Where does U.S. support for Israel's governments stop?

I am not an expert on the Israel-Palestine conflict, and I have consequently refrained from commenting on it until now. An article in the New York Times has broken that resolve. It reveals that there were discussions between the governments of Israel and the United States about Israeli settlements in the occupied territories as part of the process leading to "the roadmap" -- discussions which have not been made public. Apparently (unnamed) officials of the Netanyahu administration in Israel are holding that the Bush administration agreed to continuation of settlements in the West Bank as part of the deal for removal of the settlements in Gaza; (unnamed) former members of the Bush administration are holding that while the discussions took place in the context of natural growth of the West Bank settlements, they never reached a clear agreement as to what was acceptable.

The Israeli policies in the occupied territories seem to be the result of compromises made by factions of the Israeli political process. Surely there is a significant portion of the Israeli population which wishes to take and hold all the West Bank, while other factions are more than willing to give up land for peace.

Apparently every U.S. administration since the Nixon administration has opposed further settlements, and the Israeli government has allowed further settlements in each of those administrations. Now there is a large Israeli population in East Jerusalem and the West Bank as well as a complex infrastructure to keep them out of harms way. The Israeli settlements and their security apparatus not only makes life difficult to Palestinians, but helps convince many of them that Israel will only be satisfied when they are driven out of their lands or deprived of any hope of political autonomy.

The Unites States greatly values its alliance with Israel, and has provided Israel with huge amounts of military and economic assistance. It has continued to do so over decades in which the Israeli government was ignoring our concerns that the settlements stop growing and more progress be made towards peace.

At what point do we separate our support for Israel from support for whichever party is in power in Israel at the moment. At what point does this country begin to flex the power that Israeli dependency on U.S. aid and trade provides to encourage Israeli government policies that we believe will lead to peace and to discourage Israeli government policies that appear to worsen the prospects for peace?

I don't know the answer to that question, but I suspect and hope it is being seriously debated within the Obama administration.