Netanyahu strikes a deal on Israeli settlements – could it freeze peace, too?

Israeli Prime Minister Benjamin Netanyahu, long caught between intensifying US demands and the restlessness of his right-wing allies, appears to have struck a deal to delay Israeli settlement expansion without unsettling his government.

But far less certain is whether the delay will accomplish its stated purpose: luring the Palestinians back to peace talks.

Mr. Netanyahu's security cabinet is expected to narrowly approve a three-month Israeli settlement freeze in the West Bank, in exchange for US promises of $3 billion in military aid and a commitment not to support any United Nations resolution recognizing Palestinian sovereignty.

Despite threats from Jewish settlers and their backers in the government of an open break with Netanyahu, the prime minister's ruling coalition does not appear to be in danger.

"It is valid that he can pass [the freeze], and without his coalition being destabilized, and if his coalition is destabilized he has other options,'' says Chemi Shalev, a political commentator at the daily Yisrael Hayom. "In the short term he is in a strong position politically.''

'Netanyahu is going to have his way'

The US-Israeli package deal on the peace process was at the center of Netanyahu's seven-hour meeting last week with Secretary of State Hillary Clinton, and then at Israel's weekly cabinet meeting on Sunday.

President Obama congratulated Netanyahu on his willingness to support a freeze, even though Israel said Sunday that the agreement isn't finalized. Netanyahu's decision to go public with the talks, however, suggests that he is on board.

Though Foreign Minister Avigdor Lieberman is expected to vote against the package deal with the US, he isn't expected to pull his ultranationalist Yisrael Beitenu party – the largest coalition partner -- out of the government over the matter.

Ministers from the religious party Shas, Netanyahu's second-largest coalition partner, are expected to abstain from voting, depriving opponents of a majority to block the move.

"Because nothing final is at stake, I am not sure that they are going to rush into new elections,'' says Avraham Diskin, a professor of political science at Hebrew University. "He is going to have his way for the time being.''

Decision on borders could cause 'political earthquake'

Though the details of the US-Israeli agreement haven't been made public, US officials hope a temporary freeze will convince Palestinian negotiators of Israel's good intentions and lead to substantive progress towards peace.

An agreement on the borders of an independent Palestine isn't likely within three months, and the concession the Palestinians really want -- an end to Israeli settlements on land they consider their own -- could doom Netanyahu's coalition.

 Any evacuation of settlements as a result of final border decisions would likely force a "political earthquake'' in which Netanyahu would lose the backing of religious ideologues and security hawks, says Mr. Shalev.

Uzi Dayan, a Likud member and former deputy chief of staff of the army, says a preliminary agreement on territorial concessions risks conceding Israel's territorial "strategic depth'' before reaching a full agreement.

"It's like having a negotiation, and saying, 'First, give all your money, and then let's talk about the other issue,' '' he says.

Settlers warn a freeze could lead to withdrawal

In the case of a border deal, Netanayhu would have to choose between a rescue from the pro-negotiation Kadima party or a new election. Settler leaders are already lobbying cabinet members to oppose the deal, warning that a new freeze will lead to eventual Israeli withdrawals.

"Obama is applying a full-court press on Netanyahu to push him down a slippery slope of concessions,'' says Naftali Bennett, the director general of the Yesha Council, an umbrella of settler leaders. "Regional leaders in Iran and Lebanon are watching Netanyahu's resolve, and if he caves in here, he loses his credibility and nobody will take him seriously,'' he says.