Speaking before the weekly cabinet meeting, Science and Technology Minister Daniel Hershkowitz said: "The US administration understands what we have always said -- that the real obstacle to negotiations are the Palestinians."
The Israelis had reason to be glib.
In a joint news conference held, unusually, before talks with Prime Minister Benjamin Netanyahu, US Secretary of State Hillary Clinton pressed for negotiations to restart as soon as possible, despite the Palestinian insistence -- which Washington backed only a few months ago -- that Israel must first stop all settlement activity in the occupied West Bank.
"What the prime minister has offered in specifics of a restraint on the policy of settlements... is unprecedented," Clinton said at Saturday's news conference, adding that "there has never been a pre-condition, it's always been an issue within negotiations."
It marked a sharp easing of tone on the thorny issue.
In May, following US President Barack Obama's first meeting with Netanyahu, Clinton had said that Obama "wants to see a stop to settlements. Not some settlements, not outposts, not natural growth exceptions."
Israeli analysts said the change of tone came after Washington realised that its main ally would just not give in on settlements, supported by the vast majority of the electorate of Netanyahu's right-leaning government.
But the Palestinians warned that Washington's change of tone threatened to "deal a fatal blow" to US efforts to secure a peace deal.
"Pressuring Palestinians to make further concessions to accommodate Israeli intransigence is not the answer," chief Palestinian negotiator Saeb Erakat said in a statement.
"Palestinians cannot accept continued settlement construction... in violation of international law," he said, adding that "what would be unprecedented is a comprehensive settlement freeze by Israel."
Arab League chief Amr Mussa on Sunday ruled out any resumption of talks before a freeze on settlements.
"If there is no freeze on settlements, there is no wisdom: What are you negotiating? Why build more settlements? Why create another fait accompli? It is not serious," Mussa said.
Egyptian Foreign Minister Ahmed Abul Gheit agreed. "It is not reasonable or acceptable to conduct negotiations with the continuation of settlements," he told journalists in Cairo.
Syria's President Bashar al-Assad was more scathing.
"The current Israeli government does not want peace. There is no partner for peace in Israel. The (US) broker can therefore not do anything or be blamed if the Israeli side does not want peace," he said.
Clinton's visit came after months of shuttle diplomacy by US Middle East envoy George Mitchell failed to get Israelis and Palestinians to agree to resume peace talks suspended during the Gaza war at the turn of the year.
The Palestinians argue that a settlement freeze is not their precondition but an obligation Israel undertook when it signed on to the 2003 international roadmap for peace plan.
Having watched the number of Israeli settlers more than double since the start of the Oslo peace process, the Palestinians argue that negotiating without a freeze is pointless since during the talks Israel creates new facts on the ground that effectively eat away at the promised Palestinian state.
Ziad Abu Zayyad, a former Palestinian minister, said the Palestinians cannot partake "in negotiations over land when Israel is changing the land and building on it and is deciding before the fact what the results of the negotiations will be."
Warned Erakat: "Negotiations for their own sake ... provide a cover behind which Israel will further entrench its occupation, and continue to create ‘facts on the ground’ that foreclose any prospect for a two-state solution."
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