Obama’s dilemma on Palestinian statehood

A year after calling at the UN for a Palestinian state, President Barack Obama may be about to order a U.S. veto to thwart an aspiration he has spent substantial political capital to bring about.

Palestinians, frustrated that peace talks with Israel and their path to statehood is frozen, are considering an application for recognition as a full member state at the United Nations Security Council next week.

Obama, under heavy domestic political pressure, has warned a Palestinian declaration of statehood would be a “distraction” and would not change facts on the ground, end conflict with Israel or lead to a genuine state.

The administration appears acutely aware of the consequences of a veto and has mounted a last ditch drive to head off the Palestinian move.

Secretary of State Hillary Clinton said Tuesday the initiative was aiming to forge a “sustainable platform for negotiations.” Another option would be to divert a statehood bid away from the Security Council.

If the Palestinians chose instead to seek to upgrade their status. to that of a non-member observer state in the UN General Assembly, Washington could vote against the move while avoiding a Security Council veto.

Though some European states are reportedly in favor, Washington and Israel still oppose even that compromise.

And despite Israeli warnings of a grave response and the prospect the U.S. Congress may pull hundreds of millions of dollars in aid, it may be that Palestinian president Mahmud Abbas is too invested politically to back down.

White House officials declined to discuss the possible impact of a veto on U.S. prestige.

But such a step would be embarrassing for Obama after he made the Palestinian cause and repairing the U.S. breach with Islam key goals of his presidency.

In 2009, he traveled to Cairo to address the Muslim world and declared: “America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own.”

A year ago, Obama raised the stakes, calling at the UN on Arab states and Israel and the Palestinians to draw on traditions of tolerance shared by Christianity, Islam and Judaism.

“When we come back here next year, we can have an agreement that will lead to a new member of the United Nations − an independent, sovereign state of Palestine, living in peace with Israel,” Obama said, laying a big political bet.

Such hopes foundered on Israel’s refusal to extend a settlement moratorium, resulting Palestinian fury and U.S. bad blood with Israeli Prime Minister Benjamin Netanyahu.

Marwan Muasher, a former Jordanian foreign minister, now with the Carnegie Endowment for International Peace, argued that a veto could damage U.S. credibility as it pushes for reform in a region rocked by the Arab Spring.

“I think the United States needs to understand this is a new region.”

“It can no longer say ‘if you are Libyan or Egyptian or Syrian, we’re for freedom, we are with you, but not if you are Palestinian − this is not a strong argument.”

Robert Malley, of the International Crisis Group, said the administration was divided on the issue.

One group fears a veto could radicalize Arab opinion and would be “an extremely negative development in terms of U.S. image, reputation and credibility in the Arab world,” he said.

An opposite view is “that this is expected, people know the U.S. is going to veto it and that it is not going to cause the kind of diplomatic catastrophe that others are predicting.”

Though U.S. influence in the Middle East is perceived to be waning, a decision by the Palestinians to internationalize their drive for a state would be a new blow to U.S.-sponsored peace efforts.

Another constituency is also important: Washington’s regional friends.

In an explosive New York Times editorial, Saudi Arabia’s Prince Turki al-Faisal warned that the United States could veto a state, but lose an ally, and Saudi cooperation in Iraq, Afghanistan and Yemen.

U.S. officials refused to comment on the warning and it was uncertain whether Turki’s shot was a genuine threat or reflected Riyadh’s anger at the White House’s Arab spring policy.

U.S. officials mU.S.t also weigh the possibility that a U.S. veto could inflame Palestinian opinion, further threatening the security of Israel, as political turmoil rages around its borders.

A veto would likely further sour the tense relationship between Obama and Abbas, which started with such promise after Obama called the Palestinian leader in one of his first acts in office.

Abbas appears dismayed that the U.S. leader has been unable to budge Netanyahu on peace talks, and the White House has given every impression it is infuriated with all parties in the Israeli-Palestinian imbroglio.

But despite unpleasant consequences of a U.S. veto of Palestinian statehood, a change of heart by Obama looks impossible.

Weakened by the stagnant economy, targeted by Republicans who brand him anti-Israel due to his clashes with Netanyahu and facing a reelection race in which Jewish voters are important, Obama has no political capital left to burn.