Haaretz claims it knows the demands made by US Secretary of State Hillary Clinton in a telephone conversation with Netanyahu:
1. Investigate the process that led to the announcement of the Ramat Shlomo [Israeli settlement in East Jerusalem] construction plans in the middle of Biden's visit. The Americans seek an official response from Israel on whether this was a bureaucratic mistake or a deliberate act carried out for political reasons.
2. Reverse the decision by the Jerusalem District Planning and Building Committee to approve construction of 1,600 new housing units in Ramat Shlomo.
3. Make a substantial gesture toward the Palestinians enabling the renewal of peace talks. The Americans suggested that hundreds of Palestinian prisoners be released, that the Israel Defense Forces withdraw from additional areas of the West Bank and transfer them to Palestinian control, that the siege of the Gaza Strip be eased, and that further roadblocks in the West Bank be removed.
4. Issue an official declaration that the talks with the Palestinians, even indirect talks, will deal with all the conflict's core issues: borders, refugees, Jerusalem, security arrangements, water, and settlements.
Netanyahu had already announced the convening of a committee to look into the settlements issue. On Monday, however, he answered a question from a Likud Party member with the declaration that construction would continue unabated. Then, in the Knesset, he signalled that there will be no "concession" in East Jerusalem:
For the past 40 years, no Israeli government ever limited construction in the neighborhoods of Jerusalem.
So, what is this all about? When Israel's ambassador to the United States, Michael Oren, declares that U.S.-Israeli relations face their worst crisis in 35 years, is he suggesting that West Jerusalem should compromise or that Washington should accept Netanyahu's defiance?
Amidst the turmoil, Washington is "hopeful" of the future of the "proximity talks". State Department official Philip J. Crowley said on Monday:
[Referring to indirect peace negotiations between Israel and the Palestinians] They have begun. I'm confident that there will be another round of proximity talks.