Israeli goodwill may be running on empty. From Reuters:
A day after President Barack Obama told Israel its key ally would no longer tolerate building settlements in the West Bank, the European Union was considering using its trade clout to bolster U.S. pressure, diplomats said.
The EU is the Jewish state's biggest trading partner and one option it may have is to crack down on fruit, vegetables, olive oil and other farm produce grown by Israeli settlers on occupied Palestinian land.
Some European governments have long suspected such products are entering the EU at low import tariffs reserved for output labeled as coming from Israel proper.
It was the latest sign of the depth of the dispute between Prime Minister Benjamin Netanyahu's government and its closest allies.
In Washington, Secretary of State Hillary Clinton hit back hard at comments by a senior Israeli negotiator who said Obama's predecessor George W. Bush privately agreed to expansion of settlements. That was not U.S. policy, she insisted.
A senior Israeli diplomat said Israel was still trying to figure out how seriously to take the threats: "The question in our minds is: How much staying power does Obama have?"
Obama's landmark address to the Muslim and Arab world in Cairo on Thursday dominated Israeli media.
Much attention was paid to his declaration that all further settlement building was not "legitimate" in American eyes and his call for a Palestinian state -- both elements that Netanyahu has not wished to accept.
So U.S. and EU diplomats are discussing "pressure points" that could be used to persuade the prime minister, who risks seeing his coalition break down if he makes concessions. Envoys may meet on Wednesday to coordinate a response, diplomats said.
The comment from the Israeli diplomat speaks volumes. To the Knesset, it's a question of how much staying power Obama really has. In other words, Israel is prepared to move only as far as it's forced to and no further regardless of its promises and assurances. Fair enough. If the only thing that's going to work are strongarm tactics then let's drop the illusions and treat Israel as it demands.