Once again the Netanyahu government has shown the world that settlement construction is more about creating obstacles to peace than housing for Jews.Housing Minister Uri Ariel just cleared the way for 3,300 new housing units, calling them “a proper Zionist response” to the Palestinians forming a unity government.“These tenders are just the beginning,” he vowed.An outspoken opponent of Palestinian statehood, he took credit back in April for scuttling the Israeli-Palestinian peace talks organized by Secretary of State John Kerry by approving the latest round of tenders for new construction.He clearly and proudly intends settlements to be an obstruction to peace.Ariel apparently had the tacit support – if not encouragement – of his prime minister, who did nothing to counter that impression. In fact, Binyamin Netanyahu told a group of West Bank mayors last week that he is “the defender of settlements” and that any freezes have been only temporary and a result of intense pressure from the Obama administration.American diplomats have blamed the collapse of the latest peace talks on Israel’s aggressive settlement construction.A Haaretz editorial said Netanyahu’s “disastrous foreign policy” consists of “fanatically protecting the settlers’ interest at the expense of the national interest.”Like so many recent announcements of new settlement construction, the latest round appears to be driven more by spite and extreme ideology than necessity, a way to punish the Palestinians for making a deal with Hamas.Justice Minister Tzipi Livni, in name if not in fact the chief negotiator with the Palestinians, called the building an “unnecessary” and “provocative” policy blunder that “will only make it more difficult for us to rally world support against Hamas.”That was apparent as Netanyahu’s attempts to persuade foreign leaders to shun the new Fatah-Hamas coalition fell on deaf ears. One by one, even Israel’s closest allies ignored his urgings and instead announced their willingness to work with the new government, which had pledged to recognize Israel, honor all agreements and continue security cooperation.Israeli columnist Nahum Barnea saw this as more evidence that Netanyahu “has reached a new low in influence on world leaders.”Nowhere is that more dangerous or more apparent than in Washington.Labor party and opposition leader Isaac Herzog, who meets regularly with the prime minister, told Israel’s Channel 2 that Netanyahu “loathes” the American president.His “hostility” toward Obama is a “tragedy” that “endangers the security of Israel” and “one of Netanyahu’s gravest failures.”That animus has plunged relations at the leadership level to a new low, said former ambassador to Israel Dan Kurtzer, which he attributed to “extraordinary” interference in American domestic politics by Netanyahu and his circle.Israel is “completely isolated” internationally under Netanyahu, who fails to “understand the international arena,” Herzog said. “Netanyahu speaks (but) the world doesn’t listen.”The opposition leader called on the prime minister to offer his own two-state peace plan based on the pre-1967 borders with land swaps and other “arrangements” if Israel doesn’t want to lose international support and its identity as a Jewish and democratic state.That view is shared by two prominent Netanyahu coalition partners: Livni, leader of the Hatnua party, and Finance Minister Yair Lapid, head of the centrist Yesh Atid party.Livni called the settlements “a security, economic and moral burden” intended to prevent peace with the Palestinians.They are promoted as meeting a security need, she said, but in reality are a security burden.Lapid said settlements in remote parts of the West Bank are a waste of money and should be dismantled. Speaking at the annual Herzliya Conference on Sunday he called on the government to present a detailed peace proposal, including maps of what it sees as Israel’s future borders.Netanyahu quickly shot that down, suggesting Lapid was naïve and inexperienced because, in Netanyahu’s view, maps are premature because they will only become a starting point for Palestinian negotiators.Netanyahu may have publicly endorsed the two-state solution but he has failed – or refused – to translate that into policy or offer a peace plan of his own. He hasn’t even tried to get his own Likud party or his government to endorse the concept.Lapid said, “Extreme right-wing forces are pushing us toward the delusional idea of annexation, which will lead us to the disaster called a binational state.” He was referring to Naftali Bennett, leader of the ultra-nationalist, religious Bayit Yehudi party.Bennett, the economy and trade minister, wants to sever all ties with the PA and annex the major settlement blocs and Area C, which covers 61 percent of the West Bank and where Israel, under the Oslo Accords, has complete control. For the remainder of the West Bank, where over 90% of the Palestinians live, he proposes a form of autonomy but no independence.He dismissed warnings that his plan would provoke a severe international condemnation, saying don’t worry, “the world will get used to it” in time.Try it and I will bring down the government, Lapid threatened, if “even a single settlement” is annexed. And he can do it. Yesh Atid has 19 seats in Knesset, only one fewer than Netanyahu’s Likud, and without those votes the coalition falls below the 61-seat threshold and collapses.Livni has made a similar threat to bolt with her six mandates.Netanyahu could form a centrist coalition by dropping the extremists and bringing in Labor, but that would require a serious commitment to making peace, which the prime minister continues to resist.The announcement of several thousand new settlement permits brought more international condemnation than the establishment of the Fatah-Hamas coalition, and Netanyahu can’t shrug that off with the usual “the whole world is against us” excuse.One doesn’t have to be an anti-Semite or self-loathing Jew to know his settlements policy does more damage to Israel than to the Palestinians, that it threatens not only Netanyahu’s already frayed relations with Israel’s allies, particularly the United States, but also with an American Jewish community that has never cared much for the settlement enterprise.