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The new coalition included Likud and Labor plus smaller parties. Barak became defense min-
ister. In January 2011, Barak split off from the Labor Party in order to head off internal pres-
sure to quit the coalition. He instead became head of a new centrist party called Atzmaut
(Independence).
Netanyahu, now a centrist himself, explicitly accepted the existence of a Palestinian state if
a comprehensive peace agreement could be reached that incorporated Israel's requirements.
Netanyahu, Barak, Livni, and Peres all had similar positions. But Israel had no interest in mak-
ing a two-state agreement that would leave it less safe than before. Despite all the problems
that Israel faced regionally and internationally, its current situation was far better than it had
so often been in the past.
The following month, Israel's government produced a new peace plan refl ecting the coun-
try's consensus stance on these issues. There were fi ve things that Israel would insist be incor-
porated into any peace agreement producing a two-state solution. These were recognition of
Israel as a Jewish state by the Palestinians, who would have their own Arab, Muslim state; a
clear ending of the confl ict and of all Palestinian claims on Israel; strong security arrangements
and serious international guarantees for implementing them; a non-militarized Palestinian
state; and resettlement of all Palestinian refugees in Palestine unless they wished to remain
where they were already living.
The presidency of Barack Obama posed special challenges to the Israeli coalition govern-
ment, which was concerned that the new U.S. government would be less friendly to Israel than
many of its predecessors had been. At the same time, the Obama administration expressed an
urgent desire to press forward with an Israel-Palestinian diplomatic process and a strong belief
that the issue could be resolved quickly.
This is not what actually happened. When President Obama took offi ce in January 2009,
the PA had already suspended talks because of the Israel-Hamas fi ghting in the Gaza Strip.
The new U.S. administration put the emphasis on freezing new Israeli construction in existing
West Bank settlements. In exchange, it attempted to convince Arab rulers to give something
to Israel. Contrary to U.S. expectations, Arab regimes showed themselves to be far more con-
cerned about an expansionist Iran than the Israel-Palestinian confl ict. The PA itself was not
eager for talks and vetoed an announcement by Obama in September 2009 that Israel and the
Palestinians would start intensive talks within two months.
After months of U.S. efforts, Prime Minister Netanyahu agreed on November 25, 2009, to
a ten-month construction freeze, calling the move “a painful step that will advance the peace
process.” This decision was praised by U.S. Secretary of State Hillary Clinton, who called it an
“unprecedented” concession. In the offi cial response to the Israeli government's construction
freeze, the U.S. State Department defi ned its goal as an outcome that “reconciles the Palestinian
goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli
goal of a Jewish state with secure and recognized borders that refl ect subsequent developments
and meet Israeli security requirements.” This was an important statement because it indicated
U.S. support for alterations of the pre-1967 borders in Israel's favor, the incorporation of some
settlements into Israeli territory, security guarantees acceptable to Israel, and recognition of
Israel as a Jewish state. But would the U.S. government keep to those commitments?
 
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