November reviewed

Israeli-Palestinian stalemate; WikiLeaks doesn’t help

So this is what all the high hopes and fine words of Friday, 20 August – the launch of the long-delayed direct face-to-face peace talks between Israel and the Palestinian Authority – have come to: an apparent stalemate, each side locked into its own rigid demand-led stance, and each unable to initiate a move that could unfreeze the situation.

“Apparent stalemate” it still – just – remains, for in the wings waits a much-trumpeted, but as yet undisclosed, agreement between the US and Israel aimed at providing a formula designed to enable the peace negotiations to resume. However, given what has emerged about this agreement, the prospects for it achieving its objective seem slim.

It seems that the US is prepared to offer Israel a number of tempting incentives in return for a 90-day building freeze in the West Bank settlements – which is part (but part only) of the Palestinians’ demands for agreeing to resume the peace talks. The package is rumoured to include the US using its veto power in the UN against any unilateral declaration of a Palestinian state, and eventually to providing Israel with 20 additional F-35 Joint Strike fighter jets worth some $3 billion.

The problem is that Palestinian President Mahmoud Abbas is demanding a total freeze on construction not only in the settlements, but also in east Jerusalem – and this, as he himself knows full well – is a step too far for any Israeli government even to contemplate as a formal concession. Informally, a temporary building cessation would indeed have been a feasible option, but Abbas and his spokesmen have ruled out any such “gentleman’s agreement” by publicly reiterating the full demand time and again.

Whether US diplomacy can eventually broker an agreement between the two sides, based on a new 90-day Israeli construction freeze that is confined to the West Bank, is one of the imponderables that bedevil the current situation. Another that emerged early in November is the odd, but apparently serious, possibility reported by the London-based newspaper Al-Sharq al-Awsat on 29 October. Israel, the paper reported, in its secret negotiations with the American administration aimed at clarifying the nature and demarcation of a Palestinian state, has been discussing the option of Israel leasing land in east Jerusalem and the Jordan Valley from the Palestinian state for up to 99 years. Britain’s 99-year lease of Hong Kong from China in 1898 provides a precedent. Palestinian sources apparently confirmed the story.

According to one of the sources, the initiative, which he said was "American, not Israeli," has been on the table for a while now "in order to reach common ground with the Israeli side regarding the borders issue and to reach an agreement on what will remain under Israeli sovereignty." Officials in Washington refused to confirm or deny the report.

A further imponderable is how effective the current pressures on Mahmoud Abbas, aimed at stiffening his rejectionist stance, are likely to be. He is pressurised not only by the obvious suspects – Hamas, his implacable brother-Palestinian rivals in Gaza, Hezbollah in Lebanon, and the leaders of the peace rejectionist axis, Iran and Syria, their puppet-masters. He is under further pressure from within his own camp, Fatah.

The Fatah Revolutionary Council concluded its fifth convention in Ramallah on 27 November by declaring its refusal to recognize Israel as a Jewish state – not in itself an insuperable obstacle to a renewal of the peace talks, for that concession is one of many that are likely to be made on both sides if or when an accord is reached. As for the putative US-Israeli agreement, the council dismissed plans to supply Israel with weapons in return for reviving the stalled peace talks, adding that the Palestinians would not accept any understandings between Israel and the US which could “harm Palestinian rights and prolong occupation.”

The Fatah leaders said they supported President Mahmoud Abbas’s policies, especially regarding the peace process with Israel. “The council salutes President Mahmoud Abbas for adhering to basic rights, first and foremost the right of return for Palestinian refugees. Also, the council salutes President Abbas for standing up against pressure aimed at resuming the peace talks without achieving Palestinian demands.”

Abbas told the Fatah leaders during the three-day gathering that the Palestinians want a just and comprehensive peace, but would not compromise on their rights. He also once again ruled out the possibility of returning to the negotiating table without a full cessation of construction in settlements and east Jerusalem. The plain fact of the matter is that if Abbas indeed sticks to the east Jerusalem leg of this demand, the chances of such a return are – short of the US pulling a rabbit out of the diplomatic bag – negligible. On the other hand if he gives way on this point, his street cred among his supporters would be severely dented, while the chorus of condemnation from his critics can only be imagined.

