The Obama administration has softened its hard-line stance that Israel immediately stop all settlement construction—including in East Jerusalem—as a precondition for resuming peace talks with the Palestinians.

Earlier this week, Israeli Prime Minister Benjamin Netanyahu, who concluded his four-day swing through Europe last night, pointed out that it is wrong to even consider Jerusalem a settlement. “It is the sovereign capital of the State of Israel,” Netanyahu told British Prime Minister Gordon Brown on Tuesday. “We have been building in Jerusalem for 3,000 years.”

Netanyahu’s defiant stance against Washington has reaped huge dividends for his administration in Israel. A Jerusalem Postpoll taken this week found that only 4 percent of Israelis view President Barack Obama’s policies as pro-Israel. Other polls taken in recent weeks have indicated that 60 percent of Israelis do not trust President Obama. At the same time, two thirds of the Israeli public support Netanyahu on construction in Jerusalem and are opposed to a settlement freeze that would prevent “natural growth” expansion.

On Wednesday, during his four-hour meeting with U.S. envoy to the Middle East George Mitchell, Netanyahu and Israel were rewarded for holding their ground. According to Haaretz, Western diplomats and Israeli officials have both confirmed that Mitchell dropped the U.S. demand for freezing construction in East Jerusalem. Yesterday, Agence France-Presse added that the U.S. indicated a settlement freeze was no longer a prerequisite for resuming the long-stalled peace talks.

Palestinians, meanwhile, angrily reacted to what they see as a significant American concession. “This will be a fake peace process,” a Cairo University political science professor told the Christian Science Monitor. According to the csm, a senior Palestinian negotiator called the new proposal for peace talks “unacceptable.”

While it looks like Palestinian Authority President Mahmoud Abbas might agree to meet with Netanyahu next month in New York when the United Nations General Assembly meets, he maintains that for peace talks to resume, there must be a total freeze of construction in Jewish settlements. “The settlement expansion is aimed at destroying the geographical unity of the West Bank and preventing the creation of a connected Palestinian state,” Abbas said on Wednesday.

Yet, as the Washington Post correctly noted last week, the Palestinians were actively engaged in two-state negotiations right up until the end of late last year, despite ongoing settlement construction. In fact, then-Prime Minister Ehud Olmert offered the Palestinians 93 percent of the West Bank, a one-for-one land swap for the larger Jewish settlements, and a passageway connecting the Strip to the West Bank—all in hopes of establishing a Palestinian state.

Palestinian officials scoffed at the offer, one of them calling it a “waste of time.” Then, after America’s new president rejected the legitimacy of all Israeli settlement construction and demanded an immediate freeze, Palestinian negotiators took that as their cue to withdraw from negotiations altogether over what suddenly became the impassable obstacle to peace in the Middle East: settlement construction.

But with his approval ratings now plummeting in the United States, and bottoming out in Israel, President Obama has reversed course in hopes of jump-starting negotiations between Israel and the Palestinians.

This, however, makes the prospect of a violent clash over Jerusalem more, not less, likely.

The fact is, the pressure the Obama administration has put on Israel over recent months has done nothing to induce Israel’s “peace partner,” the Palestinian Authority, to compromise to make peace with Israel. “Far from encouraging Arab moderation,” writes Jerusalem Post columnist Isi Leibler, “Obama’s tough approach to Israel simply bolstered the hardliners.”

That was made clear at Fatah’s congress earlier this month, where Abbas’s party displayed contempt for any initiatives that would advance the peace process. Even before the delegates assembled, Fatah reaffirmed its ongoing refusal to accept Israel’s right to exist. In its renewed charter, Fatah maintained its “right to resistance to occupation”—i.e. another intifada—if the Jews didn’t accede to all its demands. It overhauled its leadership, bringing in a raft of hardliners, including notorious terrorist Marwan Barghouti, head of Fatah’s Tanzim terrorist group and founder of the al-Aqsa Martyrs Brigades, currently sitting in an Israeli jail serving five life sentences.

Abu Maher Ghneim, a close associate of former Fatah leader Yasser Arafat and one of the terrorist founders of the Fatah movement, won the most votes in the Central Committee election and is apparently slated to become the next leader of Fatah. Ghneim rejects the 1993 Oslo agreement and any negotiations with Israel.

At the congress, Fatah also endorsed the al-Aqsa Martyrs Brigades terrorist organization as its official security force. In another confrontational move, the Fatah General Assembly even accused Israel of assassinating Arafat, with the unanimous and enthusiastic support of all delegates.

“On every issue where it had to choose between a peace-oriented flexibility and intransigence, the Fatah leadership chose the latter,” wrote Prof. Barry Rubin.

The Obama administration’s efforts have only further radicalized the Palestinian Authority.

Now that Washington is backing off on its demands to Israel, however, Netanyahu is likely to stand his ground more than ever. And especially over Jerusalem, for which he has his people’s support. “Jerusalem is the sovereign capital of Israel,” he said this week. “We accept no limitations on our sovereignty.” While Netanyahu has now gone so far as to endorse the idea of a limited Palestinian state, his stance on Jerusalem has not faltered.

Israel’s concessions in other areas will not satisfy the Palestinians, however—they will only make them hungrier for Jerusalem. Fatah’s congress this month approved a resolution specifying Jerusalem as a “red line” that no one can cross. In claiming Jerusalem as an “integral part of the Palestinian homeland,” Fatah pledged to make sacrifices “until Jerusalem returns to the Palestinians void of settlers and settlements.”

Both sides want Jerusalem, and they want all of it. There is simply no peaceful way these two fundamental demands can be reconciled. That means a clash over Jerusalem is inevitable. Negotiations will only delay that clash so long.

So when we hear—yet again—talk of the prospect of peace in the Middle East, we can know it will be but a fulfillment of the prophecy in 1 Thessalonians 5:3: “For when they shall say, Peace and safety; then sudden destruction cometh upon them ….”