Jerusalem Hotel Divides U.S., Israel

Irving Moskowitz is 81 and lives in Miami Beach. A devout Jew and the father of eight children, he has made hundreds of millions of dollars in the hospital and casino businesses. With a foundation financed with the profits from a bingo hall in Hawaiian Gardens, California, Moskowitz helps the victims of tsunamis, tornadoes and earthquakes, the poor in California and Israelis with cancer.

Moskowitz was born in New York to parents who immigrated to the United States from Poland. The Nazis killed many members of his family, which helps to explain why he is so passionate about Israel. He makes it clear that he wants to help develop the country into a "safe haven" for Jews from around the world, and he is consistent about living up to his promise. Moskowitz donates a lot of money -- his critics estimate $100 million (€70 million) to date -- to religious and often radical settlers in East Jerusalem and the West Bank.

VIDEO: Israel Refuses to Stop Settlement ConstructionPlay

The multimillionaire first attracted attention in the early 1990s, when he provided financial support to settlers who were buying up houses in the Arab section of Jerusalem's Old City. After that, he helped acquire a piece of land on the Mount of Olives, near the Palestinian Ras al Amud neighborhood, triggering serious unrest. He supported subsequent projects in other Arab neighborhoods of East Jerusalem, including Silwan and Sheikh Jarrah. Hundreds of Israelis live in these neighborhoods today, in homes with bars on the windows, security cameras at all entrances and security forces for protection.

As a result, a ring has been placed around East Jerusalem that is intended to impede partition of the Israeli capital -- one of the political objectives of the American multimillionaire's acts of charity. Moskowitz makes no secret of his motives. He has compared the Oslo Accords, which were intended to encourage accommodation between Israelis and Palestinians, with the appeasement policies of the Western powers toward Hitler. Moskowitz refers to peace talks as "Israeli suicide."

In 1985, Moskowitz purchased the old Shepherd Hotel, a large, stone building on a hill in the East Jerusalem neighborhood of Sheikh Jarrah. The windowpanes are broken and dirty plastic tarps cover the window openings. It is a building with history, built as a residence in the 1930s by the Grand Mufti of Jerusalem, Mohammed Amin al-Husseini. It was later used as the headquarters of the Israeli border police.

The Shepherd Hotel stands empty today. Moskowitz wants to have it demolished so that he can erect apartment buildings for religious tenants on the property. He has just been granted a building permit for a structure consisting of 20 luxury apartments and an underground garage.

A Cool Act of Dissociation

The development project has become a political issue, which means that Moskowitz has achieved what he set out to do -- and that is to give symbolic clout to his venture. Even the White House and the State Department in Washington have turned their attention to Moskowitz's investment in East Jerusalem.

Deputy Secretary of State Jacob Lew made it clear to the Israeli ambassador in Washington, Michael Oren, that the Obama administration was not pleased. He told Oren that Israel, by approving such construction projects, sabotages negotiations with the Palestinians, and that it should refrain from taking "unilateral steps." It was a cool act of dissociation, unusual in the relationship between the US and Israel.

It was even more unusual that Israeli Prime Minister Benjamin Netanyahu publicly rejected the reprimand. "We cannot accept the idea that Jews will not have the right to live and purchase in all parts of Jerusalem," he said. Foreign Minister Avigdor Lieberman had a photo circulated that depicted the Grand Mufti meeting Adolf Hitler. It was a somewhat clumsy provocation. After all, is it even possible to justify the need for the construction project that way?

A new tone has taken hold between the two governments. Gone are the sunny days of mutual understanding. Since Netanyahu became prime minister and Barack Obama president, the small country and its much larger protective power have become increasingly estranged. Although the United States never approved of the Jewish settlements, it tolerated them for a long time. Now they have become the political symbol of a growing conflict.

The US president, for his part, has a good reason to keep his distance. He wants to prove to the Arab world that the superpower is seeking a new beginning in the Middle East. By criticizing the construction of settlements, Obama wants to demonstrate that America's one-sided support for Israel is a thing of the past.

An Unneccessary Isolation

Netanyahu knows America well, having lived there for many years, and he has also served as Israeli prime minister once before, from 1996 to 1999. But he has underestimated the consequences of the shift in Washington's basic position. His country has become unnecessarily isolated -- a situation for which, ironically, Netanyahu holds two Jews in the White House responsible: White House Chief of Staff Rahm Emanuel and senior presidential advisor David Axelrod, who he calls "self-hating Jews."

George Mitchell, the US special envoy for the Middle East, is a calm, experienced and tough negotiator. The Israeli government cancelled two meetings with Mitchell because of the conflict over the settlements. Netanyahu claims that the Obama administration is violating a commitment made by the Bush administration years ago, under which Washington sanctioned Israel's continue expansion of settlements to create more space for existing residents. The Obama administration disputes any such commitment was made.

If anyone knows whether Netanyahu's claim is true, it is Dov Weissglas. He was the key advisor to former Prime Minister Ariel Sharon, who had a particularly good relationship with former US President George W. Bush.

Washington Shifts on Settlements

Yes, says Weissglas, there was an agreement with the Bush administration that allowed Israel to expand the settlements within the existing borders, but it was unofficial. "Publicly, the United States always opposed Israeli settlement construction," says the former advisor, who is now an attorney in Tel Aviv. In that respect, he says, Bush, who was considered a decidedly pro-Israel president, did not differ from Obama.

But because Netanyahu is unwilling to grant the Palestinians their own country, a goal the United States and the European Union have set, he shouldn't be surprised to see the Obama administration reversing the Bush administration's policies on the settlement issue, says Weissglas.

Israel has had many a conflict with former US administrations, but in most cases the public only learned of the conflicts after they had been resolved. Former US President Bill Clinton had his problems with both the right-wing Netanyahu and social democrat Ehud Barak. Netanyahu suffered from a "lack of judgment," White House officials said at the time. And in commenting on Barak and the failed negotiations between the Palestinians and Israelis in the summer of 2000, Clinton writes in his memoir: "I was, to put it mildly, disappointed." Barak, he writes, was playing for time.

Right-wing governments have not been the only ones to support settlement construction, which Prime Minister Barak also promoted. It is only now, under Netanyahu, a good friend of businessman Moskowitz, that the settlements are becoming a bone of contention, and a symbol of estrangement between the United States and Israel. The difference between yesterday and today, says former Sharon advisor Weissglas, is that now the reliable ties between Washington and Jerusalem have been severed. Weissglass says that Sharon had several telephone conversations every week with the White House and the State Department. By contrast, Netanyahu, reportedly has no direct line to President Obama.

Because of all of this, a run-down building like the Shepherd Hotel can suddenly acquire political significance. The new construction would benefit the Ateret Cohanim ("Crown of the Temple Priests") group of settlers, a radical Zionist group that has been buying houses in the Arab sections of the Old City and distributing them to Jews. Because the Netanyahu administration supports the effort, nothing stands in the way of conversion of the Shepherd Hotel into new apartments for Jewish settlers.

Translated from the German by Christopher Sultan.