The fact of the matter is that Abbas has boxed himself – or been boxed by Washington’s rhetoric – into a corner from which it seems well-nigh impossible to escape. For it was President Obama, backed by his Secretary of State Hillary Clinton, who for a long time insisted that US policy favoured a complete cessation of construction in both the West Bank and east Jerusalem. Finally recognising the political imperatives of the situation facing Israeli prime minister Netanyahu, they may well have backed away from that position, but for Abbas – who took his lead from them – it may be too late. The US are capable of effecting a graceful retreat; Abbas seems stuck with his own unyielding demands.

And then, on Sunday 28 November, came the latest revelations from the internet site WikiLeaks – hundreds of thousands of confidential diplomatic cables that have passed between the United States and its allies. Out of the more than 250,000 documents, one of them claimed that Israel tried to coordinate Operation Cast Lead with both Fatah and Egypt.

The following day a top aide to Mahmoud Abbas said, perhaps choosing his words with particular care: “There were never any actual consultations between us and the Israelis before the Gaza war.” Perhaps the consultations were “virtual” rather than “actual”, but however one chooses to describe them, in a June 2009 meeting between Israel’s Defense Minister Ehud Barak and a US congressional delegation, Barak claimed that the Israeli government "had consulted with Egypt and Fatah prior to Operation Cast Lead, asking if they were willing to assume control of Gaza once Israel defeated Hamas."

"Not surprisingly," Barak said in the meeting, Israel "received negative answers from both."

Equally unsurprisingly is the fact that Hamas has seized the opportunity to score brownie points against its arch-rivals Fatah. Hamas spokesman Sami Abu Zuhri said he wasn't surprised to learn of Fatah cooperation with Israel. "We have said several times that Fatah was implicated in this war, and that they wanted to return to Gaza on the back of Israeli tanks.”

In fact the leaked telegram revealed more than a one-off contact between Israel, Fatah and Egypt on the subject of Gaza. According to the document, the defense minister had also "stressed the importance of continued consultations with both Egypt and Fatah," over the reconstruction of Gaza.

Incidentally, Hamas and Fatah have held several rounds of reconciliation talks since Hamas took over the Gaza Strip in 2007. Earlier this month the two groups failed yet again to reconcile major differences between them on security issues, and ended their latest round of talks without setting a date for the next round.

If the WikiLeaks documents in general do anything, they reinforce – albeit with embarrassingly frank comments never intended for public consumption – previously known, or suspected, circumstances. That the “moderate” Arab gulf states were viscerally opposed to Iran’s pretensions to moral leadership of the Middle East, and mightily fearful of the possibility of Iran obtaining nuclear weaponry, was well known. That Israel has long conducted negotiations on a realpolitik basis with Egypt, the Palestinian Authority and Jordan, inter alia, was also no secret. Another Wikileaks document, recording the views of Israel’s top diplomats in Ankara of Turkey's prime minister, should also come as no surprise. They see him as a religious "fundamentalist" committed to spreading hatred against Israel. The dispatch by the U.S. Ambassador to Turkey, James Jeffrey, details a conversation with his Israeli counterpart, Ambassador Gaby Levy, and points to a shared assessment of Recep Tayyip Erdogan as a demagogue whose policies are fuelled by "hatred" rather than political calculations.

All of which adds a certain spice to the Middle East pudding, but advances its cooking time by not an instant.

Israel’s referendum

Yesterday (Monday, 22 November) Israel’s parliament, the Knesset, by a vote of 65-33, passed into law an Act unique in the nation’s history. In future, any proposal to withdraw from Israeli territory would have to be approved by a two-thirds majority in the legislature. In the event that this was impossible, a national referendum would be mandatory. The law will take effect immediately.

Because the law applies only to sovereign Israeli territory, no referendum would be needed to withdraw from any part of the West Bank. However, should the Knesset not approve by a two-thirds majority, a referendum would be required for a pullout from east Jerusalem or the Golan Heights, as both have been annexed by Israel. It would also be required if, under a future deal with the Palestinians, Israel ceded land within the pre-1967 lines in exchange for keeping the settlement blocs.

In all its 62-year history, Israel has never held a national referendum. Israeli political analyst Yossi Alpher says: "In effect it weakens the authority of the Knesset to decide these issues, and turns it over to a system that has never been tried in Israel. It is clearly intended to make it more difficult to approve withdrawal from these territories.”

The bill was originally sponsored by Likud MKs, and prime minister Benjamin Netanyahu spoke in favour: "A referendum will prevent an irresponsible agreement, but at the same time will allow any agreement that satisfies Israel's national interests to pass with strong public backing." He was convinced, he added, that any agreement he submitted to the Knesset would indeed enjoy such backing.

