An extraordinary test of wills between the United States and Israel has left the Obama administration a stronger negotiator both with its closest ally in the Middle East and with the Arab nations needed to broker peace with the Palestinians.

The US appears likely to pull Israel and the Palestinians back toward preliminary peace talks after more than a week of harsh words about Israeli housing policies that Arabs and many Americans see as land grabs.

The way ahead probably will become clearer in coming days as Secretary of State Hillary Rodham Clinton meets with Israeli Prime Minister Benjamin Netanyahu in Washington as early as today and US Mideast envoy George Mitchell resumes his shuttle diplomacy Sunday.

Netanyahu's meetings with US officials will test the limits of US influence over its closest ally in the Middle East and the right-wing Israeli leader's latitude with even more hawkish elements of his fractious governing coalition.

The US-Israeli dustup began when Israel announced plans to build 1,600 new apartments for Jews in contested east Jerusalem, which the Palestinians want to serve as their capital. The announcement was made during a visit to Israel by Vice President Joe Biden, deeply embarrassing the Obama administration just as it believed indirect talks between Israel and the Palestinians were about to begin.

Palestinians want Israel to halt all construction of settlements in the West Bank and east Jerusalem.

Clinton condemned the Israelis for their action, even questioning the Jewish state's commitment to its security relationship with Washington. On Saturday, UN chief Ban Ki-moon said during a visit to the West Bank that Israeli settlement building anywhere on occupied land is illegal and must be stopped, as he got a closer look at some of the Israeli enclaves scattered across Palestinian-claimed territories.

But the US is giving Netanyahu political breathing space while saddling him with a political debt that Washington hopes will lead him to engage more forthrightly in peace talks with the Palestinians.

From the Arab point of view, the administration's willingness to tussle with Netanyahu over a key issue in the peace process can be seen as evidence of US evenhandedness.

There is little prospect of reaching an early settlement of the long-running conflict, but talks under almost any conditions are a diplomatic coup for President Barack Obama, who pledged as a candidate that he would make peace a priority and not wait for perfect conditions that might never come.

Mitchell cancelled plans to go to the region last week because of the breach. Once Netanyahu addressed US demands that Israel make up for the housing announcement, Clinton dispatched Mitchell to make preparations for the planned talks in which he will be the intermediary.

The Israeli leader called Clinton on Thursday, and although details have not been made public, Clinton indicated on Friday that it was good enough — she called it "useful and productive" — to send Mitchell back to the region. – Associated Press