Dealing with U.S. President Barack Obama constitutes a major challenge for Prime Minister Benjamin Netanyahu. It has been a long time since America last had a president as powerful as Obama, who controls both houses of Congress and is wildly popular among the American public. It is from this advantageous position that Obama has decided to confront Israel, and now the Israeli prime minister has to decide how to respond.

Meanwhile, the world's troublemakers in Tehran, Damascus, and Pyongyang are getting away with murder. As for Iranian President Mahmoud Ahmadinejad and Syrian President Bashar Assad, Obama has decided to sweet-talk them. Meanwhile Kim Jong-il is still waiting to see how the U.S. president will deal with him, as North Korea continues to threaten the world with its nuclear-tipped missiles. The exception to it all is Israel - Obama is telling Jerusalem in no uncertain terms what he expects from it. No doubt about it, the American leader has decided to use strong-arm tactics on America's long-time ally.

He has carefully and deliberately targeted the Jewish settlements in Judea and Samaria as the focal point of the pressure he has decided to apply on Netanyahu. For years these settlements have been castigated by Israel's enemies, and even some of its friends, as constituting an obstacle to regional peace - a sentiment also echoed by the Israeli left. With that kind of backing, Obama must have concluded that Netanyahu will have no choice but to buckle. That is why he and Hillary Clinton are keeping up the pressure.

"The United States does not accept the legitimacy of continued Israeli settlements... It is time for these settlements to stop," he declared in Cairo. To leave no room for doubt, Clinton emphasized that Obama was referring to all settlements, including Jewish neighborhoods in East Jerusalem. Those who choose to take comfort in Obama's choice of words - he referred to "legitimacy" rather than "legality," and talked about "continued" Israeli settlements - are only fooling themselves. Obama has targeted all Jewish settlements in Judea and Samaria as well as East Jerusalem's Jewish neighborhoods, and he does not intend to let go easily.

Netanyahu made a serious error of judgment in trying to parry Obama's opening serve by explaining the need for additional settlement construction due to the "natural growth" of the Jewish population there. Referring to the space required for kindergartens, nurseries and homes for newlyweds does not convince someone who does not accept the legitimacy of continued settlement construction. Expecting heartfelt sentiments from your opponent in this game is not going to get us anywhere. Obama is playing hardball. While efforts to assuage the concerns of the Israeli public regarding relations with the U.S. - by saying that the settlement issue is negotiable - may leave an impression in Israel, they are falling on deaf ears in Washington.

The right of Jews to live in Judea and Samaria is a basic principle not subject to negotiations. There is more at stake here than mere rights to natural growth. Britain tried to abrogate these rights in the infamous MacDonald White Paper of May 1939. That document ended up in the trash bin of history. The Arab Legion tried to deny this right from 1948-1967, after destroying the Jewish settlements in the area, only to be driven out in the Six-Day War. And today, too, no coalition of friends or foes is going to succeed in this endeavor. The Israel prime minister has to make this crystal clear. The gauntlet has been dropped and it has to be taken up.

Succumbing to the pressure that is being applied on the settlement issue will only result in additional pressure on other issues, and before long Israel's position on matters of principle and substance will begin to crumble. This is not going to be easy, but Israel's staunch supporters in the U.S. will stand by it. It will be a test for the American Jewish leadership - and for the people of Israel.