Ukraine's leading English-language newspaper since 1995

Back-dropped by the golden shrine of the Dome of the Rock, Dr. Jill Biden, wife of U.S. Vice President Joseph Biden, not present, looks on during her visit to Jerusalem's Old City, on March 9. MOSCOW (AP) — An extraordinary test of wills between the United States and Israel has left the Obama administration a stronger negotiator both with its closest ally in the Middle East and with Arab nations needed to broker peace with the Palestinians.

The U.S. appears likely to pull Israel and the Palestinians back toward preliminary peace talks after more than a week of harsh words about Israeli housing policies that Arabs and many Americans see as land grabs.

The way ahead probably will become clearer in coming days as Secretary of State Hillary Rodham Clinton meets with Israeli Prime Minister Benjamin Netanyahu in Washington as early as Monday and U.S. Mideast envoy George Mitchell resumes his shuttle diplomacy Sunday.

Netanyahu's meetings with U.S. officials will test the limits of U.S. influence over its closest ally in the Middle East and the right-wing Israeli leader's latitude with even more hawkish elements of his fractious governing coalition.

The U.S.-Israeli dustup began when Israel announced plans to build 1,600 new apartments for Jews in contested east Jerusalem, which the Palestinians want to serve as their capital. The announcement was made during a visit to Israel by Vice President Joe Biden, deeply embarrassing the Obama administration just as it believed indirect talks between Israel and the Palestinians were about to begin. The Arab League abruptly withdrew its endorsement of the preliminary talks, to be managed by Mitchell.

Palestinians want Israel to halt all construction of settlements in the West Bank and east Jerusalem. They claim those areas for a future state, along with the Gaza Strip.

Clinton condemned the Israelis for their action, even questioning the Jewish state's commitment to its security relationship with Washington. But having now eased off, the administration is giving Netanyahu political breathing space while saddling him with a political debt that Washington hopes will lead him to engage more forthrightly in peace talks with the Palestinians.

From the Arab point of view, the administration's willingness to tussle with Netanyahu over a key issue in the peace process can be seen as evidence of U.S. evenhandedness.

There is little prospect of reaching an early settlement of the long-running conflict, but talks under almost any conditions are a diplomatic coup for President Barack Obama, who pledged as a candidate that he would make peace a priority and not wait for perfect conditions that might never come.

Talks broke off more than a year ago, in the closing days of the Bush administration.

Mitchell canceled plans to go to the region last week because of the breach. Once Netanyahu addressed U.S. demands that Israel make up for the housing announcement, Clinton dispatched Mitchell to make preparations for the planned talks in which he will be the intermediary.

The Israeli leader called Clinton on Thursday to present his response, and although details have not been made public, Clinton indicated Friday that it was good enough — she called it "useful and productive" — to send Mitchell back to the region.

Although Clinton mentioned no specifics, one element of Netanyahu's response apparently was to endorse the go-ahead for a long-stalled housing project in the Gaza Strip, where poor humanitarian conditions are a growing source of worry in Europe and elsewhere. In a joint statement after their Moscow meeting Friday, the so-called Quartet of Mideast peacemakers — the U.S., Russia, the European Union and the United Nations — called attention to the Israeli gesture, which it said was among several new Israeli moves to ease conditions in Gaza.

Steven A. Cook, a Mideast expert at the Council on Foreign Relations, said on the think tank's Web site Friday that the U.S.-Israeli divide over settlements is evidence that Israel and Washington are at odds about a two-state solution — an outcome to peace talks in which Israel and a viable, independent Palestinian state would exist side by side.

"Regardless of the way they have chosen to approach the issue, Washington's support for a two-state solution to the Palestinian-Israeli conflict puts it in direct conflict with Jerusalem," he wrote.

Michele Dunne, a Mideast analyst at the Carnegie Endowment for International Peace, said in an e-mail exchange Friday that the decision to send Mitchell back to the Middle East this weekend is a clear sign that the U.S. has decided to let Netanyahu off the hook for now.

"It seems that the U.S. has decided to accept whatever confidence building measures Netanyahu offered," she said, adding that another telltale sign will be whether Obama chooses to see the Israeli leader while he's in Washington.

"U.S. actions will be shaped largely by whether Obama believes Netanyahu is capable of real moves toward peace or not," Dunne said.

For her part, Clinton apparently holds that view of Netanyahu.

In an interview with the British Broadcasting Corp., Clinton was asked Friday whether it was worth the risk to have escalated tensions with Israel over the settlements issue.

"I think we're going to see the resumption of the negotiations track, and that means it is paying off," she said, because the main goal is to get the two sides back to bargaining.