Opposition leader Tzipi Livni said it was a sign of "weak leadership," and her Kadima party voted overwhelmingly against the bill.

Saeb Erekat, the chief Palestinian negotiator, was highly critical of the new law. "The Israeli leadership, yet again, is making a mockery of international law, which is not subject to the whims of Israeli public opinion. Under international law there is a clear and absolute obligation on Israel to withdraw not only from east Jerusalem and the Golan Heights, but from all of the territories that it has occupied since 1967. Ending the occupation of our land is not and cannot be dependent on any sort of referendum."

Erekat’s view, while understandable, takes no account of the political realities. As Israel’s previous withdrawals from occupied territory – notably the Sinai peninsula and the Gaza strip – have shown, when it comes down to evacuating settlements, the government needs the utmost determination in imposing its will against often implacable opposition from its own citizens. But these earlier examples could be as nothing compared with the situation that could develop, if it came to forcible evacuations from West Bank settlements.

Imagine a situation in which an Israeli government has concluded a draft peace agreement with the Palestinian Authority involving the swapping of Israeli territory in exchange for retaining some West Bank settlements but evacuating others, and is unable to command a majority for that action in the Knesset. In such circumstances, a national referendum could provide it with enhanced legitimacy for taking the necessary action. Settlers determined to combat government efforts to evacuate them would have a far weaker case if government action were backed by a majority of the nation.

All the same, should the parliamentary vote fail, going to the Israeli public would undoubtedly be something of a gamble.

Although polls of public opinion are notoriously unreliable indicators of a nation’s mood, and indeed public opinion itself is notoriously fickle, columnist Akiva Eldar, writing recently in Israel’s Ha'aretz newspaper may be correct when he says: "Israel has gone back to having a majority of people who view peace as a dangerous trap that the Arabs are laying at the feet of weak politicians."

For example, polls tend to show most Israelis oppose ceding the Old City of Jerusalem, where Judaism's holiest site – the Western Wall – sits virtually cheek-by-jowl with the Al-Aqsa mosque, the third-holiest site in Islam, and both are within hailing distance of Christianity’s revered Church of the Holy Sepulchre. But a comprehensive peace accord could undoubtedly incorporate a formula, reasonably satisfactory to Israelis, Palestinians and other concerned parties such as the various Christian sects currently administering their holy sites. Winning a “yes” vote in a national referendum would, in short, be dependent on the nature of the agreement for which the government was seeking endorsement, and also on how convincingly the government was able to make its case.

The law received more than 61 votes, meaning it was passed by an absolute majority of the 120-member Knesset. This will make it harder for anyone to seek to overturn it through the High Court of Justice, because it will eliminate the argument that the Act was passed with insufficient support for such fundamental, quasi-constitutional legislation. Nevertheless Yariv Oppenheimer, secretary general of Peace Now, said yesterday that his organization will consider petitioning the High Court against it.

Knesset House Committee chairman Yariv Levin, of the Likud party, whose panel prepared the law, told the plenum before the vote that it "reflects the need to ensure that fateful, irreversible decisions about conceding parts of the homeland to which Israeli sovereignty have been applied" will not be made via dubious political horse trading ("as has happened in the past," he added). Instead it will reflect the will of the people, either by way of a genuine two-thirds majority in the Knesset, or failing that, by a referendum of the nation as a whole. As such, he said, the law will promote national unity, because even opponents will not be able to argue - as they have in the past - that the Knesset's decision was not actually supported by a majority of the public.

And that, in the final analysis, is the nub of the case in its favour. The question is, with the peace process apparently irretrievably log-jammed, will even the prospect of a national referendum ever arise?

Israel-Palestine peace talks: lost in a maze

Barely five weeks after the renewal of direct face-to-face peace talks between Israelis and Palestinians, the process came to an untimely – albeit foreseeable – halt. The stumbling block? The end of the temporary 10-month freeze on building in Israel’s West Bank settlements, instituted by prime minister Netanyahu in November 2009. As 26 September, the pre-determined date, approached, Palestinian President Mahmoud Abbas began to demand that the moratorium on construction should be renewed, not only in West Bank settlements, but also in East Jerusalem.

