When Barack Obama was campaigning to be the US president in late 2008, he said that achieving a peaceful resolution to the Israeli-Palestinian conflict would become a focus of his administration if elected.

Shortly after taking office, he called on Israel to stop building settlements in the West Bank and East Jerusalem. 

About 500,000 Jews live in settlement blocs and smaller outposts built in the West Bank and Arab East Jerusalem, territory captured by Israel in the 1967 Six Day War.

Obama pressed Binyamin Netanyahu, the Israeli prime minister, to halt all settlement activity when the two met in Washington in May 2009.

Although Netanyahu has said he has "no intention to construct new settlements", he nonetheless reiterated that "it makes no sense to ask us not to answer to the needs of natural growth and to stop all construction." 

Natural Growth 

In early June, Netanyahu defended his government’s position to allow for "natural settlement growth" by claiming that the administration of George Bush, Obama’s predecessor, had allowed for the expansion of existing settlements.

However, US officials, including Hillary Clinton, the US secretary of state, denied that such a commitment had ever been made.

Nevertheless, Netanyahu hardened his position and said that his government would proceed with the completion of 2,500 housing units already under construction.

In late June, Netanyahu outlined his government’s vision of a future Palestinian state and said that new realities must be acknowledged:

"This policy must take into account the international situation that has recently developed. We must recognise this reality and at the same time stand firmly on those principles essential for Israel."

He also said any future Palestinian state must be demilitarised and acknowledge Israel’s right to exist.

Lamis Andoni, a Middle East political analyst, told Al Jazeera that Netanyahu’s speech offered nothing new to the Palestinians, made no concessions on settlements and was "a speech reminding the vanquished have no rights beyond accepting the terms of their defeat".

Sheikh Jarrah Evictions
 
In July, US officials tried unsuccessfully to prevent Israeli authorities from converting an old Arab hotel in the Palestinian neighbourhood of Sheikh Jarrah into 20 Jewish apartments and a three-level underground car park.

Later that month, Washington dispatched George Mitchell, the US envoy to the Middle East, to meet Israeli, Palestinian and Syrian leaders in a renewed effort to reach a peace settlement.

However, a week later, Israeli authorities forcibly evicted two Palestinian families from their homes in the Sheikh Jarrah neighbourhood in East Jerusalem after a court rejected an appeal against their eviction.

The evictions were aimed at facilitating plans currently under review by the Jerusalem municipality to create up to 350 new housing units for Israelis, as well as a synagogue.

Jerusalem Not a Settlement

In early August, Netanyahu described the 2005 Israeli withdrawal of settlers from settlements in the Gaza Strip "a mistake", and pledged that his government "will not evict any more people from their homes".

The Israeli prime minister’s position threatened to develop into a rift between Israel and the US, with Tel Aviv continuing to reject Washington’s calls to freeze the building of settlements, which are considered illegal under international law.

Netanyahu’s comments came as he summoned an Israeli diplomat from the US after he circulated a memorandum accusing Tel Aviv of "strategic damage" to Israel’s ties with Washington.

A brief intended for internal circulation was leaked to Israel’s Channel 10 television, which quoted Nadav Tamir, Israel’s consul in Boston, as saying differences with Washington over Jewish settlements had hurt relations.

In mid-August, ahead of another Mitchell tour to the Middle East, Netanyahu said: "I’ve made it clear … that Jerusalem is a sovereign capital of Israel and we accept no limitations on our sovereignty … to put a fine point on it, Jerusalem is not a settlement."

A few days later, Israel authorised construction of hundreds of additional housing units in the West Bank. In response, the White House merely said that it "regretted" this action, adding that the "US commitment to Israel’s security is and will remain unshakable.".

The Israel Lands Administration then issued tenders for 468 new apartments in East Jerusalem.

Slim Hopes
 
By mid-September, talks between the US and Israel on halting settlement construction and expansion appeared to have hit an impasse.

Mitchell returned to Washington after failing to secure a compromise deal for renewed peace talks between Israel and the Palestinians.

The US envoy had hoped to reach a deal on a settlement freeze that would allow the Israelis and the Palestinians to meet on the sidelines of the UN General Assembly in New York.

On September 22, Obama is scheduled to meet Netanyahu and Mahmoud Abbas, the Palestinian president . But Abbas remains steadfast in refusing to sit down for talks with the Israeli PM unless he agrees to a settlement freeze.

Jacky Rowland, Al Jazeera’s Jerusalem correspondent, said: "The hopes for that big symbolic meeting are looking slim to non-existent … things are certainly looking distinctly unhopeful."

Philip Wilcox, a former US consul in Jerusalem and current president of the Foundation for Middle East Peace think-tank, told Al Jazeera there is still hope for talks.

"I would say that it is the end of the beginning rather than the beginning of the end," he said.

"The settlement freeze was designed as a confidence-building measure, as a preliminary to real negotiations on the issues that really count.

"Freezing settlements would still leave 500,000 settlers in the West Bank and East Jerusalem.

"The real issues are borders, refugees, Jerusalem, the settlements and security."
 
(Aljazeera.net English and Agencies)