There’s also a tension between the top two objectives. The tougher the US is on Iran, the more leverage it has pushing Israel toward concessions on the Palestinians. The more risks the administration takes and concessions it makes to get a deal with Iran, the tighter the Israelis are tempted to circle the wagons. Pursuing both objectives simultaneously risks a car crash, but then the Middle East is littered with wrecked cars from this and past administrations.
As Drezner notes, the tension between the two is more apparent than real for the simple reason that the Israeli-Palestinian conflict is not truly an administration priority, but it has been included anyway as a sop to Kerry. That’s probably right. My guess is that it’s included on the list of goals mainly because this issue is always tacked on to every administration’s list of goals in the region, and including it is now required no matter how much effort the administration is willing to put into it. It is being presented as a “top priority” because that is the treatment this issue is expected to receive, but it will end up being relegated to the sidelines as it has been for most of the last four years.
I question the assumption that a “tougher” U.S. position on Iran would yield any greater leverage over Israel on Palestine. It’s not as if a harder U.S. line on Iran would make an Israeli government more interested in making concessions to Palestinians. Hard-liners hostile to the idea of diplomatic solutions to long-running disputes are not likely to be convinced of the desirability of making concessions to anyone. The U.S. could try to use what leverage it already has to extract those concessions even without being “tougher” on Iran, but it won’t, so how “tough” the U.S. ends up being on Iran won’t make any difference. It is possible that some Iran hawks could hint at the possibility of progress on the “peace process” as a way to get the U.S. to take a “tougher” position on Iran, but that would just be a way to lure the U.S. into pursuing an even more aggressive approach. Something else to bear in mind is that Iran hawks in the U.S. and Israel are never satisfied with U.S. Iran policy, and they always want it to be “tougher” than it is. As far as these hawks are concerned, U.S. Iran policy will never be “tough” enough to justify Israeli concessions on any other issue.