If international law matters to any American president, it ought to be President Obama who has taught constitutional law.

Israel's supporters are wrong to downplay the significance of illegal settlement activity as innocuous building in "Jewish neighborhoods" of Jerusalem. Contrary to Prime Minister Netanyahu's claim that "building in Jerusalem is the same as building in Tel Aviv," according to international law and longstanding U.S. policy, building in East Jerusalem is the same as building in Jenin - or any other city in the occupied West Bank.

Despite all its remonstrating, Israel stands isolated from the entire international community over occupied East Jerusalem. Israel has no legitimate sovereignty on any inch of land beyond the Green Line, regardless of what they call it. As one European foreign minister recently stated: "I think I can say very clearly that Jerusalem is not Tel Aviv." Legally speaking, this rebuke to Netanyahu's bluster is correct, and the U.S. knows it.

Those who watch this conflict closely know that Israeli settlement expansion in Jerusalem has the potential to destroy the two-state solution and precipitate a third intifada. It is no minor matter. Nor was the timing of the announcements of 1600 new Jewish homes in the settlement of Ramat Shlomo during the visit of Vice President Biden, or of 20 more units for a site owned by an American funder of Netanyahu just hours before the prime minister was to meet with Obama.

Netanyahu rejected U.S. calls to halt settlement expansion and his Interior Minister, Eli Yishai -- the same man who started the fracas when Biden visited -- also seems determined to continue flouting the Obama administration.

Undeterred, unrepentant, and still in his job, Yishai declared more than two weeks after the initial incident: "I thank God I have been given the opportunity to be the minister who approves the construction of thousands of housing units in Jerusalem."

And when Secretary of State Hillary Clinton voiced the concern of the Obama administration, MK Danny Danon of Netanyahu's Likud party said her "meddling in internal Israeli decisions regarding the development of our capital, Jerusalem, is uninvited and unhelpful." American organizations such as AIPAC and the ADL then urged the Obama administration to hush while expressing no public dismay at Danon's tongue-lashing of the American secretary of state.

Could you imagine what would happen today if the United States annexed Mexico down to Mexico City, claimed it as part of Texas, then began building US cities there and preventing Mexicans from entering?

Obviously, the rest of the world would not accept the annexation of land through conquest for the United States or any state -- even Israel.

But Jerusalem is not only a flash point because of Israel's ongoing colonization through settlement expansion; this transcends the territorial dimension. Jerusalem is a symbolic city dear to Muslims, Christians and Jews. And as the economic and cultural center of Palestinian life for centuries, it is the only city that could be the capital of a Palestinian state. Likewise, no viable Palestinian state could emerge without East Jerusalem as its capital.

That's why other Israeli provocations in Jerusalem are equally damaging to the diplomatic process and stability in the region. The ongoing de-Arabization of Jerusalem which has accelerated in recent years, demands the immediate attention of all those interested in a just solution to this conflict. From eviction and demolition of Palestinian homes in Jerusalem, to the revocation of residencies and a complex matrix of walls and checkpoints, Israeli policies are slowly sapping Jerusalem of its Palestinian population.

In the Arab and Muslim world, this process playing out daily on the television screens of onlookers is interpreted as nothing short of a colonialist enterprise. (To see a video that explains Israels increasing grip on Jerusalem click here for a flash version and here for a YouTube version.)

While some Israeli spokespersons may claim that there is no need to fuss over building a few houses, the reality is that the Palestinians and others in the Middle East have been watching an ongoing and alarming trend in Jerusalem for decades. Major settlements like Har Homa, Gilo, Ramat Shlomo, Ma'ale Addumim and others, which were developed under the Israeli guise of building in Jerusalem "just like Tel Aviv," have created insurmountable obstacles to sharing Jerusalem between both peoples. The policies of removing or forcing out Palestinians from Jerusalem reinforce the notion that Israel has no intention of returning the land it occupies.

Without Jerusalem on the table, Palestinians not only lack incentive to negotiate, they lack any incentive to maintain the two-state framework.

Jerusalem tumult has the potential to send shockwaves through the Middle East and the broader Muslim world where the United States has far more important interests than the troublemaking state of Israel.