The Obama administration is looking into the possibility of taking action against the construction of Israeli settlements in the West Bank and East Jerusalem, as opposed to its more routine policy of issuing statements of denunciation.

According to senior Israeli officials, a classified discussion was held among White House officials several weeks ago about the possibility of taking active measures against the settlements.

As noted by Barak Ravid of Ha’aretz in an exclusive report, it is extremely unusual for the White House to hold a discussion on an issue of such political sensitivity, and it demonstrates the extent to which relations between the Obama administration and Netanyahu government have deteriorated.

While in recent years European countries have imposed ever-greater sanctions against the construction in the settlements, the United States has gone no further than denunciations of such activity.

An Israeli official with close knowledge of the issue said the administration began discussing the unprecedented new steps following Prime Minister Benjamin Netanyahu’s last meeting in the White House in early October and the public confrontation over the settlements that subsequently took place.

Just one day before Netanyahu’s visit to the White House, settlers moved into seven houses they had purchased in the Palestinian village of Silwan in East Jerusalem. Several hours before the meeting, word came that the Jerusalem municipality had fully approved the construction of 2,600 housing units in Givat Hamatos, a neighborhood beyond the Green Line in Jerusalem.

Almost immediately after Netanyahu and Obama had concluded their meeting, White House spokesman Josh Earnest rebuked Israel in an exceptionally harsh statement. He asserted that the Israeli moves “poison the atmosphere” and distance Israel from “even its closest allies.”

Brushing off the White House rebuke, the Israeli prime minister responded that the criticism goes “against American values.” Netanyahu’s comment raised the anger in the White House.

The failure of the meeting between the two heads of state and the administration’s escalating anger over the settlement construction led to the sense that statements of denunciation were not having the desired effect. The White House was thus prompted to re-examine its policy and weigh harsher measures in response to the construction.

The unprecedented discussion was attended by senior White House and State Department officials who work on the Israeli-Palestinian issue. Among the potential steps that were purportedly discussed, the U.S. may decline to veto condemnatory resolutions against the settlements in the United Nations Security Council. Or it might issue more explicit instructions to American officials about the ban on cooperating with the settlements or funding activity in them.

It remains to be seen how the decision to hold early elections in Israel will affect the White House’s decisions regarding the settlements. In one relevant consideration, the United States government is looking into whether American action against the settlements at this point would weaken Netanyahu in Israeli public opinion, or perhaps have just the opposite effect, by portraying him as a leader who does not submit to international pressure.