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by its own reckoning, the attack has resurrected Hamas as a political player in the West Bank. In its attacks on settlers on two consecutive nights in different parts of the West Bank, Hamas demonstrated its reach despite a three-year, US-backed PA military campaign and exposed the fallacy of the PA’s claims to have established security control in the West Bank. “It’s not muqawama (resistance) against Israel,” says ‘Adnan Dumayri, a Fatah Revolutionary Council member and PA security force general. “It’s muqawama against Abbas.”  It also enabled the Islamists to catch seeping popular disaffection across the political spectrum toward a process of negotiations that appeared to Palestinians to be leading into a blind alley of continued Israeli control. Should Abbas fail to negotiate a halt to settlement growth, Hamas in its armed attacks against settlers would emerge from its three-year political wasteland to offer Palestinians an alternative. In contrast to the international media, where the attack was roundly condemned, in Palestine the attack earned plaudits not only from Hamas’ core constituency, but also from a broad swathe of Fatah and secular activists, including some senior actors, disillusioned by 19 years of negotiations based on an ever flimsier framework. Unlike the Annapolis process or the “road map,” the twin Bush administration initiatives that the Obama administration chose to ditch, the current negotiations lack any terms of reference or agreed-upon script. Palestinians ask why Abbas agreed to meet Netanyahu given that none of the Arab targets required to turn proximity talks into direct ones were reached prior to the Obama administration’s announcement of the meeting. When American elder statesman George Mitchell presented the parties with 16 identical questions on the core issues requiring yes or no answers, Israel responded to each with a question of its own. In his August 31 press briefing before the White House meeting, Mitchell again declined to specify if Israel had agreed even to extend its (partially honored) settlement freeze past the September 26 expiration date.

To maintain stability, the president’s men have resorted to an increasingly oppressive hand. The PA’s security forces suppress not only Islamist unrest but general dissent -- in late August disrupting a meeting called to protest the resumption of negotiations. Detainees emerge from prisons testifying to interrogators drilling through kneecaps. For all of Fayyad’s claims to have built institutions, in his bid to maintain power and prevent a vote of no confidence, he has neutered the most important, the Palestinian Legislative Council, Palestine’s prime expression of sovereignty. Local elections, designed to showcase the West Bank as the more democratic half of the Palestinian polity, were annulled after its main faction, Fatah, lost confidence in its ability to win, even though Hamas had declared a boycott

demographically, Israel is shifting further to the right. Far from shocking Israel into a reality check, the killing of nine civilians from Turkey, a purported ally, in international waters generated an outpouring of self-righteousness. Internationally isolated, Israeli Jews shared the feeling that “the whole world is against us,” and in a surge of patriotism redoubled their support for their government. According to a poll conducted a week after the Gaza flotilla incident, 78 percent of Israeli Jews backed Netanyahu’s policy. Support from Israel’s fastest-growing population sectors, the ultra-Orthodox and national-religious camps, topped 90 percent. The simultaneous news of vast natural gas finds off the coast only underscored these national-religious Jews’ sense of divine protection: They had lost one treasure at sea, gentile approval, and been blessed with another. More trusting in God than Obama, Netanyahu’s government is not configured to sign let alone implement a two-state settlement. For all the external hopes that Kadima leader Tzipi Livni might join the ruling coalition, the prospects for a shake-up in Israel’s political map look at least an election away. Even then, without the emergence of a new, more left-leaning religious force, possibly led by the former ultra-Orthodox leader Aryeh Deri, the nationalist coalition looks set to retain power. Fearful of upsetting his national-religious base, Netanyahu -- always alert to instances of Palestinian incitement -- shied away from condemning Rabbi Ovadia Yosef, spiritual mentor of Shas, the coalition’s fourth largest party, who on the eve of the Washington parley called on God to kill Abbas and similarly evil Palestinians. Provided he retains the confidence of his nationalist camp, domestically Netanyahu looks secure.

Analysis Jeremy Bowen BBC Middle East editor It was only last week in New York that President Obama told delegates at the UN General Assembly an independent state of Palestine could be joining them a year from now. Even then, his words didn't sound like a blueprint for the future laid down by the most powerful man in the world. They were more like a plea to both Israelis and Palestinians to keep talking. The crisis over Jewish settlements has been waiting to happen ever since Mr Obama inaugurated this latest round of peace talks in Washington three weeks ago. Mr Netanyahu leads a coalition government dominated by parties supporting the Jewish settler movement. It's the most dynamic political force in Israel, determined that the freeze will not continue. A major reason why the settlements were started after Israel captured the West Bank, including East Jerusalem, in 1967 was to make it politically impossible for Israel to give up what it claimed as Jewish land to the Palestinians. More than 40 years on that strategy is working in the way the founders of the settlement movement intended.

diplomats close to the EU deliberations believe it is almost inevitable.

"an independent, democratic, contiguous and viable state of Palestine, comprising the West Bank and Gaza and with East Jerusalem as its capital."

the EU Council "has never recognized the annexation of East Jerusalem. If there is to be a genuine peace, a way must be found to resolve the status of Jerusalem as capital of two states. The Council calls for the reopening of Palestinian institutions in Jerusalem in accordance with the road map. It also calls on the Israeli government to cease all discriminatory treatment of Palestinians in East Jerusalem."