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Obama's speech: The view from Jerusalem

President Barack Obama spelled out what he expects of the Israeli government in his Cairo speech, issuing a challenge that most commentators here believe Prime Minister Benjamin Netanyahu has no way of meeting.

Obama’s speech, carried live on all three main Israeli television stations, made clear his firm opposition to any sort of building in Israel’s West Bank settlements. “This construction violates previous agreements and undermines efforts to achieve peace,” Obama said. “It is time for these settlements to stop.”

The realization that Obama is serious about halting settlements has been growing in Israel since Secretary of State Hillary Clinton visited in early March. At first Israeli politicians and diplomats thought it could be dealt with by the same sleight of hand that stymied previous administrations — Israel would agree to a freeze on settlement construction, except for “natural growth” to accommodate the children of existing settlers. In reality that meant as much building as Israel wanted.

Since Netanyahu’s visit to Washington two weeks ago, aggrieved Israeli government officials (who weren’t immediately available to comment on Obama's speech) have complained that there were unwritten agreements with the Bush White House allowing Israel to build in the settlements, provided they pulled out of “illegal outposts” — mainly composed of a few young settlers living in shipping containers on hillsides across the valley from existing settlements.

Obama’s speech made it clear that such unwritten promises are not part of the debate.

To soften the blow, he tried to reassure Israelis. He spoke of Israel’s right to exist and of the traumas of the Holocaust, which even today shapes Israeli political attitudes. (He mentioned the exact figure of 6 million Jewish victims of the Holocaust. That’s reassuring for Israelis, who criticized Pope Benedict on his visit to the Holocaust Memorial in Jerusalem last month when he referred only to “millions.”)

There was no reassurance for Netanyahu, however.

“The people of Israel has no need to be worried. This government has something to be worried about,” said Eli Fouda, professor of Islamic studies at the Hebrew University here. “Obama gave a lot of legitimacy to the Palestinians and was against the settlements, not just the outposts. Can this government draw that line?”

Netanyahu’s coalition includes the center-left Labor Party, but it’s mostly made up of rightist and religious parties. His own center-right Likud Party is not least among the supporters of the 282,000 West Bank settlers. If one includes the Israeli residents of East Jerusalem, which was occupied after the 1967 Middle East War, the settlers number almost 500,000. In a country of 7 million, that’s a considerable force.

“We’re not the 51st state of the USA,” said Moti Yogev, deputy head of the Binyamin Regional Council, which includes some of the large West Bank settlements north of Jerusalem. “The settlements will only grow. We’ll grow and have children here.”

Obama also noted that the Palestinians have obligations under previous agreements. He specified that Hamas, which governs in Gaza, must “recognize Israel’s right to exist.” Many of his other points about democracy and corruption, which were directed at the Arab world in general, could apply rather forcefully to the Palestinian Authority, which rules the West Bank.

Essentially the U.S. president said what most diplomats and politicians have been saying for some years: the shape of a final agreement is clear; the longer it’s delayed, the more events on the ground make it unlikely that such an agreement could be implemented. “It is time for us to act on what everyone knows to be true,” Obama said.

Obama’s speech gives a new jolt of energy to Israel’s opposition, particularly the Kadima Party, which led the government until the February elections and was hardly an arch-foe of settlement construction back then.

“The path is clear — two states for two people,” said Zeev Bielski, a Kadima legislator. “We’ll have to pay a price for that.”

Netanyahu knows he’ll be the one to pay the political price if he makes a wrong move now in his balancing act between Washington, the settlers, and his own coalition.

He could take the struggle to Capitol Hill, where Obama’s speech will have unnerved many pro-Israel congressmen. But when he did that to President Bill Clinton during his first term as Israel’s Prime Minister, Netanyahu only succeeded in alienating the White House and convincing Israeli voters that he was destroying relations with their best international ally.

Most likely he’ll keep the focus on the outposts, removing angry young settlers by force in scenes which — when broadcast on international cable news channels — will make it look like the Israelis have the bit between their teeth.

But if Obama’s as serious as he seems to be, he’ll have his diplomats keep count of new apartments in the bigger settlements around Jerusalem (which Israel considers legal, even if the rest of the world doesn't). He won’t be distracted by scuffles on remote, dusty hilltops.

Unless something gives, Obama has set a course for a big confrontation with the Israeli government.