In the spring of last year, the Obama administration picked a fight with the Israel over the routine approval of some housing starts in Jerusalem because it coincided with a visit to the country by Vice President Joe Biden. Washington ginned this “insult” to Biden up into a full-scale attempt to undermine Prime Minister Benjamin Netanyahu’s government. Though that effort failed, as would subsequent ambushes for Netanyahu set by the White House, the after shocks still linger as Obama’s precedent-setting attack on Jewish Jerusalem has become a major problem for the U.S.-Israel alliance.

Today, the Israeli government gave the final approval for the construction of the same apartment buildings in the Ramat Shlomo district of the city that were deemed such an affront to Biden’s honor. We can expect the routine condemnation of these homes from both the administration as well as other critics of Israel. But while the debate over the status of Jerusalem is, as Seth wrote earlier today, nothing new, it is important to note the significance of this particular controversy and to understand why it signaled an unprecedented policy shift on the city’s future by the United States.

While no American government has ever recognized Israeli sovereignty over any part of the ancient capital, it is equally true never before had an American president made an issue of the building of homes in the existing Jewish neighborhoods begun in the immediate aftermath of the reunification of the city in 1967. Though settlement building in the West Bank has been a constant source of tension, and projects such as the one at Har Homa outside these Jewish sections of the city (although it was on vacant, Jewish-owned land) were disputed by Washington, housing in places like Ramat Sharon had never been a bone of contention.

That’s because even administrations deemed less than friendly to Israel always took it as a given these neighborhoods must be treated differently from West Bank settlements. There was no chance they would ever be surrendered in a peace settlement. That stance was reinforced in 2004 when President George W. Bush sent then-Israeli Prime Minister Ariel Sharon a letter specifying any deal with the Palestinians must take into account control of Jewish neighborhoods in Jerusalem were no longer on the table.

But all that changed under Barack Obama. It was Obama’s personal condemnation of the creation of new apartments in these existing Jewish parts of the city that has made their future a matter of dispute and encouraged Palestinians to hold onto false hopes that one day the Jewish residents of these homes will be forcibly evicted. This foolish decision to raise the stakes on Jerusalem has forced the Palestinian leadership to ramp up their already unrealistic demands on the issue and therefore made peace an even more remote possibility.

While news accounts of decisions about housing starts in Jerusalem routinely refer to them as obstacles to peace, it bears repeating this assertion is absolutely false. Because everyone knows (as they have always known), neither Ramot Sharon nor any other of the existing Jewish neighborhoods in Jerusalem will ever be given up, it doesn’t matter how many homes are built there. The number of new apartments created there doesn’t matter any more than the vast number of new homes built in Arab neighborhoods in the city.

These homes are a red herring that have no bearing on the future of the peace process. It was Barack Obama who made Ramat Shlomo and the right of Jews to build and live in the rest of Jerusalem into the bitter and pointless controversy it has now become.