on the Palestinian refugees' "right of return" (which would give Israel an Arab-majority)?
In short, Netanyahu has given Obama ample grounds for frustration and anger and Obama has given Netanyahu ample grounds for suspicion about his real sympathies. And this has happened at a crucial moment in Middle Eastern history, when a nuclear cloud looms over the region.
- Prof Benny Morris teaches at Ben-Gurion University in Israel and is the author, most recently, of '1948, a History of the First Arab-Israeli War' (Yale UP)