It's not the first time that Israel has stiffed Barack Obama over his attempts to kick-start Middle East peace negotiations. But the sudden, highly inflammatory announcement of plans to build an additional 1,600 homes in occupied East Jerusalem, in the midst of a visit to Israel of US vice-president Joe Biden, was certainly the most brutally contemptuous rebuff so far to American peacemaking.

It may be that Binyamin Netanyahu, Israel's rightwing prime minister, was unaware in advance of the provisional decision by a Jerusalem district planning committee, as he claims. But the announcement was promulgated by his interior ministry, which thereby gave it an official stamp of approval. If Netanyahu did not know, then why not?

Despite the evident embarrassment and considerable political damage caused by the decision, Netanyahu has so far made no move to repudiate it. Lesser figures, such as welfare minister Isaac Herzog and Israeli government spokesman Mark Regev were deployed on firefighting duties on Wednesday, dutifully uttering conditional words of contrition. "We have to express our apologies for this serious blunder," Herzog said.

But protestations of innocence by interior minister Eli Yishai, head of the Shas religious party in Netanyahu's coalition and no great advocate of American attempts to forge a two-state peace settlement with the Palestinians, are hard to credit.

"There was certainly no intention to provoke anyone, and certainly not to come along and hurt the vice-president of the United States," Yishai said.

These are weasel words. Is it to be believed that Yishai, like Netanyahu, was unaware of what his own ministry was doing? Did he have no idea the planning decision was pending? Did he, as an experienced politician, not foresee the destructive political implications of this ambush? Like Netanyahu, Yishai presumably regards Jerusalem as Israel's eternal and indivisible capital. Another day on, it seems he was determined to rub Biden's nose in that insupportable idea.

The Americans, until now, have been too polite, or too weak, to say it, but Netanyahu spent most last year deliberately frustrating Obama's pledge to mediate a resolution of the Israel-Palestine conflict and with it, an end to the Israel-Arab confrontation that has scarred the region for generations. Netanyahu resisted direct talks, rejected a full settlement freeze, flaunted his uncompromising views on Jerusalem, pooh-poohed a Syria opening, and, at the same time, endlessly reiterated his supposed willingness to talk to the Palestinians "without conditions".

Simultaneously, Israel's leader tried, with some success, to shift the US conversation on to Iran, which he says poses an existential threat to his country and the region. All in all, it was an Oscar-standard performance in obfuscation, prevarication and disingenuousness. To the achingly smart, but politically less pugnacious Obama, Netanyahu's behaviour was intellectually insulting. The fact he has put up with it until now may be a measure of Israel's clout in Washington, especially on Capitol Hill.

This could change. Obama's problem, and not just in the Middle East, is that he is liked but not feared. After a first year in office devoid of substantive achievement, Washington insiders say the president must show he is ready to fight, to get down and dirty, to drop his professorial aloofness and get publicly passionate and angry about the things he believes in. At home, this could apply to healthcare reform. Abroad, the new approach may single out Israel-Palestine.

Biden's visit, though reassuring and conciliatory on the surface until the east Jerusalem bombshell dropped, may mark the start of this tougher approach. Many Obama supporters in the US and Europe, and in the post-Cairo Muslim world, will wish it so. The vice-president, whose attack dog qualities were unleashed on the subjects of Russia and Ukraine last year, certainly did not mince his words, once he realised the extent of the insult.

"I condemn the decision by the government of Israel to advance planning for new housing units in east Jerusalem," Biden said. "The announcement ... is precisely the kind of step that undermines the trust we need right now and runs counter to the constructive discussions that I've had here in Israel." In the last part of this sentence Biden seems to be suggesting that Netanyahu told him one thing to his face and did another behind his back. Little wonder he kept Israel's first couple waiting for dinner.

It doesn't seem to realise it, but Israel cannot afford to keep on behaving in this disobliging manner towards its friends. Whether it is blatant disregard for international rules concerning the protection of civilian life, as in Gaza; whether it is calculated insults aimed at neighbours, as with Turkey; or whether it is the theft of passports and identities from friendly countries and the lawless assassination of its enemies, as in Dubai, it goes too far.

Now, Netanyahu has deeply angered his country's best and most powerful friend – again. The coming message to Bibi: don't over-reach.

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