Netanyahu’s coalition government is dependent on the continued support of members of political parties more right-wing in their views than his own Likud – in particular, Yisrael Beiteinu. Even so, most Likud ministers supported the resumption of West Bank building when the freeze ended, and many from other parties were adamantly opposed to any renewal of the moratorium. Despite this, Netanyahu managed to get majority support in his Cabinet to offer the Palestinians a new temporary building freeze of 60 days, in return for the PA formally recognising Israel as a Jewish state. This offer was immediately rejected by Abbas.

When Abbas returned to the Arab League, asking them to back him in offering Israel his ultimatum – stop all building in the West Bank and East Jerusalem or we will pull out of the peace process – the League hesitated. The prospect of a sovereign Palestine, clearly within grasp, was too valuable to cast away heedlessly. They procrastinated. Give the United States – under whose auspices the peace process had been renewed – a month to come up with a compromise proposal, they said. We will reconvene in November to see if a deal can be agreed that will allow the talks to continue.

Since then, the Palestinians themselves have indicated that there need be no fixed deadline to a possible offer from the US. And in the interim Netanyahu has been in the States, engaging in intensive diplomatic negotiations. Last week he reported to his Cabinet that the US has put forward a proposal for a 90-day settlement freeze in exchange for support and military aid.

"This proposal was raised during my talks with US Secretary of State Hillary Clinton,” he said. “It is still not final; it is still being formulated by the Israeli and American teams. If and when it is complete, I will bring it to the appropriate Government forum, which in this case is the Cabinet. In any case, I insist that any proposal meet the State of Israel's security needs, both in the immediate term and vis-à-vis the threats that we will face in the coming decade."

Netanyahu's ministerial majority may hinge on the votes of the two Shas members in the security cabinet, and they have said they will oppose him if the US does not explicitly confirm in writing that building throughout Jerusalem will be permitted during the freeze. Accordingly, Netanyahu has delayed a security cabinet vote on the freeze pending US delivery of written assurances of the understandings agreed upon between him and US Secretary of State Hillary Clinton.

US State Department spokesman Mark Toner said on 18 November: "we are working intensely with both parties." When asked whether, in its conversations with the Palestinians, the US discussed the possibility that the new freeze might exclude east Jerusalem, Toner responded rather obliquely: "We are trying to create the conditions to get them back into direct negotiations."

But building in east Jerusalem does indeed seem likely to prove a major difficulty, for today, 21 November, President Abbas said that the Palestinian Authority will not return to peace talks with Israel unless there is a freeze on settlement building that includes east Jerusalem. Speaking to reporters after meeting Egyptian President Hosni Mubarak in Cairo he said: "If there is no complete halt to settlements in all of the Palestinian territories including Jerusalem, we will not accept". Abbas added that neither the Palestinians nor Israel had as yet received an official US request to return to the talks.

The word is that the US is in the process of offering an incentive-filled package to Israel in return for a 90-day building freeze in the West Bank settlements. The package is rumoured to include the US using its veto power in the UN against any unilateral declaration of a Palestinian state, and eventually to providing Israel with 20 additional F-35 Joint Strike fighter jets worth some $3 billion. (Incidentally, some US politicians are reported to be indicating that Washington is now backtracking, and wants some sort of payment for the coveted fighter aircraft.)

It is not, perhaps, surprising, that President Abbas was quoted by the London-based Asharq Al-Awsat newspaper today as saying that there should be no linkage between freezing settlement construction and supplying Israel with weapons. Nevertheless and notwithstanding, in the middle of last week there was a convincing report that Palestinian sources had indicated that they, too, were expecting a package of incentives from the US in return for resuming peace talks with Israel.

As each party takes a turn at stirring the pot, which is bubbling ominously and looks increasingly likely to boil over, prospects for a return to the face-to-face peace talks are starting to fade. (One idea mooted a few weeks ago is that if a resumption of direct talks eventually proves impossible, the Arab League might propose a return to the “proximity” talks that started the current initiative back in the spring.)

The fact is that the two principal parties are each, in their own way, hamstrung by political imperatives. As the distinguished Middle East commentator, David Horowitz – also, incidentally, editor of the Jerusalem Post – astutely pointed out last week, the Palestinian leadership has, over the years, negotiated with Israel even as building not just in east Jerusalem but across the West Bank continued. By doing so, he wrote, “they were essentially accepting that construction would quietly go on at a relatively low level until an accord was reached – that no Israeli government was going to initiate a bitter confrontation with the potentially affected settlers before the painful deal was done, and that the eventual signature of such an accord would resolve the final status and disposition of the disputed territory.”

