President Obama's statements that "Israel doesn't know what its own best interests are" come as news but hardly as a surprise. The relationship between President Obama and Prime Minister Netanyahu is notoriously dysfunctional, as Jeffrey Goldberg reports in the article, and this latest development is not likely to smooth over the bad experiences of the past.
Whether or not the President's comments were intended as interference in the Israeli elections, they are being perceived as such in Israel. While the story is not front-page news, some Israelis see the comments as an attempt to swing voters away from the Prime Minister's Likud party. Given the low coverage the comments are being given and the proximity to elections, it is unlikely they will actually swing the election. Such sentiments from the President are also not particularly surprising, least of all to Likud voters. However, the comments are likely to draw annoyance from center to right-wing Israelis over "American meddling" in Israel's democratic process.
On the policy side of things however, the President's comments could signal a real change in the political cost to Israel of building settlements. As Peter Beinart explained in a recent Daily Beast piece, the Obama administration has been gradually disengaging from an active defense of Israel, especially at the U.N. The President's comments may signal to the Netanyahu administration that if it intends to keep building settlements, Israel proceeds at its own risk. The United States may no longer be willing to serve as Israel's diplomatic shield on the settlement issue at the U.N. and its alignment with the rest of the international community is a significant loss for the Netanyahu administration. Unless Netanyahu can find another issue on which to appease his right wing base, the cost of holding together a Likud-Beiteinu coalition may very well be even further diplomatic isolation and questions about whether Israel is committed to actual change on the ground.
In navigating this tricky political landscape, both leaders should proceed with caution. President Obama should keep in mind that Israel's "interest" is the matter of considerable debate among U.S. Jews and Israelis alike. Prime Minister Netanyahu and his supporters should keep in mind the key difference between dependence and interdependence as they craft an Israeli foreign policy for the years ahead.