US could threaten Israel with Sanctions(?!)

So reported in YNet, as well as Fox News. 

US special envoy George Mitchell has, according to Ynet, threatened Israel that its failure to advance peace negotiations could result in financial sanctions. The diplomat made the veiled threat during an interview for PBS, but quickly clarified that the US would use sanctions and incentives with both Israelis and Palestinians.

Obviously, this bears watching, especially to see how Obama and Hillary Clinton respond to requests for clarification.  Might make for a field-day on the Sunday talk shows.