A central pillar of the Obama administration's Middle East policy paradigm was shattered at the Fatah conference in Bethlehem - but don't expect the White House to notice.

At the conference, Fatah's supposedly feuding old guard and young guard were united in their refusal to reach an accommodation with Israel. Both old and young endorsed the use of terrorism against Israel. Both embraced the Aksa Martyrs Brigades terror group as a full-fledged Fatah organization.

Both demanded that all Jews be expelled from Judea, Samaria and Jerusalem ahead of the establishment of a Jew-free Palestinian state.

Both claimed that any settlement with Israel be preceded by an Israeli withdrawal to the indefensible 1949 armistice lines and by Israel's destruction as a Jewish state through its acceptance of millions of foreign-born, hostile Arabs as immigrants within its truncated borders.

Both demanded that all terrorists be released from Israeli prisons as a precondition for "peace" talks with Israel.

Both accused Israel of murdering Yasser Arafat.

Both approved building a strategic alliance with Iran.

In staking out these extremist positions, both Fatah's old guard and its younger generation of leaders demonstrated that Fatah's goal today is the same as it has been since the its founding in 1959: Liberating Palestine (from the river to the sea) by wiping Israel off the map.

Fatah leader Mahmoud Abbas's decision to remove both his own mask and that of his organization should cause the Netanyahu government to reassess its current policies toward the group. For the past four months, Prime Minister Binyamin Netanyahu and his government have quietly barred all Jewish construction in eastern, northern and southern Jerusalem neighborhoods, as well as in Judea and Samaria. The government's unofficial policy has been implemented in the hopes of pleasing the Obama administration, which argues that by barring Jewish building, Israel will encourage the Fatah-controlled Palestinian Authority to moderate its policies and so engender an atmosphere conducive to a peaceful settlement of the Palestinian conflict with Israel. The Fatah conference put paid to that fiction.

Fatah's message to the Netanyahu government is important. But even more important is the message it conveys to the Obama administration. For Netanyahu, the Fatah gathering bore out his prior assessment that the group is a wolf in sheep's clothing. For US President Barack Obama, the message of the Fatah conclave was that his administration's assumptions not only about Fatah, but about terrorists and terror-supporting regimes in general are completely wrong.

FOR THE Obama administration, Fatah was supposed to be the poster child for moderate terrorists. Fatah was supposed to be the prototype of the noble terrorist organization that really just wants respect. It was supposed to be the group that proved the central contention of the Obama White House's strategy for dealing with terror, namely, that all terrorists want is to be appeased.

But over the past week in Bethlehem, Fatah's leaders said they will not be appeased. To the international community whose billions of dollars in aid money and boundless goodwill and political support they have pocketed over the past decade and a half they sent a clear message. They remain an implacable terror group devoted to the physical annihilation of Israel.

Unfortunately, the Obama administration is already making clear that it is incapable of accepting this basic truth. As Abbas and his cronies were exposing their true nature in Bethlehem, Obama's counterterrorism adviser, John Brennan, was giving a speech in Washington where he demonstrated the administration's ideological inflexibility.

Speaking before the Center for Strategic and International Studies last Thursday, Brennan declared that appeasing terrorists and terror-supporting regimes and societies by bowing to their political demands is the central plank of the administration's counterterror strategy. As he put it, "Even as we condemn and oppose the illegitimate tactics used by terrorists, we need to acknowledge and address the legitimate needs and grievances of ordinary people those terrorists claim to represent."

To this end, Brennan stressed that for the Obama administration, the now-discredited Fatah model of conferring political legitimacy and funding on terrorists in a bid to transform them into good citizens must be implemented for every terror group in the world except al-Qaida. In furtherance of this goal, the US government will no longer refer to America's fight against terror as a "war on terror" and it will no longer refer to the enemy it fights as "jihadists" or the cause for which these "violent extremists" fight a "jihad."

As Brennan explained it, referring to terrorists as terrorists is unacceptable because doing so sets the US against terror-supporting regimes that the Obama administration believes are all amenable to appeasement. And referring to Islamic terrorists as jihadists gives the jihadists the "right" to define what jihad is. Since the Obama administration perceives itself as a greater authority on Islamic law and tradition than the likes of Osama bin Laden, Ayman Zawahiri, Ayatollah Khomeini, Khaled Mashaal and their fellow jihadists worldwide, Brennan unhesitatingly asserted that "'Jihad'... means to purify oneself or to wage a holy struggle for a moral goal."

