Published On:Thursday, March 18, 2010

WASHINGTON (AP) -- The path to peace in the Middle East gets no easier just because rage over a diplomatic slap by Israel is giving way to calmer words.

President Barack Obama faces the same reality, only more difficult now: Mideast peace is hard to envision, choices are limited, and expectations for the Nobel Peace Prize-winning president are soaring. He has shown a willingness to call out an ally for undermining peace, yet he now endures criticism for reproaching a friend.

Obama's strategy has been to leave the scolding and diplomatic work to lieutenants while the fallout of an embarrassing rift is fresh. He appears to be staying on the sidelines to avoid escalating the fight, ever focused on domestic concerns before an economically bruised nation.

But it will ultimately be on him to find a way out, let alone forward, on Mideast peace.

At stake is international credibility for Obama, and stability for a region that bedevils U.S. presidents even when friends aren't fighting.

The White House is standing by its condemnation of its ally Israel after a housing decision that had ramifications across the spectrum: an undermined peace process, an insulted U.S. vice president and a blow to the trust between two governments whose relationship is central to security in an explosive part of the globe.

Israel's announcement of plans to build 1,600 more Jewish homes in disputed east Jerusalem -- with Vice President Joe Biden in the midst of a relationship-building visit -- meant that one of the settlements that has impeded negotiations with Palestinians would only get larger.

First came uproar, and since then, a smoothing.

Biden and Israeli Prime Minister Benjamin Netanyahu have talked anew. Secretary of State Hillary Rodham Clinton, the face of the U.S. response, dressed down Netanyahu by telephone last week and is still waiting back for responses from him, but she assures that the bond between the U.S. and Israel is unshakable.

Yet it sure seems shaken, adding to the difficulty of Obama's efforts.

On Wednesday, Obama used an interview with Fox News to reiterate the United States' ties to Israel: "Friends are going to disagree sometimes."

Yet he also acknowledged there were many competing views on how to bring compromise to a region where peace has proved elusive.

"There is a disagreement about in terms of how we can move this peace forward," Obama said. "Obviously, when I sent Vice President Biden there -- it was at a moment when we were trying to restart talks between the Palestinians and the Israelis -- the actions that were taken by the interior minister in Israel weren't helpful to that process. Prime Minister Netanyahu acknowledged as much and apologised for it. What we said is: We need both sides to take steps."

Obama must show that he means it when demanding good faith and concessions toward peace from Israel, even if that means angering powerful political forces at home whose support is vital to his agenda. He must be careful not to overplay that hand.

"At this point, it doesn't make sense for the president to get involved in the dispute in any public way," said Haim Malka, a Middle East scholar for the Center for Strategic and International Studies in Washington.

"It's not in the interest of the Obama administration or the Netanyahu government to prolong the tension because there are more pressing common security challenges in the region to deal with," he said. But he added that Obama can't "abandon the issue of Israeli-Palestinian talks which he has publicly supported."

The timing of the controversy comes as Obama is already consumed with a fight to overhaul the U.S. health insurance system. He is the manager of two wars, a jobless economic recovery and a political party heading toward House and Senate elections in an unforgiving environment for incumbents.

"He's got to figure out what's really important to him," said Aaron David Miller, formerly a Middle East negotiator in Republican and Democratic administrations and now a scholar at the Woodrow Wilson Center.

"If Arab-Israeli peace is really important, then he's going to have to make certain adjustments in an effort to go after it," he said.

"Chances are, rather than 'breakthrough' or 'breakdown' with respect to the U.S.-Israeli relationship, you're going to end up with 'muddle through.'"

n (This article is by Ben Feller of the Associated Press)