What Horowitz asserts, with some reason, is that President Obama and his administration, by repeatedly urging Israel to halt all building over the pre-1967 lines, including in east Jerusalem, has shattered that pragmatic framework.

Ramat Shlomo, the Jerusalem neighbourhood where new building plans caused a Netanyahu-Obama fracas earlier this year, had quietly become home to thousands upon thousands of Israeli Jews. But neither Ramat Shlomo, nor the neighbourhoods of Pisgat Ze’ev and Har Homa, the focus of this week’s row, are areas that Mahmoud Abbas can seriously believe would come under the sovereignty of a future Palestine. Washington has in effect, Horowitz asserts, cut the ground for compromise from under Mahmoud Abbas’s feet.

The bitter irony, he writes, is that while the administration evidently continues to believe that pressuring Israel over this issue will help mollify the Palestinians and thus bring them back to the peace table, Abbas himself is telling anybody who will listen precisely the opposite. As Washington Institute analyst David Makovsky noted this week, Abbas “felt trapped by Obama’s call for a complete settlement freeze in the spring of 2009.” It meant that he couldn’t now come back to the peace table without it.

And that is precisely the spot on which the Palestinians now stand – demanding what Netanyahu certainly cannot politically deliver: a complete building freeze in all West Bank settlements and in east Jerusalem. A maze indeed. Is there a way out?

Israeli-Palestinian log-jam: a need for will and skill

“A pointless provocation” – that is how Ha'aretz, perhaps Israel’s most influential daily newspaper, categorises the latest building plan to emanate from the Interior Ministry and the Jerusalem District Planning and Building Committee, not to mention the planning authorities in the West Bank city of Ariel.

At the very moment when the fate of the suspended peace talks is in the balance, and when Benjamin Netanyahu, Israel’s prime minister, is trying to convince public opinion about the sincerity of Israel’s efforts to reach a peace agreement with the Palestinians, these right-wing authorities have thought it appropriate to announce a plan for new construction beyond the "Green Line" that separates West Jerusalem from the parts of the city captured from Jordan in the 1967 Six Day War – over 1,000 additional housing units in Har Homa, a neighbourhood south of Jerusalem, and another 800 units in Ariel.

It is a cruel trick of fate that the senior US figure with whom Netanyahu is discussing the future of the peace initiative in Washington, in addition to Secretary of State Hillary Clinton, is the Vice President, Joe Biden – the self-same Biden so publicly humiliated in Israel back in March. Arriving to inaugurate the carefully prepared “proximity talks” between Israel and the Palestinians – the first formal contact between them for over a year – Biden had no sooner set foot on Israeli soil than Israel's Interior Minister, Eli Yishai, who also happens to be the leader of the religious Shas party, authorised the final approval of a scheme to construct 1600 new housing units in Ramat Shlomo, an ultra-orthodox Jewish district of Jerusalem beyond the Green Line. Poor Joe Biden must now be experiencing stomach-curdling feelings of déja vu.

It is no comfort to anyone, least of all the Palestinian leaders, that the building plans just announced are more than a year from being implemented. Palestinian leaders interpret the latest announced expansion as a sign that Israel has turned its back on the face-to-face peace talks. “Israel’s latest announcement of more settlement construction,” said Saeb Erekat, the chief Palestinian negotiator, “further threatens the already stagnated negotiations process.”

President Obama, currently in far-off Indonesia, categorises the announcement as “never helpful when it comes to peace negotiations” – a comparatively muted reaction compared with that of Catherine Ashton, the European Union foreign policy chief, who called for the expansion to be reversed. At his press conference, Obama said that in spite of the announced construction programme, the USA was committed to a two-state solution based on a negotiated settlement. “I’m concerned,” he said, “that we’re not seeing each side make the extra effort involved to get a breakthrough that could finally create a framework for a secure Israel living side by side in peace with a sovereign Palestine. We’re going to keep on working on it though, because it is in the world’s interest, it is in the interest of the people of Israel, and it is in the interest of the Palestinian people to achieve that settlement, to achieve that agreement.”

The London Financial Times reports that several analysts and officials have been arguing that the timing of the announcements, just ahead of Netanyahu’s meeting with Secretary of State Clinton, was no coincidence, and suggested they could in fact be part of an Israeli effort to prepare the ground for a new freeze on settlement construction. By allowing such sweeping plans to move ahead now, it has been argued, Netanyahu may be hoping to limit right-wing and settler opposition should he decide to implement a new building moratorium.

