Numerous media groups - from the UK-based Guardian to the Washington Post - talk of US-Israeli relations being at an all time low since 1975; however, such claims seem wildly exaggerated. If the US was "genuinely" angry, why not take proactive steps to stop the construction of the recently announced and highly disputed 1600 homes in East Jerusalem?
When a similar argument arose in 1991 over illegal settlements, President George Bush Senior withheld housing loan guarantees against Israel. However, in 2010 there is little evidence that the US will take similar action. The closest thing to action from the Obama administration is the demand that Israelis "impose a total freeze on settlements." However, as we have seen since 1967, the Israeli government is quite apt at ignoring such calls.
So what can the US do in the face of a defiant Israel? The answer is very little. The US failure to take a more proactive stance grows from fears that such action would alienate the strong Jewish lobby in Congress and the US, especially in an election year. More importantly, US inaction stems from a desire not to damage their strategic geo-political interests in Israel.
However, the more important question is: are the US even facing a defiant Israel, or merely going through the motions of a pre-arranged disciplinary? Israel builds another illegal settlement, the US pretend to be angry and the whole world experiences déjà vu.