President Barack Obama has promised the Palestinian leadership that there will be no change to U.S. policy on the issue of Jerusalem, and that East Jerusalem does not constitute part of the State of Israel. As such, any Israeli construction in East Jerusalem, like in the West Bank, is illegal. This promise was meant to resolve the crisis of confidence between Palestinian Authority Chairman Mahmoud Abbas and the U.S., and remove his threat to resign from political life.

Two weeks ago the U.S. administration asked Abbas and Egyptian President Hosni Mubarak to stop the reconciliation talks between Fatah and Hamas. The Americans announced that if a Palestinian unity government is set up that would include Hamas, the U.S. would have to cease it financial aid to the Palestinian Authority.

In view of the absence of an agreement with Hamas, Abbas was forced to announce elections for next January, under the assumption that by then Obama will be able to impose on Israel a complete freeze on settlement construction and announce the resumption of negotiations on a final settlement based on the borders of June 4, 1967. In private talks, Abbas did not hide his disappointment from the lack of real progress on both the reconciliation with Hamas and the freeze on settlement construction.

A diplomatic source told Haaretz that the decision to clarify the U.S. position on East Jerusalem was made as a result of the dissatisfaction Arab leaders expressed following statements by Secretary of State Hillary Clinton that a freeze on settlement construction is not a precondition for the resumption of the negotiations on a final settlement.

The American position is meant to bridge the stance of Prime Minister Benjamin Netanyahu, who is strongly opposed to publicly committing to such a freeze in East Jerusalem, and the determined position of the Palestinian and Arab leadership that a freeze would also apply to East Jerusalem. The U.S. has not recognized the annexation of East Jerusalem, and U.S. ambassadors avoid visiting ministries in the neighborhood of Sheikh Jarra. Obama has been the third president to use his powers to reject the law passed in Congress, demanding that the U.S. recognize it as the united capital of Israel.

The law, passed 14 years ago, initiated by Republican congressional leaders with the encouragement of the pro-Israeli lobby in Washington and the leadership of Likud, who at the time were in opposition to the government of Yitzhak Rabin, also called on the transfer of the U.S. embassy to Jerusalem no later than May 1999.

The American plan will include inviting Abbas and Netanyahu to the White House, where the resumption of negotiations will be announced. This remains conditional on Abbas lifting his opposition. Subsequently an international conference will be held in Moscow, similar to the Madrid Conference of 1991, with the participation of Arab leaders, the UN, the EU and Russia. At the conference it will be declared that the negotiations aim to bring Israel's occupation to an end and the establishment of a Palestinian state within 18 to 24 months.