The US administration has repeatedly urged Israel to renew its 10-month freeze on settlement building, which lapsed in September. Washington believes a new moratorium is vital to reviving deadlocked Israeli-Palestinian peace talks. So the American response to the new building announcement, an expression of deep disappointment, is not a surprise, but makes little impression on the Interior Ministry, the Jerusalem municipality, and the Ariel patrons, who glory in macho gestures in reaction to American pressure, regardless of their wider implications.

“It has thus become clear to everyone,” states Ha’aretz in a hard-hitting editorial, “that two governments rule the state: one which tries to demonstrate willingness to operate in a framework that could possibly lead to peace talks and an agreement, and another one that acts to destroy this framework. If the prime minister does not immediately announce his opposition to these construction plans, and his intention to defer them at least until a new agreement is reached concerning talks with the Palestinians, he will be unable to convince anyone that he really wants peace.”

But in his latest statement Netanyahu asserted that Israel does not see any connection between the peace process and the policy of planning and construction in Jerusalem. "For the last 40 years," he maintains, "every Israeli government built in every part of the city. During that period, peace agreements were signed with Egypt and Jordan, and for 17 years direct negotiations were held with the Palestinians. These are historical facts. Construction in Jerusalem has never interfered with the peace process.”

Washington disagrees. “There clearly is a link,” says State Department spokesman P J Crowley, “in the sense that it is incumbent upon both parties ... they are responsible for creating conditions for a successful negotiation. To suggest that this kind of announcement would not have an impact on the Palestinian side I think is incorrect.”

"I think it's overblown," riposted Netanyahu in a television interview with the Fox Business Network. "You are talking about a handful of apartments that really don't affect the map at all, contrary to impressions that might be perceived from certain news reports. So it's a minor issue that might be turned to a major issue. I think this is wrong."

Tension over settlements was diverting attention from more important topics, said Netanyahu, claiming that despite continued building in East Jerusalem, an agreement could be reached if both sides wanted it. "You put the minor issues aside and you deal with the major issues…and you try to fashion a peace deal. If there's a deal to be made there, you'll see it in a year. If there's not a deal," he said, "then we won't succeed."

In his television appearance, Netanyahu stuck rigidly to the Israeli line that it was Palestinian refusal to recognize Israel as a Jewish state, rather than settlements, that had left negotiations deadlocked soon after they began in Washington two months ago.

"Peace is going to be tough," he said, "but I think it's in our common interest to get it. It depends on their willingness to recognize Israel, to recognize the Jewish state as we recognize the Palestinian state, to end the conflict."

The Palestinians want a freeze on construction in the West Bank; the Israelis want Israel acknowledged as a Jewish state. The one is not an unstoppable force, nor the other an immovable object. There is room for give on both sides. Have they the will and the skill to find it?

Hanging on to the peace process

Neither of the principals in the Israeli-Palestinian peace initiative want the process to fail, and nor do the interested powers that back them. All parties are bending over backwards to try to ensure that the current fragile initiative does not founder, even though the principals are each constrained by their separate political imperatives.

Direct face-to-face discussions came to an end on 26 September with the ending of Israel’s temporary moratorium on building in the West Bank settlements. Mahmoud Abbas, the Palestinian Authority President, has committed himself to resuming the direct face-to-face talks only if Israel renews the temporary freeze on construction.

Quite why this issue has suddenly become a precondition for the Palestinian side recommencing the negotiation is difficult to understand. The building freeze was only ever a temporary measure, it never included East Jerusalem, and previous negotiations have been conducted without any reference to the matter.

In any event, given a successful outcome to the peace talks and a final accord, the larger West Bank settlements would by common consent remain in Israel’s hands, subject to some land swap arrangement, while the smaller ones would almost certainly be evacuated. So – presuming a successful outcome to the peace talks – any new build in the largest settlements is irrelevant to the Palestinian cause, while new housing or other buildings being constructed in those smaller settlement blocs earmarked for evacuation, would eventually fall into Palestinian hands. The whole construction issue seems largely an irrelevance.

