Michael B. Oren, writing for OpinionJournal.com:

OpinionJournal - Featured Article - Don't Hold Israel Back

Since its creation in 1948, Israel has been the target of Arab terror. In the 1950s and '60s, "armed infiltration," as it was then called, caused hundreds of casualties and made life on Israeli streets and border settlements nearly as precarious as it is today. Yet, in spite of these losses and Israel's clear-cut case for avenging them, the U.S. denied Israel's right to retaliate. "The USG has consistently opposed reprisal raids," Secretary of State John Foster Dulles wrote in March 1955. "Such raids dangerously heighten existing tensions." Similarly, in November 1966, Dean Rusk declared, "We have said frequently that we cannot agree to or condone [Israeli] retaliatory action."

The rationale behind this policy was not so much moral as it was economic and strategic. American leaders claimed that Israeli reprisals could interrupt the flow of Arab oil to the West, while driving moderate Arab states into Soviet--later, Islamic radical--arms. There was also the belief, ultimately belied by Jordan's King Hussein, that an Arab defeated by Israel is an Arab less willing to make peace.

None of these scenarios ever transpired, however, and, rather than peace, America's policy helped produce the very wars it sought to preclude. The terrorists learned that Jews could be killed with impunity, while frustrated Israeli leaders concluded that if they were going to be condemned for minor retaliations, they might as well respond massively.