Secretary of State Hillary Clinton stepped from the frying pan into the fire this weekend, when she sparked a controversy regarding U.S. policy toward Israeli settlements right after some tough days of public and private diplomacy in Pakistan. But was the controversy as serious as it seemed? And what does it means for the ongoing Israeli-Palestinian peace efforts? Here, a fact check on some settlement myths and misconceptions.

1. What is the significance of Clinton's linguistic acrobatics?

Standing next to Israeli Prime Minister Benjamin Netanyahu on Saturday night in Jerusalem, the secretary seemed unequivocally to line up with the Israeli leader in relation to the ongoing dispute over the settlements. Clinton described Israel's offer of a policy of settlement "restraint" (i.e., not freeze) as "unprecedented." Prime Minister Netanyahu looked pleased as punch as Clinton placed the dead cat firmly at the Palestinians' door.

By the time Clinton landed in Morocco for bilateral and regional meetings that included Arab leaders, it was clear that these statements had stirred quite an uproar and were being interpreted as a recalibration of U.S. policy towards Israeli settlements, or even a capitulation. In Cairo, in June, the president had been unequivocal, declaring "it is time for these settlements to stop." A week earlier, Clinton herself had explained the call for a stop to settlements as not being open to interpretation -- "not some settlements ... not natural growth."

Monday, Clinton rushed to correct the impression of a policy shift, delivering remarks with the Moroccan foreign minister at her side in which she described Israel's restraint policy as falling "far short" of America's position or preference. She also reiterated America's 40-year opposition to Israeli settlement policy and rejection of "the legitimacy of continued Israeli settlements" -- all things that she had failed to mention at the presser in Jerusalem. The Obama team's image of credibility and competence had taken a serious hit. The Arab League's Secretary General, Amr Moussa, went on record to say "failure is in the atmosphere ... all of us are deeply disappointed" and that "we're not impressed".

In a sense, Clinton's prevarications aren't hard to understand. Since September's U.N. General Assembly tri-lateral meeting, the administration has been trying to extricate itself from Netanyahu's blunt refusal to meet the U.S. demand for a settlement freeze. The Obama team chose not to escalate in the face of this rejectionism from its ally in Jerusalem. The U.S. message to both sides became: "Good Israeli progress on the settlements -- we expect more, but in the meantime, let's re-launch negotiations." Clinton was in effect reiterating that message with greater force during this trip -- and perhaps venting frustration at the Palestinians' lack of enthusiasm for this formula. However, that does not change the bottom line: The United States created an expectation for a settlement freeze, did not meet it, and is now paying a price of diminished standing in the region.

2. Was Clinton right in describing the Israeli concessions as "unprecedented"?

One of the more criticized aspects of Clinton's remarks was her repetition of Israel's policy of "restraint" toward settlement growth as "unprecedented" -- suggesting that the U.S. condoned that policy. Technically, yes, the policy is unprecedented -- Israel has not before publicly delineated a limited number of specific housing units (only those already under construction) beyond which it would not build in the West Bank.

In terms of substantive impact, use of the term "unprecedented" is on flimsier ground. The approximately 3,000 housing units that Israel will continue to build is par for the course for its annual settlement expansion. And of course, the exclusion of East Jerusalem renders the arrangement a nonstarter to the Palestinian and Arab side, since no two-state solution can be envisaged without a Palestinian capital in East Jerusalem.

The arrangement could, however, become genuinely unprecedented if the 3,000 units already under construction were explicitly acknowledged as the final settlement expansion of any kind, full stop. That may be the logic of the U.S. effort, but it has not yet been unequivocally articulated.

3. Should a settlement freeze be a precondition for negotiations?

The Palestinian leadership has been arguing that absent a settlement freeze, there is little point in resuming negotiations on a two-state solution. The original Oslo Agreement states that "Neither side shall initiate or take any step that will change the status of the West Bank and the Gaza Strip pending the outcome of the permanent status negotiations." This is a clause that the Palestinians have consistently referred to in claiming that settlement building is a violation of past signed agreements. Yet the Palestinians never before made such a stand on the issue. In Jerusalem on Saturday night, Netanyahu reiterated that, in the 16 years of previous negotiations since Oslo, a settlement freeze has never been an explicit precondition for talks -- and he was backed up by Clinton, who confirmed that "what the prime minister is saying is historically accurate." Netanyahu and Clinton were both right.

It is also worth noting that, contrary to much reporting, the Obama administration never made negotiations conditional on a settlement freeze. Rather, they argued that the freeze would be part of the actions needed to create an environment conducive to successful talks.

Nevertheless, the United States should view the current Palestinian insistence on a settlement freeze as a long overdue course correction. Had a settlement freeze been insisted upon when talks began in 1993, an agreement today would be dramatically more attainable. Back then, 111,000 Israelis resided in the West Bank alone, while today that number has surpassed 300,000. For most Palestinians, this belated insistence from their leadership is better late than never and perhaps the only way to revive any faith in the efficacy of a negotiated path to Palestinian freedom. For the PLO leadership, negotiating over an ever-shrinking territory has been an exercise in political self-emaciation. It is an exercise they can ill afford to continue, especially given the internal political challenge they now face from Hamas.

4. Do settlements really matter?

Yes, and then some. No single development during the peace process has done more to undermine Palestinian confidence in the possibility of the two-state solution. Likewise, nothing is as politically foreboding for an Israeli prime minister who is actually ready for a viable two-state deal than the awaiting confrontation with the settlers and their supporters.

Clinton seemed to be commending Netanyahu on a restraint policy that includes a commitment to "build no new settlements, expropriate no land." While this sounds like an impressive concession, the actual impact of this policy on the ground will be very limited.

Since Oslo began, Israel has considered it diplomatically impolite to officially create new settlements. Successive Israeli governments found convenient alternatives -- expanding existing communities, creating new suburbs of existing settlements (sometimes several kilometers from the original site), and most notably facilitating the establishment of over 100 new "outposts." The outposts are not formally authorized but they normally have the necessary infrastructure, water, electricity, and security needs provided by Israel's governing authorities and they are not removed -- settlements by another name.

Over 40 percent of the land of the West Bank is already within the municipal jurisdiction of the settlements, even though only about 2 percent is currently built up. So "no new land confiscation" is an empty and irrelevant gesture. For a full settlement freeze to really be meaningful, it would have to include a prohibition on advancing permits for planning and zoning of new settlements, and it would have to deal with the entirety of the settlement infrastructure. Netanyahu's jargon regarding the settlements needs translation -- and the translation is that such commitments are meaningless.

5. So, what's next?

The Obama administration still seems to be pushing the resumption of Israeli-Palestinian negotiations as the key goal. Under current circumstances, that would be a hard pill to swallow for Palestinian President Mahmoud Abbas, especially if Palestinian elections are on the horizon. But even if talks were restarted, many in the Middle East are struggling to see the point of yet more negotiations after all these years. The issues and their solutions are largely known, but the expectations that negotiations would deliver anything meaningful are nearly nonexistent. Another option for the U.S. would be to initiate back-to-back talks with the respective parties -- this approach may actually be more productive than bilateral talks between two parties who have proven that they cannot resolve this conflict on their own.

After all of my questions, it is worth recognizing the question that is actually being asked of America from the citizens of the Middle East themselves: When will there be a serious American implementation plan for a two-state solution that recognizes the asymmetries of power and vital needs of each party and that is determinedly pursued by an administration which has, from day one, made Israeli-Palestinian peace a strategic American priority? On this question, we are all still waiting for an answer.