On Friday, Bibi Netanyahu’s government announced it was planning additional settlement construction in the West Bank and East Jerusalem. European capitals have demanded an explanation from Israeli diplomats, and the U.K. and France have contemplated summoning home their own envoys in protest. But the White House’s criticism has been fairly muted. “We oppose all unilateral actions,” White House spokesman Jay Carney said on Monday, “as they complicate efforts to resume direct, bilateral negotiations.”To be sure, the White House is somewhat constrained in criticizing Israel for “unilateral actions” after Mahmoud Abbas went to the United Nations’ General Assembly to declare Palestine an independent state. And with delicate negotiations over the fiscal cliff foremost on the president’s agenda, the administration seems loath to give Republicans an opportunity to attack President Obama over Israel.Still, the reticence is striking. Compare the White House’s language this week to its response in March 2010 when Israel announced that 1,600 new East Jerusalem housing units were approved during Vice President Joe Biden’s visit. The administration went ballistic. At the president’s instructions, Secretary of State Hillary Clinton chewed out Netanyahu on a 45-minute phone call, which was conveniently leaked to the press. The administration “condemned” the “insulting” action, using language rarely used by one ally to describe the actions of another.Some predicted that a second-term Obama would exact a certain amount of revenge against a world leader who openly challenged and even lectured him in the White House—but it appears the opposite has happened. The administration was strongly supportive of Israel during Operation Pillar of Defense, and the fact that it happened after the presidential elections was proof of Bibi’s good sense of timing and that Obama recognizes Israel as a strategic asset, not merely as an electoral chip. If the past few weeks are any guide, and with Netanyahu almost certain to win again in January, it looks like the dark ages of Obama-Netanyahu warfare may have ended.“They are both smart and disciplined enough to want to repair the relationship somewhat,” said Elliott Abrams, deputy national security adviser to George W. Bush and now a senior fellow at the Council on Foreign Relations. “Both Bibi and Obama realize that they are going to have to face the problem of Iran together.”***The years 2009-2012 may have marked one of the lowest moments in U.S.-Israel relations—a period full of snubs, including Bibi being called to the White House and left alone with his staff as the president ate dinner with his family, constant reproaches, and even insults.So, what changed? The fact is that there are just too many important issues that Washington and Jerusalem need to work together on in the immediate future. If the peace process per se is no longer at the top of the list, regional experts and former policymakers I spoke with agree that the two need to cooperate on establishing some sort of road map for the future of Palestinian-Israeli relations. Most important, the allies need to work together on the region’s most pressing concern: Iran’s nascent nuclear-arms program.Some have argued that Israel’s recent campaign against Hamas commanders and its long-range missile arsenal in Gaza may have been a test-run for a more extensive attack against Iranian nuclear sites. If so, Operation Pillar of Defense suggests that the pattern looks something like this: Israel pulls off the military campaign while the United States does the diplomatic and political work. With Gaza, that amounted to keeping the Europeans quiet and the more delicate act of reminding Egyptian President Mohamed Morsi that Egypt’s national interests are best served by keeping the peace with Israel. Any campaign against Iran is going to involve yet more coordination, if not camaraderie.Abrams agrees with the conventional wisdom that the military and security relationships between the two countries are as strong as ever. “But both Obama and Bibi recognize that the two governments need an improved relationship at the political level,” he said. “Pillar of Defense was an opportunity to show they can and will, and with Iran around the corner it becomes more important. But we’re not talking about a friendship here.”Aaron David Miller, who served as a Middle East adviser to Democratic and Republican secretaries of state, put it more strongly: “It is the most dysfunctional relationship between a U.S. president and an Israeli prime minister,” he told me. “There have been other dysfunctional relationships, like Carter and Begin, Bush 41 and Yitzhak Shamir, Bibi and Clinton. Circumstances turned them into functioning relationships,” said Miller. “But Obama’s view of Israel is somehow unique. He was born after the occupation and functioned in an academic environment where being good on Israel is not necessary. He doesn’t have that spontaneous ‘I’m going to side with Israel’ that Clinton and Bush 43 had. He’s the first post-Leon Uris Exodus president.”Paradoxically, what may be the tie that binds Bibi and Obama is not a policy success, but a failure. The difference between now and 2009, said Tamara Cofman Wittes, who served as deputy assistant secretary for Near Eastern Affairs in the Obama Administration until she left to run the Saban Center for Middle East Policy at the Brookings Institution in March 2012, is the relative importance of the peace process to the actors on the ground. “With Operation Cast Lead there had been a major war in Gaza, Hamas was degraded, and the question was: How do you shape this in a positive direction? Bibi was elected and made the Bar Ilan speech talking about two states for two peoples, and Obama took him at his word,” Wittes told me.What changed the dynamic between Washington and Jerusalem, she said, “is that they tried with the peace process and failed. The administration has made a realistic assessment of where the two parties are and adjusted expectations to match.” In other words: It’s clear to the United States and Israel that the Palestinian leadership is not ready to make a deal right now. (And even if it was, it’s unlikely the majority of the Israeli electorate would be willing to go for it.) That’s essentially what Clinton said this past weekend at the Saban Forum in Washington. “If and when the parties are ready to enter into direct negotiations to solve the conflict,” Clinton told a room full of senior American policymakers, Israeli officials, and journalists, “President Obama will be a full partner.”It was reminiscent of Jim Baker’s “when you’re serious about peace, call us”—except more polite, said Wittes. The chances of such an agreement that would bring an end to the conflict are slim to none, said Aaron David Miller; “Israeli elections are likely to strengthen Bibi. And the Palestinian national movement, split between Fatah and Hamas, is like Noah’s Ark: They’ve got two of everything. Two leaderships, two visions, etc.” The question then, said Abrams, “is that if you believe a comprehensive settlement is not going to happen, what do you do? Do you help Fatah, strengthen the Palestinian economy? How do you prevent the collapse of the P.A.?”Some Israelis at the Saban Forum, like Foreign Minister Avigdor Lieberman, argued that the goal now should be “to make the status quo as strong as possible, and reinforce it,” according to Wittes. “Secretary Clinton clearly expressed a very different perspective—that the status quo is not sustainable. So, where are we headed here? If the U.S. says there is nothing going here and we have other fish to fry—like the pivot to Asia—what is our desired end state? That is the conversation that needs to happen now.”But Asia isn’t the other fish to fry—it’s Iran. That, ultimately, is the essence of this Israeli-American reset. Four years ago the White House was pushing the peace process in spite of what American allies—Israel and Sunni powers like Saudi Arabia—told the newly elected commander in chief. Four years later, Obama seems to have finally internalized that message.***Like this article? Sign up for our Daily Digest to get Tablet Magazine’s new content in your inbox each morning.Lee Smith is the author of The Consequences of Syria.