By Gwen Ackerman and Peter S. Green March 22 (Bloomberg) — Israeli Prime Minister Benjamin Netanyahu arrives in Washington to meet President Barack Obama after accepting some U.S. demands to calm a dispute over east Jerusalem construction plans and remove obstacles to peace talks. Netanyahu dropped previous objections to raising central issues of the Israeli-Palestinian conflict during proposed U.S.- mediated “proximity” talks with the Palestinians intended to pave the way for direct negotiations. “Was Netanyahu’s arm twisted into making this last concession, and may the Americans twist more?” said Dan Schueftan , a political scientist at Haifa University. “The answer is yes.” It remains uncertain whether Netanyahu’s move will fully satisfy the U.S., or the Palestinians who want Israel to freeze all settlement construction including in east Jerusalem, a condition the prime minister continues to resist. At stake are whether the proximity talks will begin, and whether the U.S. and Israeli governments can repair the damage to their relationship created by the housing dispute. Netanyahu told his Cabinet yesterday that in the proximity talks “each side will be able to raise its positions on all the issues in dispute.” That opens the way for discussion on the future status of Jerusalem and Palestinian refugees, issues that have proven the most intractable in resolving the conflict. Meeting With Envoy Netanyahu met in Jerusalem afterwards with the U.S. Middle East envoy George Mitchell . He received a formal invitation to meet Obama tomorrow just hours before boarding his plane for the trip to Washington. While in the U.S. capital, the prime minister is also scheduled to meet Secretary of State Hillary Clinton and address the U.S.’s largest pro-Israel lobbying group, the American Israel Public Affairs Committee . He will dine with Vice President Joe Biden tonight. Netanyahu’s agreement “to negotiate final status issues” is “one step in the right direction,” said Palestinian Authority spokesman Ghassan Khatib . “We are waiting to hear the Israeli response to the rest of the requirements, especially the issue of illegal building of settlements in occupied territories, including Jerusalem.” Jerusalem Policy Netanyahu yesterday reiterated the long-held Israeli position that all of Jerusalem is Israeli territory. “Our policy toward Jerusalem is the same policy of all Israeli governments in the past 42 years and it has not changed,” Netanyahu said before the Cabinet meeting. “From our point of view, construction in Jerusalem is like construction in Tel Aviv.” Israel’s TA-25 Index closed 0.5 percent lower at 1,209.09 yesterday. The benchmark Mimshal Shiklit note due February 2019 dropped 0.19 shekel to 109.36 at the close. The yield on the 6 percent security rose four basis points to 4.75 percent. The announcement during Biden’s visit to Israel earlier this month that Israel had approved plans to build 1,600 new housing units in east Jerusalem derailed the planned start of the proximity talks and earned the Netanyahu government rebukes from Biden, Obama and Clinton. Israel captured east Jerusalem from Jordan in the 1967 war and its annexation of the area later was never internationally recognized. Palestinians seek the territory as the capital of a future state. ‘Mutual Confidence-Building’ In a telephone call with Clinton on March 18, Netanyahu proposed “mutual confidence-building steps” for Israel and the Palestinian Authority to defuse the tensions over the east Jerusalem project. According to a U.S. official who spoke on condition of anonymity, Washington seeks a freeze of the planned housing units along with gestures to bolster the Palestinian Authority. “It’s not about any one particular action,” Clinton said in a March 19 interview with Bloomberg TV. “It’s about the overall atmosphere that is necessary to demonstrate clearly and unequivocally the commitment to the negotiations and the outcome of a two-state resolution.” ‘Time to Resolve’ Biden said March 11 that because construction of the housing units will take several years, “it gives negotiations the time to resolve this, as well as other outstanding issues.” Netanyahu is considering more gestures to the Palestinians, said an Israeli official, speaking on condition of anonymity because he wasn’t authorized to discuss the issue with the press. They include easing restrictions on the Gaza Strip, the official said. Gaza is controlled by the Islamic group Hamas, which the U.S. and Israel regard as a terrorist organization. Both Netanyahu and Obama have much at stake in resolving the disagreement over the housing plan. For the U.S., making progress on the Israeli-Palestinian conflict is important to win Arab support for stopping Iran’s nuclear program, withdrawing U.S. troops from a stable Iraq and battling extremists in the Middle East, Afghanistan and Pakistan, according to U.S. officials. “Arab anger over the Palestinian question limits the strength and depth of U.S. partnerships with governments and peoples” in the Middle East and South Asia and “weakens the legitimacy of moderate regimes in the Arab world,” General David Petraeus , the commander of U.S. forces in the Middle East, told a U.S. Senate committee March 16. Netanyahu is faced with the potentially competing priorities of preserving his governing coalition, which includes elements such as the religiously oriented Shas party that support the east Jerusalem housing project intended for Orthodox Jews, and maintaining Israel’s relationship with its chief strategic ally. Obama said March 17 that he doesn’t see a crisis in relations with Israel. “Israel’s one of our closest allies and we and the Israeli people have a special bond that’s not going to go away,” Obama said in an interview with the Fox News Channel. “But friends are going to disagree sometimes.” To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net . Peter S. Green in New York at psgreen@bloomberg.net
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Netanyahu Accepts Broad Middle East Talks While Standing Firm on Jerusalem
