The Obama Administration on Sunday did what Israelis have long feared and pleaded with the US to avoid when White House Chief of Staff Rahm Emanuel linked the resolution of the Iran nuclear crisis to the creation of a Palestinian state.

Speaking at the annual Washington conference of the American-Israel Public Affairs Committee (AIPAC), Ynet quoted Emanuel as insisting that the ability to confront Iran and reach a diplomatic solution over its defiant nuclear program was solely dependent on progress toward the birth of "Palestine."

Emanuel said that with Israeli Prime Minister Benjamin Netanyahu scheduled to meet with US President Barack Obama later this month, Israel now faces a moment of truth - it can either acquiesce to international demands and in return have its most serious threats dealt with, or maintain the status quo and have those threats persist.

In its main conference event on Tuesday, AIPAC is scheduled to present the congressmen representing its thousands of members from across the country with a letter urging Obama to take strong action toward the creation of a "viable Palestinian state."

A majority of the congressmen are expected to sign the letter and pass it on to the president.

While the US government and AIPAC have long advocated for the "two-state solution," the focus on that goal seems to be more pronounced since the election of Netanyahu, who has refused to publicly commit to the establishment of a sovereign Palestinian Arab state.

Netanyahu insists that the world must take into account the example of the Gaza Strip, which was fully surrendered to the Palestinians, only to become the first territory officially ruled by a recognized terrorist organization and a launching pad for regular attacks on Israel.

Instead of rush into handing the Palestinians sovereignty over any other parcels of land, Netanyahu stated during his election campaign that he wants to boost the Palestinian economy and remove the Palestinians' chief justification for terror - their poor living conditions.