By Eli Lake and Ben BirnbaumPresident Obama has abandoned a two-year policy of trying to persuade Israel to stop some settlement construction as a condition for negotiations with the Palestinians, a major recalibration of the administration’s strategy for brokering a deal for a Palestinian state.

U.S. officials began telling reporters about the shift in strategy Tuesday after remarks from Israeli Defense Minister Ehud Barak revealing that the Obama administration had stopped asking Israel to commit to a three-month settlement construction freeze, citing in part distractions caused by the WikiLeaks crisis.

The strategy shift comes after nearly a month of hard-fought negotiations between Israel and the United States over the settlement moratorium. Palestinians have long complained that the construction is a pre-emptive move by Israel to redraw the boundaries of their prospective state even before talks have begun.

Israel had agreed to a 10-month freeze at the end of 2009 that expired in September, with the idea that the ban on new buildings in the West Bank — but not in Jerusalem — would entice Palestinian Authority President Mahmoud Abbas back to negotiations he broke off during Israels war in Gaza that started at the end of 2008.

Mr. Abbas did return to the bargaining table briefly, but efforts to establish a new process broke down soon afterward.

Palestinian officials were still absorbing the news on Tuesday.

“Until we see the details of this statement or this new position, our position is that the Israelis have an obligation to refrain from undertaking any settlement activity,” said Maen Rashid Areikat, the Palestine Liberation Organization‘s representative in Washington. “This remains our position. Evidently, this is the United States‘ position, and we still are waiting to get more details until we can comment further on that.”

A senior Israeli official said the decision to end the settlement freeze was based on a calculation that the Palestinians had expected too much from the Israelis just as a condition of their participation in peace talks.

“First of all, the mutual understanding with the Americans was that we could go on forever with this package, it would still not get the Palestinians back to the negotiations table,” a senior Israeli official told The Washington Times. “They wanted Jerusalem, they wanted more than three months, they wanted a freeze until negotiations are concluded.”

A U.S. official familiar with the diplomacy told The Times: “After consultations with the parties, we determined a moratorium extension will not provide the best basis for resuming direct negotiations. In the coming days and weeks, we will engage with both sides on the core substantive issues at stake as well as with Arab states and other international partners to work for our shared goal of a framework agreement” on all the major issues dividing the two sides.

The so-called “permanent status” issues still to be determined include the status of Jerusalem, a city Israel and Palestinians consider their capital; the status of Arab refugees displaced by Israel‘s 1948 war for independence; and the final borders of a Palestinian state.

Mr. Abbas in recent days has threatened to dissolve his government — a limited form of self-rule first set up in the mid-1990s — if an agreement for a fully independent state is not met. Palestinian officials have threatened to declare statehood unilaterally in the West Bank if the talks collapse.

Mr. Abbas also has asked other countries to recognize a Palestinian state in its pre-1967 borders, something Argentina and Brazil announced in the past week.

Mr. Areikat said Mr. Abbas‘ threat “may not take the form of physically or literally dissolving the Palestinian Authority.”

“But if this whole process fails and you cannot reach an end to the occupation and you cannot establish a Palestinian state and you cannot give the Palestinians their freedom, the Palestinians are entitled to contemplate other options,” he added.

The diplomat said Palestinians have discussed their views openly with the Obama administration and other countries around the world.

“Of course, the ideal situation for us would be to do it in coordination with the United States and with the international community,” he said.

The Obama administration‘s shift in some ways caps a particularly rocky period of U.S.-Israeli relations. Prime Minister Benjamin Netanyahu, according to three Israeli officials familiar with the situation, asked for written commitments from Mr. Obama that Washington would protect Israel diplomatically inside the United Nations and other international forums from anti-Israel resolutions.

Before Mr. Obama‘s election, U.S. diplomatic protection for Israel had long been a standard assumption of the bilateral relationship, as opposed to an inducement for Israel to freeze settlement construction.

“The inducements, they are still there,” the senior Israeli official said. “We are not asked to make any freeze, but it does not mean that the United States is not adhering to its commitment to prevent and object to unilateral motions in the international fora.”

The U.S. official declined to comment on the issue.

Elliott Abrams, a senior director for Near East and North African affairs for President George W. Bushs National Security Council, said, “We are not seeing a new approach. We are seeing the end of the old approach.”

He added, “One has to remember the Arabs had not ever insisted on such a precondition. This was something that was added by the administration and it proved to be disastrous.”

One of the first things the Obama administration did with regard to the peace process was to inform the Israelis that understandings forged under Mr. Bush that limited settlement expansion were no longer U.S. policy.

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