Israel: Obama's Speech Won't Change Our Settlement Policy

JERUSALEM — Israel will not heed President Barack Obama's powerful appeal to halt all settlement activity on lands the Palestinians claim for a future state, officials said Friday, a position that looks sure to cause a policy clash with its most important ally.

The government plans to allow construction inside existing West Bank settlements to accommodate for growing families, said the officials.

In an address to the Muslim world in Cairo on Thursday, Obama said the United States does not recognize the legitimacy of the settlements and called on Israel to halt construction there. Obama also appealed to the Palestinians to renounce violence.

During a visit to Germany on Friday, the U.S. leader renewed his call for Israel to halt settlement activity in the West Bank, saying that he recognized the politics involved in Israel that made it difficult to accomplish this task. He also pressed his call for the creation of an independent Palestinian state, saying: "The moment is now for us to act."

Both positions are in conflict with Israel's new leader, Benjamin Netanyahu, who refuses to endorse Palestinian statehood or accept a settlement freeze.

Israel issued a carefully worded response hours after Obama's Cairo speech saying it hoped his words would help usher in a "new period of reconciliation" in the Middle East. The response left out any reference to settlements or other issues that are putting Israel at odds with Washington.

The government officials, who spoke on condition of anonymity because they were not authorized to go beyond the formal response, said that instead of halting all settlement activity, Israel planned to take down 22 unauthorized settlement outposts in the West Bank in the coming weeks.

That balancing act _ taking down outposts while pressing ahead with so-called "natural growth" construction in the settlements _ is not likely to go over well in Washington.

U.S. officials have made it clear they want all settlement activity to stop, without exception.

Most likely, Netanyahu will be forced to choose between going along with Obama's Mideast vision, and risk a crisis in his rightist governing coalition, or rejecting it, and risk alienating Israel's most important ally.

"Benjamin Netanyahu will have to come to a decision soon. It's either 'yes' to Obama or 'no' to Obama," wrote columnist Ben Caspit in the Israeli daily Maariv on Friday.

So far there is little indication Netanyahu will answer "yes."

"With all due respect to President Obama, and there is respect, and to the deep friendship between Israel and the United States, no foreign leader of another country will set policy in Judea and Samaria," lawmaker Ofir Akonis of Netanyahu's Likud Party told Army Radio. Judea and Samaria are the Hebrew terms used for the West Bank.

Obama himself is being careful to avoid an open clash with Israel. In his speech, which was designed to heal rifts between the U.S. and the Muslim world, Obama described America's ties to Israel as "unbreakable."

He also issued an impassioned plea for Palestinians to halt violence and condemned Holocaust denial.

In an interview with six reporters from Muslim regions and one from Israel following his Cairo speech, Obama said Netanyahu's credentials as a conservative could actually help the cause of peace.

The Israeli newspaper Yediot Ahronot cited Obama as saying that Netanyahu could have opportunities unavailable to a leftist leader. The Palestinian daily Al Ayyam reported that Obama compared the situation to the anti-communist Nixon opening relations with China.

For their part, Palestinian officials praised Obama's speech but urged him to back it with action.

"Words are good, but change requires deeds," said Palestinian negotiator Saeb Erekat. He said Obama should come up with a new peace plan "with timelines, monitors and mechanisms for implementation."

Despite unease in Israel over Obama's overtures to the Muslim world, enthusiasm was also evident.

In the liberal daily Haaretz, former lawmaker Yossi Sarid called Obama's speech "the most important of the decade."

Sarid imagined rushing to the phone to call Netanyahu, telling him: "This beautiful young man, Barack Hussein Obama, he's the man. He's the greatest. You don't have a chance in a face-off with him."

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Associated Press Writer Matti Friedman contributed to this report.