As for Benjamin Netanyahu, Israel’s prime minister, he heads an unstable coalition and is heavily dependent on its right-wing members, especially Yisrael Beiteinu, to stay in power. They were quite insistent that the temporary construction moratorium end on the appointed day, and are opposed to its renewal. Even so, Netanyahu gained their support for offering the Palestinians a modest renewal of the building freeze, in return for recognition of Israel as a Jewish state. The offer was made - and rejected. Now, Middle East analyst Anshel Pfeffer reports, sources close to Mr Netanyahu have acknowledged that with the midterms in America over, Washington will increase its pressure and Israel will find it hard not to agree to a new settlement freeze in some form. Pfeffer himself is unequivocal: “According to sources close to Prime Minister Netanyahu, he will agree to a new form of building freeze in the settlements.”

Another source of pressure on Netanyahu is his left-wing coalition partner, the Labour Party. Senior figures in the party have been threatening to leave the coalition if peace talks are not resumed. Defence Minister Ehud Barak, the Labour leader, is Mr Netanyahu's closest ally within the cabinet, travelling to Washington every few weeks on the prime minister's behalf. Without Labour, Mr Netanyahu would be left with only right-wing parties opposed to any concessions to the Palestinians. It is perhaps significant that he has recently been in contact with Tzipi Livni, leader of the main opposition party, Kadima. The aim, one can only presume, is a possible coalition deal in which Kadima would enter the government in the place of right-wing parties.

The Arab League, in its meeting on 8 October, was so reluctant to pull the plug on the direct peace talks that they gave Washington a month’s grace to try to come up with a formula concerning West Bank construction that would be acceptable to both sides. They planned to meet again early in November to reassess the situation.

In the interim, diplomatic activity between the US and Israel has been intensive in the search for a way out of the dilemma. Netanyahu is tomorrow (Sunday 7 November) travelling to the States in order to determine whether a formula acceptable to Israel is on offer. President Obama is currently on a 10-day tour of the Far East, but Netanyahu is due to meet Vice President Joe Biden and Secretary of State Hillary Clinton, who said last Thursday (4 November) that she was working non-stop to try to find a way out of the impasse. "I am very involved in finding a way forward and I think we will be able to do so," Clinton told reporters in New Zealand, where she is on an official visit.

But Netanyahu is travelling on the very day that the Arab League’s month of grace expires. A problem? Not a bit of it, according to chief Palestinian negotiator Saeb Erekat. Following a meeting with US peace envoy George Mitchell in Washington last week, he told reporters: "They're saying that efforts may need two or three more weeks. If the Americans needed two more weeks they can have the two more weeks. We're waiting to hear from the Americans, and there is no reason to convene the Arab follow-up committee until we hear what the Americans have to offer. The key,” he added, “is in Netanyahu's hands. The choice is his: settlements or peace. He cannot have both."

Meanwhile, the Palestinian Authority is becoming ever more explicit in its threats to bypass the negotiations and establish an independent state unilaterally. In a meeting with the Egyptian Foreign Minister in Ramallah on 4 November, President Mahmoud Abbas said "we are prepared to return to the negotiating table the moment Israel freezes the settlements", but added that the Palestinians are also exploring other options including a request to the UN Security Council to recognise a unilateral declaration by the Palestinian Authority of an independent Palestinian state. He said that such a move could happen "in a matter of months".

Erekat also, in his interview with reporters in Washington, reiterated that the Palestinians were considering “other options” in the event of the process remaining frozen, mentioning the possibility of seeking both US and international recognition for a unilaterally declared Palestinian state. "I hope that the United States of America, when we go to the Security Council to seek a full membership for the State of Palestine, will not oppose us," he said.

Erekat did not give a timeline for this possible move, which the State Department said on Thursday would be an unwelcome complication. "We have made clear all along,” said State Department spokesman P J Crowley, “that unilateral steps, either by the Israelis or by the Palestinians, undermine the direct negotiation which is the only way to resolve the core issues, reach an agreement and end the conflict."

That happy outcome is undoubtedly in the balance. The peace process hangs on by its fingernails.

The Hong Kong solution

By the middle of the 19th century Britain was in the full flood of its imperial expansion. It genuinely “ruled the waves” and China, losing the first Opium War in 1841, was forced to cede the island of Hong Kong. Following the second Opium War in 1860, Britain also took possession of the Kowloon Peninsula.

During the following decades, Hong Kong flourished. Trade expanded rapidly, and banking and insurance began to thrive. But the island lacked resources such as water and farmland, and Britain pressed China to cede more land. In 1898 Britain succeeded in gaining rights in areas known as the New Territories. Unlike the previous agreements, the New Territories were offered to Britain on a 99-year lease, due to expire in 1997.

