Israeli prime minister Benjamin Netanyahu has once against scuttled a chance for progress in the stalled Israeli-Palestinian peace process. You didn’t know? Don’t feel bad. It all happened so quickly that hardly anyone noticed it – except in Ramallah, where the Palestinian Authority has its offices. There they know all too well what happened, and why.

This latest chapter in Israel’s war against peace began at the end of September, when Netanyahu’s moratorium on expansion of the West Bank settlements ended. The U.S. called for a two-month extension, and Palestinian President Mahmoud Abbas insisted that he’d break off the talks if building in settlements began again. How could he accept less from Israel than what the U.S. demanded?

Netanyahu kept the world in suspense in early October while he figured out what he must have thought was a clever maneuver. He’d agree to the extension, he said, in return for Palestinian recognition of Israel as the state of the Jewish people.

Background: Israel has always called on its neighbors to recognize its “right to exist.” The Palestinians gave that recognition many years ago. Under Netanyahu, the Israeli government has upped the ante: demanding recognition of Israel as “a Jewish state” and “the state of the Jewish people” and dishonestly treating the new demand as equivalent to simply recognizing Israel’s “right to exist,” knowing full well that the Palestinians would find it much harder to accept this new version of the demand. In fact, Netanyahu must have hoped the Palestinians would find it impossible.

The Palestinians had good reason to resist. They feared that, if they accepted the new formulation, Israel would use it to bar any right of Palestinian return and to justify treating non-Jews in Israel as second-class citizens. As if to confirm the truth of that fear, immediately after Netanyahu offered his deal – moratorium extension for recognition of “Jewish state” – the Israelis passed a new law requiring new non-Jewish citizens to swear loyalty to Israel as a Jewish state. Jews would be exempt from swearing the oath. Right-wing Israelis had long been pushing for this new law. Why pass it just now? Was it to ensure that the Palestinians would turn down Netanyahu’s offer?

If so, things didn’t work out as the Israelis had hoped. Three days after the law was passed, Yasser Abed Rabbo, a top Palestine Liberation Organization official, suggested that the Palestinians were in fact open to Netanyahu’s offer. He told Ha’aretz, Israel’s leading liberal newspaper, that “the Palestinians will be willing to recognize the state of Israel in any way that it desires, if the Americans would only present a map of the future Palestinian state that includes all of the territories captured in 1967, including East Jerusalem.”

“If the map will be based on the 1967 borders and will include our land, our houses, and East Jerusalem, we will be willing to recognize Israel according to the formulation of the government within the hour,” Rabbo said. “Any formulation the Americans present – even asking us to call Israel the ‘Chinese State’ – we will agree to it.”

The Obama administration clearly heard Rabbo’s offer. “The U.S. State Department called Wednesday for Israel and the Palestinians to press ahead with direct peace talks, citing comments by a senior Palestine Liberation Organization official that the Palestinians would be willing to recognize Israel in any way it desires if the Americans were to present a map indicating the borders of the future Palestinian state based on the borders of 1967. ‘This is exactly the right conversation that the Israelis and Palestinians need to have, to be exchanging ideas on how to advance this process to a successful conclusion,’ [State Department spokesman Philip] Crowley said.”

Rabbo’s statement was not an official communication from the Palestinian Authority government. Though PA officials walked a finer line, they hinted that they were ready to accept the deal Rabbo outlined. When Palestinian negotiator Saeb Erekat said that recognizing the Jewishness of Israel could never be accepted, Ha’aretz reported, “his colleague Nabil Sha’ath added that the government in Ramallah would not tolerate a partial construction freeze and that the moratorium must also be applied in East Jerusalem.” This left the door open for the Palestinians to accept the demand in return for a total freeze applied to the whole West Bank, including East Jerusalem, as well as the U.S. presentation of a map.

At the same time, when Nabil Abu Rdainah, spokesman for Palestinian President Mahmoud Abbas, said that a return to U.S.-backed peace talks required a freeze on settlement-building by Israel, he emphasized that “the issue of the Jewishness of the state has nothing to do with the matter.”

Abbas himself echoed Rabbo’s offer a day later when he said, “If the Israelis want to call themselves any name, they should address the international community and the United Nations, because this is none of our business. … Our position is that we recognize Israel. We fully believe in the two-state solution – a Palestinian state on the 1967 borders and the state of Israel, living next to each other in peace and security.”

This was only an elaboration of the main point that Abbas has been making for months: Palestinians will not object if Israel calls itself “the Jewish state” or “the state of the Jewish people.” But now the deal was made more concrete: Let the U.S. and/or the U.N. simultaneously sanction both the designation of Israel and the borders of the new Palestinian state, and let Israel extend its building moratorium.

This left Netanyahu with no reason to refuse the two-month extension in the moratorium that the U.S. was pushing for. To put even more pressure on Netanyahu to continue negotiating, the Palestinians said that they would not demand an immediate resumption of the moratorium. Instead, Abbas endorsed an Arab League decision to take a wait-and-see attitude. Rather than calling off the negotiation process immediately, he would give the U.S. a month to convince Netanyahu to extend the moratorium. “If this happens,” he said, “we are ready immediately to go to direct talks, starting with the issues of borders and security.”

