The U.S. is (not unjustly) concerned that if Israel really cut loose it could easily spark a much larger war and reduce the Middle East to a glowing radioactive puddle. The March 31 issue of Time (the one with the Yassir Arafat cover) contains an article about such a war starting if the Israelis had Arafat killed, something which must be sooo tempting to the Knesset.
If Israel could conquer large amount of territory and set up sustainable and stable governments, the American stance might be different, but Israeli politics itself is highly contentious, with Prime Ministers changing almost biannually. An attempt to conquer and assimilate large Arab populations would lead to complete instability.
The U.S. itself has always acted with restraint since the end of WW2. Though full-scale all-out combat, up to and including nuclear force, must have been tempting in Korea and Vietnam (and Iraq and Afghanistan) they would ultimately do far more harm than good, because it would force massive retaliation from somebody, be it military or economic.
The modern Middle East is like the Cold War on speed. Large military forces meet for the occasional flare-up, but since neither side can conclusively defeat the other without resorting to weapons of mass destruction, the sitation remains a delicate staus quo until one side or the other undergoes major economic or social change. The Soviet Union couldn’t be defeated militarily (at least, not without killing everybody on Earth). It had to fall on its own. The Palestinians won’t be “conquered” unless they feel major social change that makes them individually wealthy and happy enough so that the destruction of Israel is no longer a priority. Alternatively, the Israelis won’t be “conquered” unless they’re decisively outbred by their Arab neighbors, or (incredibly unlikely) the U.S. withdraws aid and they suffer ecomonic collapse, and even then it’s hard to picture them being conquered and not torching the Middle East in the process. Certainly the U.S. will be disinclined to let Israel’s military and nuclear strength fall into the hands of Arab governments though a gradual assimilation of Israel.
Peace may come eventually, but it won’t be at the hands of any American president. It will require a collapse of one side or the gradual softening of both. Since Israel is more eager to embrace technology and educate its population, I’m betting the collapse won’t be theirs, but predictions are easy. Solutions are hard.
There are many differences between the U.S. and Israel, but the factors they have in common are crucial. Each of them contain educated populations, disproportionate military power, a strong spirit of national unity when attacked, a solid work ethic among its citizenry, and a recognition (though only in the last few decaces, and shaky at times) of women’s rights. This last one is very important for economic strength because it means half your population won’t be restricted in how productive they can be.
Meantime, I’m considering hybrid-electric for my next car.