A plugged-in friend emails:
I think the Obama administration’s blow-up wasn’t about the “insult” at all. That was just a convenient excuse. The issue is that Obama has zero to show for his first year in office in the foreign policy realm. His one arguable success is the proximity talks between Israel and the Palestinian Authority (even if I’d call it a self-inflicted failure created by his outrageous public scolding of Israel in May 2009 on a total settlement freeze that limited PA chief Mahmoud Abbas’ ability to maneuver). The Palestinians are constantly — and tactically — looking for any excuse to walk away from negotiations to cause Israel to better its offer. When the housing announcement was made during the Biden visit last week, the Arab League jumped all over the State Department and the Obama people saw the entire Mitchell “proximity talks” project as being at risk. The wild overreaction was a deliberate effort to shock the Israelis to make more concessions, of course, but more so to impress upon the Arab League that it should not withdraw its support for the proximity talks. A tactically foolish approach, as it will hurt, not help, forward movement on the talks — which will go nowhere soon anyway. But not just a fit of pique.