Building on the false Fatah model of appeasable terrorists, Brennan indicated that the Obama administration believes that Hizbullah is well on its way to becoming a respectable political actor. As he sees it, simply by participating in Lebanon's political process, the Iranian proxy has earned the right to be viewed as a legitimate political force. Brennan cited the fact that in addition to active terrorist elements, Hizbullah members today include "members of parliament, in the cabinet; [and] there are lawyers, doctors, others who are part of the Hizbullah organization" as a reason to celebrate the group. He further claimed that Hizbullah members who are not actively involved in terrorism "are in fact renouncing that type of terrorism and violence and are trying to participate in the political process in a very legitimate fashion."

As The Jerusalem Post's Barry Rubin argued on his Web site, The Rubin Report, Brennan's assessment of Hizbullah is not merely factually wrong. It also exposes a deep misunderstanding of why Hizbullah entered the Lebanese political fray - and why Hamas entered the Palestinian political fray - in the first place. Brennan's analysis is factually wrong because at no point has any Hizbullah member ever condemned or in any way criticized its paramilitary or terror cadres. To the contrary, Hizbullah's nonmilitary personnel have gone on record repeatedly praising their terror brethren and have expressed disappointment that they are not among the movement's fighters.

Like Hamas - which Brennan in the past has expressed support for recognizing - Hizbullah entered Lebanese politics with the intention of taking over the country. It wishes to control Lebanon both to protect its military forces, and to advance its jihadist aim of spreading the Iranian revolution and destroying Israel. Like Hamas, Hizbullah's political empowerment has not moderated it. It has strengthened its military arm and made it politically impossible for its domestic rivals to oppose its war against Israel, its ties to Iran and Syria and its independent military force.

Unfortunately, as Brennan made clear last Thursday, the Obama administration is intellectually wed to the notion that terrorists like Hassan Nasrallah, and terror-supporting regimes like Bashar Assad's Syria and his overlords in Iran just want to be accepted by the West. They cannot accept any evidence to the contrary.

THIS WEEK the Obama administration dispatched senior military officials to Damascus for yet another round of friendly talks with the Iranian satellite. According to media citations of Pentagon and State Department officials, the administration is looking to cut a deal where in exchange for Syrian agreement to curtail its support for jihadists in Iraq, the US will put pressure on Israel to surrender the Golan Heights to Syria.

As for Iran, the administration has officially given the mullahs until next month to decide whether they are interested in negotiating a deal with the US regarding their nuclear program. Although Secretary of State Hillary Clinton and her colleagues in the administration are beginning to acknowledge that Iran will not meet their deadline, the administration has no Plan B.

The White House continues to oppose placing additional sanctions on Iran. State Department officials said this week that they fear that additional sanctions - including widely supported Congressional bills that would limit refined petroleum imports to Iran - would cause the Iranian public to rally around the regime. The fact that the Iranian public is in large part now begging Western countries to reject the legitimacy of the regime has made no impact on the Obama administration. Indeed, top US officials are unanimous in their willingness to accept Mahmoud Ahmadinejad as the legitimate president of Iran. Appeasement remains the only option the administration is willing to consider.

The Obama administration's unswerving efforts to accommodate terrorists and terror-supporting regimes wherever they are to be found demonstrates that for the administration, appeasement is not a tactic for achieving US policy aims. Appeasing terrorists and regimes that support them is the aim of US policy.

All of this makes clear that in spite of its reasonable desire to reach a deal with the Obama White House, the Netanyahu government must abandon any plans to do so. The Post reported this week that the government is now negotiating a six-month extension of its unofficial ban on Jewish construction in Jerusalem, Judea and Samaria with US officials. These negotiations must be ended immediately.

Indeed, the proper response to the Fatah conference is for the government to announce that it is approving all building requests it has held up for the past four months. It should also declare that from now on it will treat all requests for building permits in Judea and Samaria and Jerusalem in the same manner that it treats such requests from everywhere else in the country.

The Obama administration's devotion to appeasement shows that even if it wished to reward Israel in some way for going along with a construction freeze, it has nothing to offer. The only play in its game book is further concessions to terrorists and regimes that sponsor them. A settlement freeze will lead to a demand to accept a Lebanese "unity" government where Hizbullah reigns supreme, or a Palestinian "unity" government that paves the way for Hamas's international legitimization. An Israeli willingness to discriminate against Jews in Jerusalem will lead to a further demand that Israel cede the Golan Heights to Damascus, and accept Iran as a nuclear power.

For the Obama administration there is but one way of looking at terrorists: Just as Fatah can be appeased, so the mullahs can be accommodated.

Fatah's message that it will not be appeased is a message the Obama administration will never receive.

caroline@carolineglick.com

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