By Patrick J. Buchanan

March 26, 2010 -- "The Jewish people were building Jerusalem 3,000 years ago, and the Jewish people are building Jerusalem today. Jerusalem is not a settlement. It is our capital."

With this defiant declaration, to a thunderous ovation at AIPAC, Benjamin Netanyahu informed the United States that East Jerusalem, taken from Jordan in the Six Day War, is not occupied land. It is Israeli land and Israel's forever, and no Palestinian state will share Jerusalem. Israel alone decides what is built, and where, in the Holy City.

With his declaration and refusal to walk back the decision to build 1,600 new housing units in East Jerusalem, which blew up the Biden mission, "Bibi" goes home a winner over Barack Obama.

But it is a temporary triumph and hollow victory — over Israel's indispensable ally. For the clash revealed that the perceived vital interests of Israel now collide with vital U.S. interest in the Middle East.

We have clarity. There is now visible daylight between U.S. and Israeli policy for all the world to see. And America cannot back down without eviscerating her credibility in the Arab and Muslim world

What are the major points of contention?

To Netanyahu, withdrawal from Gaza was a strategic blunder that led to a Hamas takeover and rockets on Israel. That blunder will not be repeated with the West Bank. Israel had a hellish time forcing 8,000 Jews to leave Gaza and will not force 250,000 Jews to leave ancestral lands on the West Bank to create a Palestinian state where the possibility will always exist that Hamas will win at the ballot box and become the government. As for Jerusalem, its city limits are now Israel's permanent borders. Annexation is irreversible.

The American position?

The West Bank, including East Jerusalem, is occupied territory. Building there violates international law. Peace requires a sharing of Jerusalem, return of almost all of the West Bank and withdrawal of the Jewish settlers. And any land annexed by Israel must be compensated for with Israeli land ceded to the Palestinians.

That the U.S. position is not anti-Israel is attested to by the fact that Prime Ministers Ehud Barack and Ehud Olmert came close to a peace with the Palestinians based on these principles.

Netanyahu, however, does not accept them. For he won office denouncing them, and in his ruling coalition are parties that not only opposed withdrawal from Gaza, they oppose a Palestinian state.

Given the irreconcilable positions, the deadlock, why will Israel not prevail as she always prevails in such collisions? Why would Bibi's "No" to Obama's demand for a halt to the building of settlements and a cancellation of the 1,600 housing units in Jerusalem not be the final and irrevocable answer that Obama must grudgingly accept?

Answer: There is a new party to the quarrel: the U.S. military, in the person of Gen. David Petraeus.

According to Foreign Policy magazine, in January, a delegation of senior officers from Petraeus' command were sent to brief Chairman of the Joint Chiefs of Staff Adm. Michael Mullen.

"The briefers reported that there was a growing perception among Arab leaders that the U.S. was incapable of standing up to Israel, that CentCom's mostly Arab constituency was losing faith in American promises, that Israel's intransigence on the Arab-Palestinian conflict was jeopardizing U.S. standing in the region, and that (George) Mitchell himself was ... 'too old, too slow and too late.'"

Mullen took this stark message — that America was seen as too weak to stand up to Israel, and the U.S. military posture was eroding in the Arab world as a result — straight to the White House. Hence, when Joe Biden was sandbagged in Israel, he apparently tore into Bibi in private.

"This is starting to get dangerous for us," Biden reportedly told Netanyahu. "What you're doing here undermines the security of our troops who are fighting in Iraq, Afghanistan and Pakistan."

Yedioth Ahronoth further reported: "The vice president told his Israeli hosts that since many people in the Muslim world perceived a connection between Israel's actions and U.S. policy, any decision about construction that undermines Palestinian rights in East Jerusalem could have an impact on the personal safety of American troops."

Biden was saying Israeli intransigence could cost American lives.

Each new report of settlement expansion, each new seizure of Palestinian property, each new West Bank clash between Palestinians and Israeli troops inflames the Arab street, humiliates our Arab allies, exposes America as a weakling that cannot stand up to Israel, and imperils our troops and their mission in Afghanistan and Iraq.

As this message has now been delivered by Gen. Petraeus to his commander in chief, Obama simply cannot back down again. If he does not stand up now for U.S. interests, which are being imperiled by Israeli actions, he will lose the backing of his soldiers.

U.S.-Israeli relations are approaching a "Whose side are you on?" moment. Either Bibi backs down this time — or Obama loses his soldiers.