Our policy is simple. The Israelis have lied to us all the time in the past years, but this is over now.
While this may come as a surprise to Americans who have spent the last 30 years at the mall, every graduate student in political science, even in the U.S., has known this all along. Nevertheless, Mitchell demonstrated real political courage in saying it. (It's so nice not to be running for election...)
That said, it is a curious remark. First, it is of course not a policy; it is a statement. Second, the poor Israeli right wing political elite (there no longer is a left wing or even moderate political elite in Israel) only did so because Washington very clearly wanted them to. Just goes to show that an immoral policy eventually is likely to backfire (although it is enormously rewarding over the short term).
So, assuming the reports are correct and Mitchell really did say this, what it really means is that Washington is through deluding itself. Now that is news.