The news this week that the Israeli government has approved a further 900 new buildings in an East Jeru­salem settlement deals another hammer blow to the already waning peace process. Not only does the expansion of the Gilo settlement show a complete disregard for international law, it shows once again a preference for expansion over peace on the part of the Israel.

In a speech to the Jewish Federation of North America a couple of weeks ago, Benjamin Netanyahu spoke of the achievements of the Jewish people.

Throughout his speech Netanyahu made reference to the small size of Israel in comparison to its Arab neighbors. He spoke of how Israel had fended off the assaults of much larger adversaries, and of the achievements of the Jewish people who were but a “small people on the foothills of Asia” in ancient times.

While his words may have stirred the passions of his audience, accuracy in these repeated references to Israel’s size is noticeably lacking. Israel is not the small endangered country that its leaders like to portray it as: it is an advanced military superpower with enormous wealth, and its policies are a very real threat to the Palestinian state, as well as its people.

It should be apparent to most now, if it were not before, that words alone are not enough to make Israel halt settlement growth. The Obama administration came into power promising to do all it could to start peace talks again, yet is has so far been unwilling to do anything other than express mild discontent in response to repeated Israeli violations of international law.

It is not as if the United States and the EU are unable to influence the Israeli government. The US especially has enormous influence to exert by simply withholding part of the massive economic support it gives each year to Israel, without conditions. During the Suez Crisis President Eisenhower withheld financial assistance for Israel, eventually leading to Israeli withdrawal. Even the neocon Bush administration threatened to withhold loan guarantees when Ariel Sharon ignored calls to cease building the separation barrier.

The Arab world watches with incredulity as Netanyahu continually ignores Obama’s calls for a settlement freeze with impunity and simultaneously blames Palestinians for not agreeing to talks.

Israel’s dogged refusal to freeze settlements has major implications in the region, for itself and for the United States. Attempts by the US to foster ties with Iran and build better relations with countries throughout the Middle East are set back every time more settlements are approved.

When Netanyahu invokes memories of the Jewish people as an endangered group fighting for survival, he misses the irony of the current situation. It is the Palestinians – more so than modern Israel – who bear resemblance to that image.