Beinart explains the White House’s thinking:
[I]nstead of confronting Netanyahu directly, Team Obama has hit upon a different strategy: stand back and let the rest of the world do the confronting. Once America stops trying to save Israel from the consequences of its actions, the logic goes, and once Israel feels the full brunt of its mounting international isolation, its leaders will be scared into changing course. “The tide of global opinion is moving [against Israel],” notes one senior administration official. And in that environment, America’s “standing back” is actually “doing something.”
America will still aid Israel militarily though, and continue to push back on the new Palestinian UN designation. However:
[U]nless events on the ground dramatically change, [America will not] appoint a big-name envoy (some have suggested Bill Clinton) to relaunch direct negotiations between Israel and the Palestinians. The reason: such negotiations would let Netanyahu off the hook. Senior administration officials believe the Israeli leader has no interest in the wrenching compromises necessary to birth a viable Palestinian state. Instead, they believe, he wants the façade of a peace process because it insulates him from international pressure. By refusing to make that charade possible, Obama officials believe, they are forcing Netanyahu to own his rejectionism, and letting an angry world take it from there.
I don’t blame the president. I do worry about Israel’s future if it cannot stop, reverse and destroy the settlements.