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In retrospect, Vice-President Biden's words at Tel-Aviv University ("I should probably be used to it by now, but I'm always struck every time I come back by the hospitality of the Israeli people") sounded pretty ironic.

Deputy Foreign Minister Danny Ayalon ended his visit to Washington on Thursday - a visit which coincided with the current crisis between Washington and Jerusalem, saying that "it's my understanding that this incident is behind us".

Apparently, it only just began. In an interview both to NBC and CNN on Friday, Secretary of State Hillary Clinton called the announcement to expand building in East Jerusalem "insulting'.

"It was not just an unfortunate incident of timing but the substance was something that is not needed, as we are attempting to move toward the resumption of negotiation", she told NBC's Andrea Mitchell.

After mentioning the U.S. support of Israel?s security and the values shared between the two countries, she resumed discussion of the diplomatic incident. "It was insulting not just to the vice president, who certainly didn't deserve that. He was there with a very clear message of commitment to the peace process and solidarity with the Israeli people. But it was an insult to the United States. The United States is deeply invested in trying to work with the parties in order to bring about this resolution. We don't get easily discouraged, so we're working toward the resumption of the negotiations. But we expect Israel and the Palestinians to do their part, and not to take any action that will undermine the chance to achieve a two state solution".

In an interview with CNN, Clinton explained that the U.S.-Israeli relations "are not at risk," but later that "it was just really a very unfortunate and difficult moment for everyone - the United States, our Vice President, who had gone to reassert America's strong support for Israeli security - and I regret deeply that that occurred and made that view known."

Secretary Clinton said she didn't have any reason to believe Netanyahu knew about it, "but he is the prime minister. It's like the President or the Secretary of State; when you have certain responsibilities, ultimately, you are responsible," she said.

One might expect that at her scheduled appearance at the AIPAC annual conference in Washington in slightly more than a week, Clinton might soften a bit to assuage the renewed bitterness that resulted from Biden's visit, which was intended to provide exactly the opposite.

"Did you mean something by 'Bibi'"?

At the State Department press briefing, Assistant Secretary Philip J.Crowley reported some of the details from Clinton?s phone conversation with Netanyahu, saying that she reiterated the administrations objection not only to the timing, but to the "substance" of the announcement as well. He added that the U.S. "considers the announcement a deeply negative signal about Israel's approach to the bilateral relationship," which "had undermined trust and confidence in the peace process and in America?s interests."

"The Secretary said she could not understand how this happened, particularly in light of the United States' strong commitment to Israel's security. And she made clear that the Israeli Government needed to demonstrate not just through words but through specific actions that they are committed to this relationship and to the peace process," said Crowley.

The following question by one of the reporters, who asked whether Crowley meant something by addressing the Israeli prime minister merely as 'Bibi' ("Knowing that from the podium you all use your words very carefully, you referred to the prime minister as Bibi Netanyahu. Is that intentional? You're not going to quote him using his full first name? You're using a nickname, which could be seen as pejorative by some") definitely provided some comic relief. But in general, the 'c' word that both the Obama administration and the Israeli government carefully avoided since the emergence of tensions finally broke loose - it is a crisis.

The same settlements that grabbed attention when both the Obama administration and the Israeli government made their first steps, and later were swept under the rug, came back to haunt their relationship and the phantom peace process. Those in Washington dealing with the Middle East every now and then have a strong sense of dejavu, but the claim attributed to Netanyahu's aides that the U.S. "initiated" this crisis will for sure drop some jaws in utter disbelief. Attack might be the best defense, but the way this incident develops will block any potential for meaningful negotiations - direct or mediated talks - for a long time.

Here are some highlights from the discussion following the announcement: The Anti-Defamation League was "shocked and stunned by the Administration's public dressing down of Israel by saying it had "undermined trust and confidence in the peace process, and in America's interests".