Now Netanyahu and his government faced a terrible problem: The Palestinians were accepting demands that the Israelis had counted on to be rejected. There was no obvious reason for the talks to come to a halt, and the U.S. was pushing for talks to resume. But the Israelis could expect more pressure to negotiate the crucial issue for the Palestinians: a map showing the borders of the new Palestinian state.

Netanyahu again faced his unending problem: How can you prevent progress and blame it on the other side when the other side is always yielding to your demands?

The answer, it turned out, was simple: Make a dramatic gesture to show that the moratorium on settlement expansion would not be extended – a gesture sure to outrage the Palestinians. So, the day after Rabbo’s unexpected gesture of conciliation, Netanyahu announced that Israel would build 240 new housing units in East Jerusalem. Netanyahu claimed that this had nothing to do with the moratorium on settlement expansion; by Israeli definition East Jerusalem is part of Israel, not occupied territory, and the Israelis are free to build anywhere in the city.

But they know full well that the rest of the world views East Jerusalem as illegally occupied territory. And they know that East Jerusalem is increasingly the central flashpoint in the conflict. If Netanyahu wanted to find a symbolic gesture to show utter contempt for the Palestinians, the peace process, and the U.S., he could not have made a better choice. Palestinian negotiator Erekat summed up the situation quite precisely: “The Netanyahu government is determined to thwart any chance of resuming direct negotiations.”

Once again, though, the response from Abbas showed that he remains open to compromise. Netanyahu got the soundbite he hoped for: “Palestinian Authority President Mahmoud Abbas said Friday that under no circumstances would the PA sign an agreement with Israel which required the recognition of Israel as a Jewish state.” But Abbas was not nearly as rejectionist as that one sentence made him sound. He would not rule out further negotiations, he said, and his government would “exhibit flexibility regarding the nature of the negotiations, but [he] added that they would not negotiate on issues the Palestinian people consider principal matters.”

In another interview, this one for Israeli television, he explained the principal matter more subtly: “Obviously we recognize the state of Israel. It’s obviously a Jewish state. If you want it recognized as the Jews’ state, you are free to do so. But you did not ask recognition from Egypt, Jordan, or any other country in the world. You can do whatever you want, but it’s not my business.” In other words, we recognize that Israel is a Jewish state, but we won’t give that fact our official, explicit stamp of approval.

Naturally, Netanyahu will ignore that or, if forced to respond, say it’s not good enough. Nothing the Palestinians do can ever be good enough for an Israeli leader determine to head off a just peace settlement at all costs.

So far, it appears that Netanyahu’s gambit is succeeding. The Palestinians are balking at further negotiation with him. The U.S. government has not called him to account, beyond the usual ineffectual statement of “disappointment” over the new building in East Jerusalem. Nor have the mass media put any pressure on Netanyahu by spotlighting his latest maneuver to scuttle the peace talks. The U.S. media ignored the Palestinian compromise offer altogether.

In Israel, the story got a bit of play in the newspapers, but not nearly as much as the visit of Iran’s President Ahmadinejad to Lebanon. Even the liberal Ha’aretz, though it reported the proceedings, then seemed to forget it ever happened. Quotes like this, summing up the events, were typical: “Netanyahu offered earlier this week to renew the temporary freeze in the West Bank if the Palestinians were to recognize Israel as a Jewish state, but the Palestinian leadership was prompt to reject the proposal as insufficient.” It seems to be one more case, in a tragically long list of cases, where the Israelis scuttle chances for peace and then are allowed to play the injured victim.

But the only reason there was a moratorium on expanding settlements in the first place was that the U.S. pressured Netanyahu. Even commentators who despair of any chance of peace typically note that Netanyahu would have to comply with further U.S. demands if Obama put enough pressure on him.

And hints have appeared that the Obama administration is mulling the possibility of forcing serious talks about borders soon. Why else give away so much to Israel for a mere 60-day extension of the moratorium? Israel’s right-wing Foreign Minister Avigdor Lieberman claims to know that “Washington is planning to force a permanent agreement on Israel – two states for two peoples along the 1967 borders, plus-minus 3 or 4 percent of the territory exchanged. This is the objective of a continued [settlement] freeze – to give the U.S. and the international community two months to come up with a solution that will be forced on Israel.” Of course, that might be just scare-mongering spin.

But in the much more sober and influential New York Times, reporter Mark Landler noted that most analysts believe Obama will eventually “have to put down his own blueprint for a deal.” And the Times editorialized, “Sixty days is too short. But it still might be enough if the two sides – and the Americans – use the time to negotiate the borders of the new Palestinian state. (Those maps, give or take a little, were drawn up years ago.)”

The last time Netanyahu announced a major building project in East Jerusalem, Vice President Joe Biden was visiting in Israel, and the administration was seriously, though only briefly, miffed. Once the elections are past, Obama may decide that this time the Israeli leader has finally gone too far. Not likely, but possible. And if the U.S. leader feels it’s politically safe enough – or that he no longer has anything to lose – he may just have a map or two up his sleeve.

Read more by Ira Chernus

• Zionist Joke: What Have We Ever Done to Them? – June 7th, 2010
• Obama Ignores His Own Security Strategy – May 31st, 2010
• Israel Finds a New Way to Play the Victim – January 20th, 2010
• Inching Toward Compromise in the Middle East – August 12th, 2009
• Palestinians Without Palestine – June 16th, 2009