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Benny Gantz (L) and Tony Blinken. Photo: Jacquelyn Martin/Pool/AFP via Getty

Secretary of State Tony Blinken protested the decision to approve 3,000 new housing units in Israeli settlements in the occupied West Bank during a tense phone call on Tuesday with Israeli Defense Minister Benny Gantz, three Israeli officials tell me.

Why it matters: This is the first time new construction in the settlements has been approved since President Biden assumed office, and the Biden administration had been privately pressing the Israeli government not to proceed.

“The U.S. gave us a yellow card.”
— Senior Israeli official on the "very difficult" call between Gantz and Blinken.

The backstory: Prime Minister Naftali Bennett had hoped a Ministry of Defense committee would approve the new housing units before he visited Washington in August. But that didn't happen, and then Biden personally pressed him to show restraint on the settlements issue.

  • That complicated matters and contributed to a two-month delay. But then last week, the Ministry of Defense announced the committee would convene to approve even more housing units than had previously been planned.
  • The top U.S. diplomat in Jerusalem, Michael Ratney, called Bennett’s foreign policy adviser Shimrit Meir to protest the move, in a call the sources described as "difficult."

Behind the scenes: The U.S. pressure escalated on Tuesday when Blinken called Gantz and told him both the number of housing units and their locations deep inside the West Bank were “unacceptable," according to the Israeli officials.

  • Blinken asked Gantz to take the U.S. position on settlements more into consideration in the future.
  • Gantz told Blinken he understands the Biden administration's concerns and had decreased the number of building plans up for approval as much as he could.
  • He also pointed out that he had approved plans for 1,300 new housing units for Palestinians in the Israeli-controlled West Bank, something that hadn't happened in over a decade.

Gantz also told Blinken that he'd been criticized by his political rivals for meeting with Palestinian President Mahmoud Abbas and for granting legal status to 4,000 Palestinians living in the West Bank, adding "I am planning to take more such steps soon,” according to one Israeli official.

  • Gantz told Blinken that, the settlements dispute notwithstanding, the new Israeli government’s objective was to strengthen the Palestinian Authority and improve the lives of Palestinians in the West Bank, the Israeli officials said.
  • Palestinian Prime Minister Mohammad Shtayyeh on Sunday called on the U.S. and international community to "confront the fait accompli being systematically imposed by Israel."

Between the lines: The latest flare-up over the settlements began in the same week that Gantz signed an order to designate six Palestinian NGO’s as terrorist organizations, which also sparked criticism from the State Department.

  • An Israeli delegation is expected to hold talks with State Department officials later this week on the designations.

What's next: After the Israeli government passes its budget next week, and thus ensures its short-term political survival, the Biden administration is expected to resume discussions over reopening the U.S. consulate in Jerusalem — another very contentious issue.

The bottom line: Senior Israeli officials admit that the U.S. position on settlements was tougher than they had expected, but note that the criticism is coming mainly from the State Department, with the White House not weighing in publicly for now.

  • “We shouldn’t waste the goodwill we get from this administration," one senior Israeli official said.

Go deeper

Nov 24, 2021 - World

Scoop: Saudis tried to stop UAE-Israel-Jordan solar energy deal

The crown princes of the UAE (left) and Saudi Arabia. Photo: Saudi handout via Getty

The Saudi government pressured the United Arab Emirates to back off a major solar energy deal with Israel and Jordan, two senior Israeli officials with direct knowledge and another source briefed on the matter tell Axios.

Why it matters: The agreement signed on Monday and helped across the finish line by U.S. climate envoy John Kerry is the biggest renewable energy project in the region. It will see the UAE build a massive solar farm in Jordan to supply electricity to Israel, and Israel in turn will build a desalination plant to provide water to Jordan.

Nov 24, 2021 - World

Israeli diplomat: New regional alliances "keep the Iranians up at night"

Photo: Mazen Mahdi AFP via Getty

MANAMA, Bahrain — The diplomat who transitioned Israel's secret relationship with Bahrain into a public one tells Axios that Israel's burgeoning partnerships in the region "keep the Iranians up at night."

What he's saying: "The Iranians opened a front against us in Syria and Lebanon, but now when they look across the Gulf, they see us there with our allies very close to them," says Itay Tagner, the outgoing head of mission at the new Israeli Embassy in Bahrain, who previously led the secret Israeli diplomatic mission in Manama.

54 mins ago - World

Australia joins U.S. in diplomatic boycott of Beijing Winter Olympics

Australian Prime Minister Scott Morrison. Photo: Darrian Traynor/Getty Images

Australia is joining the U.S. in a diplomatic boycott of the 2022 Beijing Winter Olympic Games in protest of human rights abuses committed by China's government, Prime Minister Scott Morrison said Wednesday.

Driving the news: After the Biden administration's announcement that U.S. officials won't attend the Games due to the ongoing genocide of Uighurs and other Muslim minorities in the Xinjiang region of China, Morrison said at a Sydney briefing that Australia would follow suit as "it's the right thing to do."