The National Jewish Democratic Council is "proud of Vice President Joe Biden's trip to Israel and all that it has accomplished, and we support him fully, including his frank and honest words delivered in response to the unfortunately-timed announcement of plans for new housing units made by Israel?s Interior Ministry."

U.S. Rep. Mark Kirk (R-Ill.): "I urge the Administration to spend more time working to stop Iran from building nuclear bombs and less time concerned with zoning issues in Jerusalem. As Iran accelerates its uranium enrichment, we should not be condemning one of America's strongest democratic allies in the Middle East.'

Daniel Levy from the New America Foundation: "In the absence of decisive American leadership, Israel is likely to dig itself deeper into a hole, burying the last vestiges of hope for pragmatic Zionism. And America too will not emerge unscathed. The president can give any number of Cairo speeches and appoint Sen. Mitchell as special peace envoy, Sec. Clinton can appoint Farah Pandit as representative to Muslim communities and Rashad Hussain as envoy to the O.I.C., but these officials had all better be given the cellphone number of the Israeli interior ministry, Jerusalem district planning and building department, because that office and others in Israel's bureaucracy still have the deciding vote in framing America's image in the region."

(http://mideast.foreignpolicy.com/posts/2010/03/11/biden_netanyahu_and_papering_over_the_grand_canyon)

Stephen P. Cohen, president of the Institute for Middle East Peace and Development: "This synchronicity can in no way be dismissed as happenstance or as a resoundingly bad-timing accident. It was intentional, and it was intended to deflate the significance of discussions with a man who has long been the most uncompromising pro-Israel figure in the Obama administration and one of the staunchest supporters of Israel in the Democratic Party and in the United States Congress." Israeli Ministers Yishai and Lieberman are determined to prevent a revival of Israeli-Palestinian negotiations, even though Netanyahu must realize at this point that he can no longer be passive and permissive about the actions and decisions of his more extreme ministers. If he remains silent and inactive in face of these actions, he will have forfeited his leadership."http://www.huffingtonpost.com/stephen-p-cohen/a-resoundingly-bad-timing_b_495756.html

Some expert's opinions at the New York Times:

Aaron David Miller, a former U.S. negotiator for Republican and Democratic administrations, currently scholar at the Woodrow Wilson Center: "If you're hoping for an Israeli-American war, I wouldn't bet on it".. beyond some very tough words by America, don't expect much more?. The administration has yet to figure out how to maintain America's special relationship with Israel (which can serve U.S. interests), yet prevent that bond from becoming so exclusive that Israel acts without consequence or cost, and America has little independence of its own on peace process policies."

Amjad Atallah, director of the Middle East Task Force at the New America Foundation: "The United States has been sending its messages with carrots and great diplomatic restraint. The current Israeli government, in stark contrast, has been responding like a petulant child, outraged that it hasn't been able to get U.S. acquiescence to its own short-term political strategy.There is a great deal at stake in this public and private dispute between Israel and the United States. President Obama should consider responding in a similar manner, by creating his own facts on the ground, and ending all forms of U.S. cover and support of the settlement enterprise and other policies that sustain the occupation."

David Makovsky, the Ziegler Distinguished Fellow at the Washington Institute for Near East Policy: "It would be suicidal for Netanyahu to seek to sabotage such a friendly visit given Israel's supreme interest in both of these issues. A deliberate move to undermine the Biden visit could fatally undermine Netanyahu's efforts to improve ties with the Obama administration. Even Netanyahu's biggest critics do not think he would act in a manner so counterproductive to Israel's own concept of the national interest.. Something more practical is required: namely that Israelis and Palestinians reach a baseline agreement that neither party will expand into the neighborhoods of the other in East Jerusalem. This is more attainable than a freeze, and could avoid flashpoint incidents in the future."

P.S. In a book "Myth, illusions and peace: Finding a New Direction for America in the Middle East," published last summer, which Makovsky co-authored with Dennis Ross, the two wrote: "...The U.S. at this point cannot afford to raise expectations again." At this point, however, the question is more how low can these expectations go.