From RubinReports, Sunday, July 12, 2009, by Barry Rubin:
...The Obama administration had an idea of making the main--or at least initial--specific tactic of its Middle East policy to get a freeze of apartment-building on Israeli settlements on the West Bank. What happened should have been predictable. Israel is in no hurry to comply, giving the administration a choice between looking foolish and being a bully in a game that isn't worth the candle.
But there's a more immediate problem. Syria and the Palestinian Authority, which not long before had been--in part to show Obama that they were most cooperative and eager for peace, no matter how hypocritical that was--are now demanding a freeze on construction as a precondition for any further talks.
In other words, the minimal chance for negotiations has been frozen due to the U.S. strategy. The ship is dead in the water.
The administration has--unintentionally, of course--even further slowed any actual manifestation of a peace process. Even to get anyone to sit down and talk at all during the rest of this year is now in question.