WASHINGTON -- Senior Obama administration officials said Israeli Prime Minister Benjamin Netanyahu's decision to abandon a two-state solution, which he had formally endorsed in 2009, injects a new and unwelcome reality in the pursuit of peace between Israelis and Palestinians.
Netanyahu's new position, which he declared in the final days of a fiercely fought reelection campaign, could even prompt significant changes in U.S. policy.
The officials said President Obama has instructed top advisers to pursue alternatives to the long-standing policy of allowing Israel and the Palestinians to pursue a two-state solution through face-to-face negotiations.
One possibility is that the administration could endorse -- or simply not object to -- international moves to recognize a Palestinian state.
The "likely outcome" of the policy review, officials said, could be the administration's acceptance of a United Nations Security Council resolution recognizing a Palestinian state.
In the past, the White House collaborated with Israel to block such a resolution. But White House frustration over Netanyahu's decision to walk away from a two-state solution and his continued construction of Jewish settlements in the West Bank have led Obama officials to reconsider their options.
European governments have been especially critical of new Israeli settlements, and the White House has found it increasingly difficult to mute that criticism or short-circuit Security Council consideration of recognizing a Palestinian state.
It has generally succeeded on both fronts, but pressure has been building, and Netanyahu's abandonment of the idea of Palestinian statehood have made the stasis more difficult to sustain.
In the heat of his re-election campaign, Netanyahu said there would be no Palestinian state if he was re-elected.
While it's possible he could soften that position once he forms a coalition government, White House officials are doubtful. They anticipate Netanyahu will build the foundation of his new government with support from right-wing parties and other factions supportive of new Jewish settlements and hostile to a Palestinian state.
"We have constantly argued against so-called short cuts to a Palestinian state," said one top official. "We defended that by saying the Israel and the Palestinians were committed to a two-state solution. Now, that is much harder to defend. This screws up the peace process."
President Obama will telephone Netanyahu in the coming days to offer his congratulations on his victory, while administration officials closely monitor his efforts to build a coalition government.