It is a testament to the hubris of Benjamin Netanyhau's government that having seen off an attempt by Barack Obama to freeze settlement construction, it has now given the US President a second chance to claw back that defeat. Much has been said about the inadequacy of Mr Netanyahu's apologetic admission that last week's announcement of a plan to expand the Ramat Shlomo settlement was badly timed. As the American Secretary of State, Hillary Clinton, made admirably clear to the Israeli Prime Minister in her famous telephone call last Friday, Washington objected to the substance as much as to the timing.

Yet the timing was indeed bad. It came less than 48 hours after Mr Obama's envoy George Mitchell had finally been able to announce that indirect negotiations would go ahead – negotiations which an infuriated Palstinian leadership said it would not participate in if the plan stood. It is hard to believe that some in Israel's government did not know that this would be the consequence. Certainly Mr Netanyhau's suggestion that because the settlement is viewed by most Israelis as an integral part of Jewish Jerusalem, nobody thought to challenge it, is extraordinarily lame. No one who has been around Middle East politics as long as he has could be ignorant of how Palestinians would see the move.

One view is that President Obama is heading for another defeat and that in an election year he cannot withstand the wrath of the powerful right- wing pro-Israel lobbying group, AIPAC. If so, serious scrutiny of the way AIPAC uses its ample funding to influence American democracy, mainly in what it perceives to be the interests of a foreign government, is overdue. Fortunately the arrival of J Street, a vastly less well-funded group but one more representative of the impressive majority of American Jews who voted for Mr Obama in 2008, and which is backing him now, makes that possible without the usual charges of anti-Semitism.

But, as it happens, many American Jews will rally to the powerful argument that by restraining a Likud government prepared to jepoardise peace talks in this way, Mr Obama is actually acting as a true friend of Israel and its long-term security. And Mr Obama also has other domestic cards to play. This week's warning by General David Petraeus of the "enormous" effect of continued Israeli-Palestinian tension on the tasks confronted by US forces in Muslim countries like Afghanistan and Iraq is a salutary, if overdue, reminder that an end to the conflict is an urgent American interest as well as an Israeli and Palestinian one.

Yet Mr Obama may not be able to rely on mere rhetoric as President Bush senior did not when he briefly suspended loan guarantees to bring Israel to negotiations in 1991. Here the EU, a key trading partner of Israel, needs to lend its (albeit secondary) support. Lady Ashton did herself nothing but good yesterday by visiting Gaza. She should add her voice at the Quartet meeting in Moscow today to those urging an end to the destructive two and half year economic siege.

She was of course right to condemn yesterday's fatal Qassam rocket attack. And as she grows in authority, Baroness Ashton should ally herself with US efforts to break the wider deadlock in the Middle East. That need not bring Mr Netanyahu down (though it may). The Israeli prime minister could reach out to the centre and left to replace the fundamentalists in his coalition. But it is primarily the job of Mr Obama to help him decide whether those friends are more important to him than the alliance with the US.