The State of Israel officially informed Jerusalem's District Court last week that on direct instructions from the prime minister's and defense minister's offices, the Agan Ayalot project in Givat Ze'ev, north of Jerusalem, was hereby frozen. The project could not be continued due to undertakings by Ehud Olmert and Ehud Barak, respectively, to halt all construction in all settlements. A fortnight earlier Olmert's veto prevented the completion of a new development at Ma'aleh Adumim, east of the capital. In his most recent interview with The Jerusalem Post just a few weeks ago, Olmert strikingly spoke of Ma'aleh Adumim as an indivisible part of Jerusalem and Israel. The Givat Ze'ev volte face is all the more dramatic given that, until a few weeks ago, government lawyers were seeking to prevent frustrated contractors from backing out of the project to construct 600 housing units at the Agan Ayalot site. The issue reached the courts because the project had effectively been stymied since the outbreak of the second Intifada in 2000. Contractors, who won costly tenders and invested in infrastructure and financial guarantees, sued the state for breach of contract. Lately, swayed by official assurances, some had resumed redevelopment and marketing apartments to individual home buyers. Government attorneys stipulated to the court last month that "the state strongly believes in and backs this project, in which it has already invested NIS 100 million, completing the infrastructure and access roads in a manner that would facilitate the erection of apartment blocks and handing them over to full occupancy as soon as the construction is over. The state is committed to furthering this project and is not interested in terminating legal contracts with the builders." But when the builders agreed to extend their about-to-expire contracts with the Housing Ministry, the state informed the court that the project was now suspended, under orders from the prime minister and defense minister. The turnabout - both in semantics and policy - is hard to reconcile with the claims made both by Olmert and his predecessor, Ariel Sharon, that the Americans are sympathetic to the notion of Jerusalem-area settlements remaining under Israeli rule in a permanent accord with the Palestinians. Indeed it is frequently asserted that American sympathy for Israel's maintaining major West Bank settlement blocs is all but confirmed in US President George W. Bush's April 2004 letter to Sharon. In that same recent interview with the Post, Olmert praised Bush precisely for subscribing to a vision of Israel's future based on "67 plus" - that is, a recognition that Israel's vital interests preclude a return to the pre-1967 borders. Yet Secretary of State Condoleezza Rice told this newspaper just before she and the president set out for their last visit to the region that even Har Homa, situated within Israeli-claimed sovereign Jerusalem, constitutes a settlement as far as the US is concerned. More than 40 years after Israel captured the eastern half of the city and the West Bank in the Six-Day War, it is plain that this government, like all its predecessors, has failed to come up with a blueprint for vital settlement construction, follow it, and explain the logic to the international community. The security and demographic imperative to maintain the settlement blocs in the Jerusalem area is compelling. The building project freezes at Ma'aleh Adumim and now Givat Ze'ev, however, suggest that the current government does not share this view and that the American administration's 2004 letter notwithstanding, rejects it too. Indeed, it seems plain that the freeze is a direct consequence of American pressure, amid Bush's accelerated 2008 countdown to a permanent Israeli-Palestinian accord. At the same time, it should be noted, the government is demonstrating a parallel tendency to capitulation when it comes to the illegal West Bank outposts it has pledged repeatedly to dismantle. Month after month goes by, promises are gravely repeated, nothing happens on the ground, and the government's domestic and international credibility declines inexorably - in the process reducing any prospect of outside support for those settlement interests that are truly vital. With settlement, as with so many other areas of policy, the government's only aspiration seems to be survival. And if survival means capitulating to American pressure one day, and pressure from the champions of the illegal outposts the next, so be it. The terrible consequence, of course, is the sacrificing of crucial Israeli interests along the way.