How is the latest Israel-U.S. row different from any other?

The debate between the US and Israel over Jewish settlements in the West Bank and East Jerusalem has a long and distinguished pedigree. Over time, it has been managed so that bi-lateral relations almost never reached a boiling point. While there were skirmishes during the Clinton administration - especially when Mr. Netanyahu was Prime Minister, and some tough language from Sec. Rice during the second Bush term, relations were never threatened as they are today. 

The last time it erupted with such vehemence was in 1991, following the first Gulf War and in the run-up to the Madrid peace conference. There are striking differences between then and now, but much is the same. For one thing, that year and a half of mounting tension took place against the backdrop of an American victory in the first Gulf War; this time around Israel faces potential double trouble. America is not on a roll in the Middle East while Israel must contend with an additional major disagreement with Washington: whether or not to exercise a military option against Iran's nuclear weapons program.

Like the Obama administration, the Bush 41 administration's new tilt shouldn't have come as a surprise.  Four months after taking office, on May 22, 1989, Sec. Baker delivered a powerful address to the Aipac annual convention in which he said called on the Arabs to make steps (like ending the boycott) and on the Palestinians to renounce violence and the policy of "phases," but most famously said that Israel should "lay aside, once and for all, the unrealistic vision of a Greater Israel...Foreswear annexation; [and] stop settlement activity..."

To the ears of Israel's supporters, Mr. Baker's words were like the premier of Stravinsky's Rites of Spring. It wasn't music to their ears.

The Bush 41 administration saw an opportunity in the defeat of Iraq and the marginalization of the PLO within the Arab world (the PLO had foolishly backed Saddam).  The Cold War was coming to a peaceful end, with America the world's single "hyper-power."

Alongside the decline of Soviet power was a relaxation of Soviet emigration policy: Jews were pouring out of the USSR and arriving in Israel.  Israel wanted to link the Cold Warish/humanitarian sympathy for Soviet Jewish émigrés to a new round of loan guarantees which would allow Israel to raise money in the capital markets at a lower rate.  The Bush administration saw the Soviet Jewish flood as a way to pressure Israel to make a gesture with respect to the settlements, ultimately linking the loan guarantee and settlement issues.

Israel responded by growing more aggressive in its settlement policy. Preceding two visits by Sec. Baker to the region promoting what would become the Madrid peace conference, settlements were established - in your face, Mr. Secretary. These became known as "Baker settlements."

"I know how to stop the settlements," one of Baker's aides, Aaron David Miller told me at the time. "Stop sending Baker to the region."

In 1990, Israel requested and received a commitment for a $400-million loan guarantee. The Bush administration would not release the guarantees until it received assurances that the money would not be used to for settlement construction. Israel submitted a letter signed by its foreign minister, David Levy, making explicit promises to this effect, but this did not appear to alter Israel's policies.

That's when Sec. Baker told the visiting Egyptian foreign minister that he had been "diddled" by David Levy to which the minister replied, "Diddled? What is diddled?"

By the summer, the $400 million in guarantees had been released, but Israel was ginning up to submit a request for $10 billion more. (In those days, children, that was a lot of money).

After Israel sent the State Department a formal request American Jewish organizations sponsored a one day fly-in to Washington to convince members of Congress to back it. But Bush wanted a four month hiatus so that any loan guarantees would be dealt with after the opening of the Madrid conference.  The White House was neither entertained nor intimidated by the display of Jewish lobbying prowess. Going over the Congress in what amounted to an appeal to the American people, President Bush argued for the delay and said in a news conference characterizing the Jewish citizens on Capitol Hill as "powerful political forces" and himself as "one lonely little guy down here." Bush won the confrontation.

The president's words culminated a year filled with testy exchanges, including Baker's barring Housing Secretary Jack Kemp from receiving Israeli Housing Minister Ariel Sharon at HUD; a string of accusations back and forth between State and Israeli Ambassador Zalman Shoval over who was responsible for the misunderstandings that delayed the $400 million request; and Baker's comment to a congressional subcommittee that "I don't think there is any bigger obstacle to peace than the settlement activity. This period also produced the infamous "F--- the Jews" quote, attributed to Baker.

Ultimately Israel received the second round of guarantees while the Bush/Baker policy of confrontation opened a front for Bill Clinton who campaigned for a more pro-Israel policy. Perhaps, in lieu of loan guarantees, the US will link settlements to Iran, restricting Israel with one hand while freeing restraints with the other.

Given all the tumult, some stress is hardly surprising. the two states' interests were more closely aligned during times of global strife when Israel was seen as "the only democracy in the region" and "our only ally in the region." President Obama's search for détente with Muslim states and his public posturing on settlements signal a shift in the "war on terrorism," into which Israel fit rather snugly. America is now in a moment after the moment after 9/11: Israel fits, but not so comfortably.

As Pete Clemenza says to Michael Corleone in the first Godfather film apropos a coming war with the other Mafia families, "These things gotta happen every five years or so, ten years. Helps to get rid of the bad blood. Been ten years since the last one."

Actually, closer to twenty but who's counting?

A shorter version of this article was published on Haaretz on August 5, 2009.