White House Chief of Staff Denis McDonough made it clear Monday that the crisis in U.S.-Israeli relations over the issue of a Palestinian state has not dissipated, despite efforts by Prime Minister Benjamin Netanyahu to clarify remarks he made late in the election campaign that no such state would be established on his watch.

“We cannot simply pretend that those comments were never made,” McDonough told the J Street conference in Washington, whose leftist audience received his remarks enthusiastically.

He also warned Israel’s next government not to consider unilateral annexation of any West Bank territory, saying it would “be both wrong and illegal,” and that America would strenuously object.

“Israel cannot maintain military control of another people indefinitely,” he said. “An occupation that has lasted for almost 50 years must end.” He denied claims that the administration’s reevaluation of its approach to the peace process stemmed from U.S. President Barack Obama’s “personal pique” with Netanyahu, but he described Netanyahu’s remarks before the election as “troubling.”

McDonough called into question Netanyahu’s sincerity regarding the two-state solution.

“After the election, the prime minister said that he had not changed his position, but for many in Israel and in the international community, such contradictory comments call into question his commitment to a two-state solution, as did his suggestion that the construction of settlements has a strategic purpose of dividing Palestinian communities and his claim that conditions in the larger Middle East must be more stable before a Palestinian state can be established,” he said. “We cannot simply pretend that those comments were never made, or that they don’t raise questions about the prime minister’s commitment to achieving peace through direct negotiations.”

McDonough did not address the possibility that the focus of the peace process would move to the United Nations – which may indicate a softening of that position compared to what was said immediately after last week’s election results became known - but said that Obama would “never stop working for a two-state solution,” despite the difficulties. He also detailed what the U.S. believes the arrangements would be: borders based on the 1967 lines with mutually agreed swaps, security arrangements, and a “sovereign and sustainable” Palestinian state.

In what seems like wishful thinking given the presumed makeup of the next government, McDonough said the United States expects it to “to match words with actions and policies that demonstrate a genuine commitment to a two-state solution.” In an unusual move, McDonough also warned against any unilateral annexation of lands in the West Bank, saying it “would be both wrong and illegal,” that America would never support it, “and it’s unlikely Israel’s other friends would either. It would only contribute to Israel’s isolation.”

McDonough also described J Street, which is ostracized by much of the American Jewish establishment, as the White House’s “partner” in advancing the peace process and the two-state solution.