
Increasingly fractious relations between the US and Israel  hit a low unseen in nearly two decades today after the Jewish state rejected  President Barack Obama's demand for an end to settlement construction in the  West Bank, and Washington threatened to "press the point".The dispute, which  blew into the open hours before Obama was to meet the Palestinian leader,  Mahmoud Abbas, reflects the depth of the shift in American policy away from  accommodating Israel to pressuring it to end years of stalling on serious  negotiations over the creation of a Palestinian state while continuing to grab  land in the occupied territories.Obama put down a marker at a difficult meeting  with the Israeli prime minister, Binyamin Netanyahu, in Washington this month  when he demanded a halt to the expansion of settlements, which now house close  to 500,000 Jews in the West Bank and occupied East Jerusalem and are a major  obstacle to the establishment of an independent Palestine.The US secretary of  state, Hillary Clinton, made an unusually blunt call on Wednesday for a halt to  settlement growth, including the construction of so-called "outposts" ? small  informal settlements that are illegal even under Israeli law ? as well as the  building of new houses in existing Jewish enclaves which the government  describes as "natural growth".Clinton said Obama "wants to see a stop to  settlements ? not some settlements, not outposts, not natural growth  exceptions.We think it is in the best interests of the effort that we are  engaged in that settlement expansion cease." She said the Americans "intend to  press that point".Israel is committed to stop all settlement construction under  the 2003 US road map to peace.
Yesterday the Israeli government spokesman,  Mark Regev, said construction would continue inside existing  settlements.
"Israel ...
will abide by its commitments not to build new  settlements and to dismantle unauthorised outposts," he said.
"As to existing  settlements, their fate will be determined in final status negotiations between  Israel and the Palestinians.
In the interim period, normal life must be  allowed to continue."Israel defines normal life as the construction of homes to  accommodate the children of Jewish settlers when they grow up and  marry.
Critics say that almost nowhere else in the world is it considered a  right to build a house next to your parents' house.Netanyahu has offered to  remove 26 of more than 120 outpost settlements, but both the US and Palestinians  remain sceptical.
Israel has broken similar pledges repeatedly in recent  years.The former prime minister, Ariel Sharon, promised President George Bush Jr  to his face that the outposts would come down, but instead the Israeli  government continued to allow new ones to be built, often with the assistance of  the military and other state authorities.Settlements have long been viewed as a  litmus test of Israel's intent.
Even at the height of the Oslo peace process,  Israel more than doubled the number of Jews it moved to live in the West Bank,  raising fundamental questions among the Palestinians as to whether it was more  interested in grabbing land than peace.The dispute over settlements, and  Netanyahu's defiance of Obama's call, is likely to set the tone for future  relations as the White House attempts to radically change its approach by  pressing Israel to move swiftly toward serious negotiations to end the  occupation and establish an independent Palestinian state.Robert Malley, former  special assistant for Arab-Israeli affairs to President Bill Clinton, said: "The  surprise in this is not the Israeli position.
The surprise the forcefulness  of the American one.
Rarely have we seen it at this pace and with this  intensity and unambiguity.
The US has taken a position that doesn't give much  wriggle room at all to the Israeli government".
But Malley said it remained  unclear how far the White House would press Israel.Some US analysts say that the  settlement issue is a good one for Obama to use to press Netanyahu because even  among Israel's supporters in congress there is not much backing for the  continued expansion of Jewish enclaves in the Palestinian territories.Other  analysts say Obama will have to be careful not to allow a protracted dispute  over the settlements to stall broader talks on the creation of a Palestinian  state.But questions remain over how far Obama is prepared to push Israel when  Congress remains strongly sympathetic to the Jewish state and the pro-Israel  lobby continues to wield powerful influence.Obama's public stand on settlements  is also intended to strengthen Abbas, who is politically weak and under pressure  from Hamas.Palestinian officials say Abbas plans to raise the settlement  issue as one of the major obstacles to the peace process.Israel's intelligence  minister, Dan Meridor, met in London earlier this week with the US Middle East  envoy, George Mitchell, for follow up meetings to Netanyahu's Washington visit,  at which the settlement issue was also pressed.