President Barack Obama is now "faced with the default position, which is words," said Miller from the Woodrow Wilson International Center for Scholars.
"And the louder they shout, the more there is a paradox. The tougher the words are, the weaker we look."
Ten months into office, Obama has hit a brick wall as his high-profile push to restart negotiations falls flat, damaging his broader aim to improve ties with the Arab and Muslim world.
After coming into office vowing to make the push for an elusive peace a top priority, the administration appears weaker than ever in the Middle East.
Israel's hawkish Prime Minister Benjamin Netanyahu has repeatedly defied US calls to totally halt settlements; and the Palestinian leadership -- weaker and more divided than ever -- refuses to resume talks without such a freeze.
Arab states meanwhile have balked at US appeals to take partial steps toward normalization with Israel, Washington's main regional ally.
After Israel on Tuesday approved the building of hundreds of new homes in annexed east Jerusalem, Obama said such moves make it harder for the Jewish state to make peace with its neighbors and ensure its own security.
"I think it embitters the Palestinians in a way that could end up being very dangerous," the president warned on Fox News Wednesday.
Israel considers mainly Arab east Jerusalem to be an integral part of its capital, but the Palestinians want to make it the capital of their promised state.
Haim Malka, of the Center for Strategic and International Studies (CSIS), told AFP that "the administration’s change of tone is intended to send a strong message that settlement building hurts efforts to restart negotiations."
But it is "unclear whether the tougher language and approach will actually help restart substantive negotiations or merely heighten Israeli misgivings about negotiations with a weak and divided Palestinian leadership," he said.
Shibley Telhami, a Middle East analyst at the University of Maryland, said Obama had no choice but to make a strong statement on the project in Gilo, east Jerusalem.
"The administration has been counseling privately against this project, and obviously it is seen as a direct challenge," Telhami told AFP.
On Tuesday White House and State Department officials both voiced dismay at the construction plans and warn the move could stymie hopes of breathing fresh life into the deadlocked peaace talks.
Israel captured east Jerusalem with the rest of the West Bank in the Six Day War of 1967. It later annexed it in a move never recognized by the international community and insists on retaining the whole of the Holy City as its "eternal, indivisible" capital.
Amjad Atallah, an analyst with the New America Foundation, said the latest US remarks show "the administration has decided to draw a rhetorical line in the sand" but without making Israel pay the consequences.
"You can expect the Israelis to continue poking their finger in America’s eye -- until they are made to stop," Atallah told AFP.
In a sign of just how far apart the two sides are, Palestinian officials have said they intend to ask the UN Security Council to recognize Palestinian statehood in a unilateral move discouraged by the US and the European Union.
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Image: AFP/File/Jim Watson.