Sounds like that middle finger from The One at the White House earlier this week didn’t have the desired effect. Go figure.

Late Friday evening, Israel Radio reported that Netanyahu holds to the view that Israel must not change its policy in Jerusalem, despite the fact that this was the main point of contentions between Israel and the United States.

However the circle of seven top ministers, known collectively as the ‘Septet’, did not come to any conclusions following the five-hour discussion and will probably only announce the government’s position after the Passover Seder which occurs Monday evening.

That’s not the only disappointment he has in store for Obama, assuming Haaretz’s reporting is accurate:

In closed talks, Netanyahu clarified that he has no intention of breaking up his rightwing coalition to form a more moderate centrist alliance, despite continuing pressure from the United States for a compromise over Israeli building in east Jerusalem.

“I do not need coalition partners to pressure me into continuing to build in Jerusalem,” he said. “I, myself, plan to continue building in Jerusalem as all previous prime ministers did before me.”

We’re dealing with boutique issues involving a foreign country here, but does everyone grasp how stupid it is to make building in Jerusalem some sort of linchpin condition to peace talks? As Netanyahu notes, it was never a controversial issue before; in fact, read this post at Commentary quoting an exchange Obama envoy George Mitchell had with Charlie Rose just two months ago in which Mitchell all but shrugged at the idea of Israelis building there. Quote: “It’s what they regard as their country. They don’t say they’re letting us go ahead when we build in Manhattan.” But now, because of the diplomatic affront to building there during Biden’s visit, Obama’s prepared to make this some sort of cornerstone concession in the interest of saving face — which, ironically, will only make him lose more face as Netanyahu is forced to defy him. (The Israelis are hoping some token concessions, like releasing Palestinian prisoners, in lieu of a settlement freeze might be enough to smooth things over.) No wonder he’s holding onto his right-wing coalition, too, despite the White House’s hopes for something more centrist: According to a new poll conducted by the JPost, 48 percent of Israelis think Obama favors the Palestinians over Israel. Just 30 percent think he’s neutral and a cool nine percent think he’s pro-Israeli. Sounds like the makings of concessions from a right-wing government to me!

To the great surprise of no one, Iran has now seized on this spat and is propagandizing the hell out of it, turning the non-issue of Jerusalem settlements into a very big issue indeed, which will make it that much harder to reach a peace agreement. But then, who could have seen that coming, except everyone? Exit question: Is Noah Pollak right? Netanyahu can’t cave to Obama without looking dangerously weak but alienating the U.S. will leave Israel dangerously isolated, so he may feel obliged to do something desperate. Good work, smart power.