If there is any comfort in Israeli Ambassador to Washington Michael Oren’s remark this week that the current U.S.-Israeli diplomatic crisis is the worst between the two countries “in 35 years,” it’s that no one had the slightest idea of what event 35 years ago Mr. Oren was talking about. It was, it turns out, a dispute over an Israeli military withdrawal from part of Sinai as part of the post-Yom Kippur War disengagement process. Hopefully, 35 years from now no one will remember this awful week in U.S.-Israeli relations, either.

But awful it has been, starting with the incredibly stupid blunder of an Israeli announcement of plans for a new housing project in the over-the-1967-lines Jerusalem neighborhood of Ramat Shlomo just as Vice President Biden was setting out to visit Mahmoud Abbas in Ramallah, and ending with the even stupider and undoubtedly more malicious American reaction. A few more weeks of this and even 35 years may not suffice to forget them.

Whoever was responsible for the Israeli gaffe, no sane person can believe that it was Prime Minister Netanyahu or anyone close to him. Mr. Netanyahu may or may not be the scoundrel that several American presidents, past and present, seem to think he is, but no one has ever accused him of being a brainless idiot or a suicidal depressive. He would have had to be one of the two to want news of the new housing project to be released when it was.

But in any case, this is not the real issue. Nor – although this is what President Obama and his associates would like to turn it into – is the issue whether Israel should or should not build for Jews in some or all of the parts of Jerusalem annexed by it in 1967. A weighty question in its own right, that’s not what’s at stake now.

What’s at stake is American credibility and American honor. Four months ago, Israel and the United States concluded an argument regarding Israeli construction in the West Bank and former Jordanian Jerusalem with a compromise that neither government was particularly happy about: Israel reluctantly agreed to suspend all new construction in the West Bank for nearly a year, and the U.S. reluctantly accepted Israel’s refusal to do the same in Jerusalem. And yet however reluctant this acceptance was, America made it clear that it considered the Israeli position enough of a concession to push the “peace process” forward and that it was willing to live with it. On that basis, the Netanyahu government declared a West Bank freeze and began to enforce it, despite the anger this caused on the pro-settlement Israeli Right from which many of Mr. Netanyahu’s voters come.

Now, America has reneged on its word. Using the Ramat Shlomo incident as a pretext, it is demanding once again, as if an agreement had never been reached, that Israel cease all construction in “Arab” Jerusalem. Basically, it is saying: “We agreed to a compromise? So what if we did? Now you’ve insulted us and we’re taking our agreement back.”

This is a grave mistake. And it is gravest of all for the “peace process” that President Obama claims to be so eager to restart.

From the U.S. point of view, the format for the success of this process is clear: Israel must agree to return to its 1967 frontiers and agree to the establishment of a Palestinian state; the Palestinian state must recognize Israel; and the United States must guarantee the security of both countries and pledge that no Palestinian state will ever be used as a military springboard against Israel

Come again? A U.S. guarantee? What kind of guarantee can be expected from a country that cannot keep its word for longer than four months?

Israel has repeatedly been told, by the world and by America, that it must take “risks” for the sake of peace. And Israel has repeatedly been willing to take risks, many of which turned out to be unjustified, such its agreeing to withdraw its troops from Lebanon in 2006 in return for a U.N. resolution promising that Hizbullah would not be allowed to rearm and regroup – a commitment that has been so blithely ignored by the countries of the world, the United States included, that Hizbullah today has far more and more deadly arms than it had before the 2006 Israeli invasion. One could give many more examples.

Does the Obama administration wish to make Israelis even more cynical about American commitments than they already are and have good reason to be? If so, it is certainly doing a good job of it. Israel may have blundered when it announced the Ramat Shlomo project, but at least it was telling the truth. The American insistence that Israel now freeze all over-the-’67-lines Jerusalem construction means that four months ago America was lying. The next time an American president asks Israelis to count on America, he might ask himself: Why on earth should they?