Many parts of the barrier has been moved back because of the Israeli Supreme Court decision.
As for the US not condemning it, you need to check your facts a little bit better. We did not vote for the UN resolution, which was incredibly lopsided, but we have condemned the construction of the wall and further settlements in the West Bank.
"I think the wall is a problem, and I discussed this with Ariel Sharon. It is very difficult to develop confidence between the Palestinians and the Israel -- Israel -- with a wall snaking through the West Bank. "
http://www.whitehouse.gov/news/releases/2003/07/20030725-6.html
"Therefore, Israel must remove unauthorized outposts and stop settlement expansion. The barrier being erected by Israel as a part of its security effort must be a security, rather than political, barrier. And its route should take into account, consistent with security needs, its impact on Palestinians not engaged in terrorist activities."
http://www.whitehouse.gov/news/releases/2005/05/20050526.html
Both are quotes from President Bush.
I wouldn't say that's a condemnation and if it was, it was a soft slap.
Saying that it's wrong and they should tear it down, that's one thing. Saying it should be used for security, not political is another.