Netanyahu does not believe in peaceful co-existence between equals. He views Israel’s relations with the Arab world as one of permanent conflict, as a never-ending struggle between the forces of light and the forces of darkness.  In his 1993 book – A Place among the Nations: Israel and the World – the image he presents of the Arabs is consistently and comprehensively negative. Nor does he admit any possibility of diversity or change.  The book does not contain a single positive reference to the Arabs, their history or their culture. Autocracy, violence, and terrorism are said to be the ubiquitous facts in the political life of all the Arab countries. A democratic shift on the Arab side is a precondition to genuine peace with Israel, wrote Netanyahu, in the confident expectation that such a shift is beyond the realm of possibility. The Arab Spring has proved him wrong.

The coalition government headed by Netanyahu is the most aggressively right-wing, diplomatically intransigent, and overtly racist government in Israel’s history. His Foreign minister is Avigdor Lieberman, the leader of the far-right party Yisrael Beiteinu, Israel is Our Home. Lieberman has set his face against any compromise with the Palestinians and he also favours subjecting Israel’s 1.5 million Palestinian citizens to an oath of loyalty to Israel as a Jewish state. Netanyahu’s Defence Minister is Ehud Barak who destroyed and then defected from the Labour Party to form a small break-away faction called Independence. A former chief-of-staff, Barak suffers from a déformation professionelle: he regards diplomacy as the extension of war by other means. Barak is a bitkhonist, a security-ist who wants 100 per cent security for Israel which means zero security for the Palestinians.

The ideological make-up of this coalition government militates against a land-for-peace deal with the Palestinians. It is a government of militant nationalists whose aim is to redraw unilaterally the borders of Greater Israel. The government is democratically elected but by putting nationalism above morality and international legality, and by relying on military power to subjugate another people, it is in danger of drifting towards fascism. And it is already drifting away from the common values that constitute the foundation of the special relationship between the United States and the State of Israel.

On 14 June 2009, Netanyahu gave a speech at Bar-Ilan University in which, under strong American pressure, he grudgingly endorsed a ‘Demilitarized Palestinian State’. This was hailed as a reversal of his government’s opposition to an independent Palestinian state. But the change was more apparent than real. Judged by his deeds rather than rhetoric, Netanyahu remained the relentless rejectionist that he had been throughout his singularly undistinguished political career. The litmus test of commitment to a two-state solution is a freeze of settlement expansion on the West Bank and in East Jerusalem, the capital of the future Palestinian state. Under Netanyahu’s leadership, however, settlement expansion has gone ahead at full tilt, especially in and around Jerusalem.

Jerusalem is the most sensitive issue in this tragic, hundred year-old conflict. By putting Jerusalem at the forefront of his expansionist agenda, Netanyahu knowingly and deliberately blocks progress on any of the other ‘permanent status issues’ such as borders and refugees. Netanyahu is not a peace-maker; he is a land-grabber who rides roughshod over Palestinian rights. It is he who has turned the so-called peace process into an exercise in futility. He is like a man who pretends to negotiate the division of a pizza while continuing to gobble it up.

Barrack Obama reiterates at regular intervals that the bond between America and Israel is ‘unbreakable’. If anyone can break this bond, it is Benjamin Netanyahu. Early on in his presidency, Obama identified a settlement freeze as the essential precondition for progress in the American-sponsored peace process. During his Cairo speech, on 4 June 2009, he made it clear that ‘The United States does not accept the legitimacy of continued Israeli settlements’. Obama had three confrontations with Netanyahu over the demand for a settlement freeze and he backed down each time. Moreover, Obama has all but turned over to Netanyahu the American veto on UN Security Council. Since 1978 America has used the veto forty-two times to defeat resolutions critical of Israel. The most egregious abuse of this power happened in February 2011 when a resolution condemning Israeli settlement expansion was supported by fourteen members and killed by America. That was a veto of America’s own foreign policy.

How can a jimcrack politician from a small country defy the most powerful man in the world and get away with it? At least part of the answer lies in the enduring power of the Israel lobby. Ever since 1967 the lobby has opposed every international plan for resolving the Palestinian-Israeli dispute that was not to Israel’s liking. But any proposal for a military strike against Israel’s enemies can count on the support of Israel’s friends in Washington, Iraq in 2003 and Iran today being the most obvious examples. In the case of Iran, Netanyahu is the war-monger in chief and he is doing his utmost to drag America into a dangerous confrontation that cannot possibly serve American interests. The region is like a tinder box and one spark could set off a major conflagration.

On 5 March, President Obama is due to receive the Israeli prime minister in the White House. At their first meeting, on 19 May 2009, Obama’s priority was Palestine whereas Netanyahu only wanted to talk about the Iranian threat. Subsequently, Netanyahu succeeded in imposing his agenda on his ally. Today the peace process is in tatters and the war hysteria against Iran is gathering force. The challenge for Obama is to reign in his reckless junior ally and to reorder American priorities in the Middle East. The main threat to regional stability is not Iran but the Israeli occupation of the Palestinian territories. And the main source of hostility towards America throughout the Arab and Muslim lands is Israel’s oppression of the Palestinian people and America’s complicity in this oppression. If Obama cannot stand up to Bibi Netanyahu in defence of vital American interests, who will he stand up to? His own credibility as the leader of the free world is on the line.

Avi Shlaim is an Emeritus Professor of International Relations at Oxford University and the author of Israel and Palestine: Reappraisals, Revisions, Refutations (Verso).