Yedioth Achronoth, the largest circulation daily in Israel, is reporting that Rahm Emanuel has said that President Obama intends to implement a two state solution of Israel and Palestine within his first term in office. MJ Rosenberg, the Washington Director of Policy Analysis for the Israel Policy Forum reports:

Rahm Emanuel told an (unnamed) Jewish leader; "In the next four years there is going to be a permanent status arrangement between Israel and the Palestinians on the basis of two states for two peoples, and it doesn't matter to us at all who is prime minister."

He also said that the United States will exert pressure to see that deal is put into place."Any treatment of the Iranian nuclear problem will be contingent upon progress in the negotiations and an Israeli withdrawal from West Bank territory," the paper reports Emanuel as saying.  In other words, US sympathy for Israel's position vis a vis Iran depends on Israel's willingness to live up to its commitment to get out of the West Bank and permit the establishment of a Palestinian state there, in Gaza, and East Jerusalem.

Yedioth also reports that Obama is conveying his displeasure with the new Israeli government in several ways.