Despite a wave of protests and talks on the issue Israeli settlement construction continues.
George Mitchell, the US envoy to the Middle East, met Binyamin Netanyahu, the Israeli prime minister during his latest tour of the region and allthough the meeting was described as "good" by the prime minister's office, there was no deal on the thorny issue of settlements.
The US wants Israel to temporarily halt its expansion into Palestinian land, especially in the occupied West Bank.
Mitchell and Netanyahu are set to meet again and the special envoy wants to secure an agreement ahead of possible three-way talks between Netanyahu, Barack Obama, the US president and, Mahmoud Abbas, the Palestinian president.
So, where does that leave President Obama's peace initiative? And is the US willing to force its ally to compromise?
Inside Story, with presenter Shiulie Gosh, discusses with guests Raanan Gissen, the former senior advisor to Ariel Sharon, Michael Hudson, a professor of International Relations at Georgetown University and, Azzam Tamimi, the director of the Institute of Islamic Political Thought.