Analysts of American Middle East policy have long wondered about the existence of a “linkage” between the Iranian nuclear threat and the Israeli-Palestinian conflict.

At the United Nations General Assembly in September, US President Barack Obama said, “In the near term, America’s diplomatic efforts will focus on two particular issues: Iran’s pursuit of nuclear weapons, and the Arab-Israeli conflict.” The obvious juxtaposition of the two not-directly-related issues suggested the president sought to revive a venerable formula known in Hebrew as “Gar’in tmurat Falestin” — the nuclear issue in exchange for Palestine. Routinely rejected by American and Israeli officials, this often-quoted theory postulates that Washington is willing to be tough on Iran if Jerusalem is forthcoming on the Palestinian issue. But statements Obama made Saturday suggest the opposite is now the case.

Speaking at the Saban Forum in Washington, the president defended the interim nuclear deal the US and five world powers struck with Iran in November. While he declared that “nothing in this agreement… grants Iran a right to enrich” uranium, he also made plain that in a permanent agreement, Iran will be allowed to do exactly that.

“It is my strong belief that we can envision a end state that gives us an assurance that even if they have some modest enrichment capability, it is so constrained and the inspections are so intrusive that they, as a practical matter, do not have breakout capacity,” Obama said.

For Israel, this is an absolute no-no. Prime Minister Benjamin Netanyahu and his associates have said as much time and again. “It needs to be clear: In the final agreement Iran will not have the capability to create a nuclear weapon. To assure that, Iran must not have any capacity to enrich uranium or produce plutonium,” Intelligence and Strategic Affairs Minister Yuval Steinitz said later Saturday, in the Israeli government’s first response to Obama’s candid appearance at the Saban event.

The administration, while asserting that Israel’s security is sacrosanct, defends the temporary Geneva agreement -– a deal Israel considers a dangerous and “historic mistake” — and seems determined to reach a long-term arrangement that would essentially allow Iran to remain a threshold state, capable of a breakout to nuclear capability within a matter of months.

“Frankly, theoretically, they will always have some [breakout capacity],” Obama said, because “the technology here is available to any good physics student at pretty much any university around the world. And they have already gone through the cycle to the point where the knowledge, we’re not going to be able to eliminate.”

The Obama administration clearly is not inclined to give in to Israel’s demands vis-à-vis Iran, regarding as unrealistic Netanyahu’s insistence on the dismantling of Iran’s entire program. Said Obama to much laughter Saturday: “One can envision an ideal world in which Iran said, we’ll destroy every element and facility and you name it, it’s all gone. I can envision a world in which Congress passed every one of my bills that I put forward.”

But Washington does seem more willing to accommodate Jerusalem’s requirements regarding the peace negotiations with the Palestinians. To be sure, Obama and his indefatigable secretary of state, John Kerry, are exerting tremendous pressure on Netanyahu to reach an agreement. But recent statements from the two indicate that they respect two of Israel’s key demands: recognition by the Palestinians as a Jewish state and ironclad security arrangements, including an Israeli military presence in the Jordan Valley.

Obama endorsed Netanyahu’s demands that the Palestinians recognize Israel as the homeland of the Jewish people over a year ago. But on Saturday, he for the first time publicly indicated that even under a final status deal, Israeli troops will remain stationed on the territory of a future Palestinian state, at least for some time.

“Ultimately, the Palestinians have to also recognize that there is going to be a transition period where the Israeli people cannot expect a replica of Gaza in the West Bank. That is unacceptable,” Obama said, referring to the incessant rocket fire on Israeli towns that followed the 2005 disengagement from the Hamas-ruled coastal strip. Palestinian Authority President Mahmoud Abbas needs to be “willing to understand that this transition period requires some restraint on the part of the Palestinians as well,” Obama said. “They don’t get everything that they want on day one.”

Later on, when asked how Israel can be expected to sign a final status agreement when the PA is currently not in control of Gaza, Obama said that a peace deal would have “to happen in stages.” He reiterated his idea of a “transition period,” during which a deal will have been signed but not all details will have been worked out. “And the security requirements that Israel requires will have to be met.”

Speaking at the Saban Forum right after Obama, Kerry also said that Israel will have to be allowed to maintain a security presence on the territory of a future Palestinian state to secure Israel’s eastern border.

As much as Washington is pushing Jerusalem toward a peace deal with the Palestinians, the Americans seem to accept Israel’s security caveats vis-à-vis the Jordan Valley. They are less understanding when it comes to Netanyahu’s position on the Iranian threat. But while a final-status deal between the international community and Iran seems set to take shape over the coming months — a deal Israel will doubtless ferociously reject — a final-status deal with the Palestinians seems as elusive as ever.