The U.S. State Department on Tuesday punched a big hole in Israel-led efforts to induce the Obama administration to regard boycotts of settlements as identical to boycott of Israel proper. In doing so, it provided the Israeli government and the pro-Israel lobby with yet another painful lesson in the pitfalls of being too clever by half and biting off more than one should chew.

A special statement issued by the State Department Press Office on Tuesday afternoon made clear that while the administration “strongly opposes” any boycott, divestment or sanctions against the State of Israel, it does not extend the same protection to “Israel-controlled territories.” Rather than weakening efforts to boycott Jewish settlements in the occupied territories, as Israel supporters had planned, the State Department was actually granting them unprecedented legitimacy.

The statement came in the wake of President Obama’s signing of the Trade Promotion Authority bill, which grants him the authority he had sought to conclude the Trans-Pacific Partnership accord. But as the bill deals with free trade agreements in general, a clause was inserted in the Senate by Democratic Senator Ben Cardin and Republican Senator Rob Portman and by Representative Peter Roskam in the House of Representative that instructs American diplomats to include opposition to any boycott of Israel - or of persons from “territories controlled by Israel” - in their free trade negotiations with the European Union.

The State Department statement, however, makes clear that the bill will not change U.S. policy towards the settlements. “The U.S. government has never defended or supported Israeli settlements or activity associated with them, and, by extension, does not pursue policies or activities that would legitimize them,” it said. It went on to note: “Administrations of both parties have long recognized that settlement activity and efforts to change facts on the ground undermine the goal of a two-state solution.”

The defiant rebuff of the Congressional bill comes in the wake of the recent Supreme Court decision regarding Menachem Zivotofsky that rebuffed Congressional attempts to force the administration to record “Israel” next to his city of birth “Jerusalem.” The State Department statement says, in effect, that a bill on trade authority cannot force the administration to change its longstanding policy towards Israeli settlements in the occupied territories. And just as the Zivotofsky decision weakened Israel’s hold on Jerusalem, the boycott decision only delegitimizes the settlements more than ever before.

Thus, the effort to strengthen the settlements, supported by AIPAC and other mainstream and right-wing groups and opposed by J-Street and organizations on the left, actually ends up weakening them. The attempt to blot out the differences between a boycott of Israel and of the territories actually highlights them. The boycott of settlements, in effect, has now been officially stamped “kosher” by the State Department.