Let’s complete the story. As 1997 approached, it became clear that although the treaties signed by Britain and China gave Britain possession of Hong Kong Island and the Kowloon Peninsula for all eternity, if they attempted to hand back only the New Territories China would want the rest as well. In late-1984 an agreement was reached: China would take over the entire colony on 1 July 1997, but Hong Kong's unique free enterprising economy would be maintained for at least 50 years. Hong Kong would become a Special Administrative Region (SAR) of China with the official slogan, "One country, two systems".

Now, absence of news provides a fertile breeding ground for rumour, and there has certainly been a lack of solid information emanating from Israeli-Palestinian sources over the past few weeks. We are now nearing the end of the month specified by the Arab League for the US to come up with some formula for renewing the direct peace talks. These, it may be recalled, were broken off on 26 September, when the building freeze ended and construction in the West Bank settlements resumed.

Diplomatic activity masterminded by Washington has continued throughout the period, and Israeli prime minister Netanyahu is flying to the States on 7 November to meet US Vice President Joe Biden and other officials to discuss "a renewal of the peace process with the aim of reaching an agreement on peace with security for the state of Israel." He will not be meeting President Obama, who will be travelling in Asia at the time.

The question is: will Netanyahu be seriously discussing the very odd, but apparently genuine, possibility reported by the London-based newspaper Al-Sharq al-Awsat on 29 October. Israel, the paper reported, in its secret negotiations with the American administration aimed at clarifying the nature and demarcation of a Palestinian state, has been discussing the option of Israel leasing land in east Jerusalem and the Jordan Valley from the Palestinian state for 40-99 years. Palestinian sources have apparently confirmed the story.

According to one of the sources, the initiative, which he said was "American, not Israeli," has been on the table for a while now "in order to reach common ground with the Israeli side regarding the borders issue and to reach an agreement on what will remain under Israeli sovereignty." Officials in Washington refused to confirm or deny the report on the new initiative. A State Department source told the paper that Israel and the US are discussing matters "as a part of the close relations between the two countries.”

Does the Hong Kong model provide any sort of template for a future Israeli-Palestinian accommodation, or is the whole concept “pie in the sky”? Of course, extremer right-wing Israeli political opinion will immediately demand: “Why on earth should we lease our own land from the Palestinians?” But if this US proposal is indeed being discussed, it is clearly designed to address some of Israel's key security concerns. Netanyahu has said that Israel must maintain a security presence along the border in a peace deal with the Palestinians to ensure that heavy weapons are not smuggled into the new state, and to prevent infiltration by extreme Islamist interests, such as Hamas, armed by their Iranian and Syrian paymasters. The leaseback option might indeed provide a medium- to long-term solution to that problem, while allowing Israel to agree the borders of a future sovereign Palestine that accords with Palestinian aspirations.

But, as they say, there is nothing new under the sun, so it is not perhaps surprising to find that five years ago a plan was seriously being mooted for the biggest Jewish settlement blocs in the West Bank to be "leased" from the Palestinians. The proposal was being discussed within the Israeli Labour Party in a bid to overcome one of the most difficult obstacles to a lasting peace.

The London Independent newspaper reported in December 2005 that a group advising Amir Peretz, then Labour Party leader, had been considering a proposal for a long-term leaseback of the main settlement blocs on the model of the 99-year agreement that provided for Hong Kong to remain under British control until 1997. Clearly the proposal was an attempt to square the circle between Palestinian insistence that any two-state solution should broadly conform with Israel's pre-1967 borders, and the view of a wide segment of Israeli opinion that the major settlements should remain in Israeli hands.

Since then the situation has somewhat changed. Even PA President Mahmoud Abbas has on several occasions acknowledged that in any final agreement the major Israeli settlements would probably remain in Israeli hands, subject perhaps to a land-swap deal. The same would not be true of the plethora of smaller settlements scattered across the West Bank, and it may be that a lease-back deal affecting some of them could form part of a final accord.

But whether a final accord will indeed emerge from the current peace initative seems at the moment very much in the balance. The good news is that the Arab League appears reluctant to pull the plug on it, and much rests on whether the US can devise a formula within the next week or so that satisfies both Israel and the Palestinians. If they don’t, it has been suggested that the Arab League, rather than opting to end the face-to-face negotiations, might propose a return to the “proximity talks” that preceded them, at least temporarily. The next few weeks should resolve that matter, at least.