President Barack Obama’s relations with the Israeli government have hit a new low, but the tensions on display this week between him and Prime Minister Benjamin Netanyahu may be reviving another presidential project: Obama’s quest to improve America’s image in the Arab and Muslim world.

Obama raised high expectations among Arab leaders and citizens with his promise of dramatic change from the days of George W. Bush and high-profile gestures in the first days of his administration, but the administration’s awkward retreat last year from an initial demand of a total Israeli freeze on settlements dissipated much of that goodwill.

Now, Obama’s return to the question of Israel’s continuing construction in East Jerusalem has signaled an acceptance of some Arab criticism of Israel. At the same time, Obama’s willingness to cross swords with the Israelis comes at a domestic political cost: The pro-Israel group AIPAC released a letter Friday with the signatures of three-quarters of the members of the House, pressing the administration to retreat from public confrontation.

The question facing Obama is whether he will be able to turn a perception of increased “evenhandedness” into an Arab engagement in the peace process that the administration sought, but did not get, last year.

“The administration has used [the Jerusalem conflict] as an opportunity to bring back the settlement issue and to show that they’re willing to talk tough on settlements,” said Stephen Gordon, a Mideast scholar at the Brookings Institution. “I think that has sent the signal that, yes, we are committed to the peace process; yes, we are going to be evenhanded; and, yes, we recognize that this conflict is important to people in the Arab world.”

Obama’s new focus, and the intense pressure his administration has placed on Netanyahu, have stirred deep concern among Israel’s allies on Capitol Hill, they say, because it represents an acceptance of the Arab narrative that Israeli intransigence lies at the heart of the Middle East conflict. And some observers see it in the context of a subtle, but major, shift in American strategy toward resolving it.

Read the full article, here.

UPDATE: See, Baker Schools Huckabee on Israeli Settlements, Daily Kos, March 28, 2010, by Dennis Morrison.

Watch, The Listening Post – Strained US-Israel relations – Pt 1, YouTube, AlJazeera English, March 27, 2010: 13:09.

Watch, Palestinian leader insists on settlement halt for Israel talks, YouTube, Agence France Presse, March 27, 2010: 0:31.

Watch, Israel : There Will Be No Building Restrictions in East Jerusalem, YouTube, Superlorgreen, March 22, 2010: 1:55.

Watch, Key leaders to skip Arab summit, YouTube, AlJazeeraEnglish, March 25, 2010: 2:26.

Watch, AlJazerra English News Update with News on Arab Summit, YouTube, AlJazerraEnglish, March 27, 2010: 2:28.

Israeli tanks roll into Gaza

Israeli tanks and bulldozers rolled into Gaza Friday while navy ships began firing along the Gaza coast.

Tension has been high all week following the deaths of four Palestinian youths. The youths were accused by the Israeli army of throwing stones at them.

The tension reached breaking point on Friday afternoon when militants clashed with Israeli army soldiers resulting in a gun battle which left two Israeli soldiers and two militants dead. Two other Israeli soldiers were wounded, one seriously. The Israeli army confirmed it had entered Gaza and clashed with militants. One of its soldiers killed was the deputy commander of his regiment. The other was in the reserves.

Britain expels Israeli diplomat
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