Donald Macintyre: Obama can't afford to sit this one out

Some time ago, the Governor of the Bank of Israel, Stanley Fischer, remarked to the Prime Minister, Benjamin Netanyahu, that future growth could rise to 5 per cent but that, if peace was reached with the Palestinians, it could be 7 per cent. If growth was going to reach 5 per cent, Mr Netanyahu is said to have replied, there was no need for peace.

Even assuming Mr Netanyahu was joking, the story helps to explain why the latest deadlock is less than traumatic for the Israeli leadership. The security threat from the West Bank is – for now – at an historically low level; Mr Netanyahu's success in seeing off the more far-reaching US demands for a settlement freeze has not dented his domestic popularity, as many predicted it would. And for a large body of Israeli opinion it is both Palestinian President Mahmoud Abbas's fault, and his problem, that he has not so far yielded to concerted US pressure to restart the talks which Mr Netanyahu has repeatedly insisted he is ready for.

That deadlock has now been formalised, so to speak, by President Barack Obama's stark admission to Time magazine that the US had failed to achieve in the Middle East "the kind of breakthrough that we wanted", and that if it had anticipated the "political problems" it "might not have raised expectations as high". While Mr Obama was careful to stress that efforts would continue, the remarks have been widely read in the region as implying that, for now, he has other more pressing matters to attend to.

The best that can be said about this is that, by owning up to the administration's own mishandling of the issue, the President has helped to protect Mr Abbas from taking sole blame. But behind the scenes there has been considerable pressure from the US on its European allies to join the calls on Mr Abbas to get back into talks, as he has – so far – declined to do in his discussions with Mr Obama's envoy George Mitchell. Both Mr Mitchell himself and that veteran of the failed Camp David talks in 2000, Dennis Ross, have been urging friendly diplomats to persuade Mr Abbas that he has nothing to lose by putting Mr Netanyahu to the test.

But most of the major allies have been slow to respond, largely because they felt some sympathy with Mr Abbas's view that he did indeed have a lot to lose. 2009 was a miserable year for the Palestinian President. The US issued an explicit demand for a total settlement freeze. But then it notably failed to back it up with the threat of sanctions with which the first George Bush brought Yitzhak Shamir to the table in 1991. And while Mr Netanyahu did – eventually – agree to temporary "restraint" in the West Bank, the overall result was a victory for the Israeli Prime Minister which left Mr Abbas badly exposed.

Then Washington gravely endangered Mr Abbas's presidency by demanding he block a UN move to endorse the Goldstone report on Israel's military offensive in Gaza. Finally it exercised little to no real pressure on Israel over the increasingly combustible issue of Jewish settlement in Arab East Jerusalem – which Mr Netanyahu has repeatedly refused to halt. Indeed while Mr Obama did refer last week to the divisions both sides face in their constituencies, his diplomats seem to have had a good deal more understanding of Mr Netanyahu's perceived, and arguably lesser, political difficulties than Mr Abbas's.

The formal position was that Mr Netanyahu was agreeing to talks without preconditions, and that Mr Abbas (demanding the total freeze he had thought he had US backing for) was not. But with Hamas waiting to pounce on any further fruitless surrender to the US, Mr Abbas's reluctance to negotiate, without any real earnest of good faith, with a man who showed every sign of meaning it when he said that Jerusalem would remain undivided, who demanded that the Palestinians should not just recognise Israel but recognise it as a "Jewish state", and who said that Israeli troops would control the eastern borders of any future Palestine, was understandable.

The danger now is that Washington will slip into the old comfort zone of "a plague on both sides". Last November, Thomas Friedman, who has played golf with the US President, wrote a New York Times column approvingly quoting James Baker's old, impatient, adage to both sides: "When you're serious, give us a call." There was an echo of this in Hillary Clinton's remark last week that in the end "this has to be between the Israelis and the Palestinians".

Actually, it doesn't. One of the refreshing aspects of the administration's language in those hopeful days last year was its repeated emphasis on the "American interest" in securing a solution in the Middle East. Mr Obama seemed to understand, as many of his predecessors had apparently failed to do, first that the conflict had a direct impact on the US's own security, if only by providing its real enemies with a casus belli; and secondly that Israel, and the Palestinians would not achieve a lasting peace on their own. Yet a year after his inauguration you only have to talk to Israeli activists on what could broadly be called the Zionist left to realise how deep is the disappointment at the failure of the US and the EU to launch the decisive third-party intervention that they are convinced is the only hope.

The greatest delusion would be that events can somehow stand still. Maybe the alternative to real progress is not yet a fresh outbreak of violence. But the facts on the ground speak for themselves; certainly the once unthinkable one that Defence Minister Ehud Barak (who still happens to be leader of the Israeli Labour Party) was last week able to confer national university status on Ariel College, in the heart of a Jewish settlement in the West Bank deemed illegal by the international community. It is a small, but symbolic, example of how entrenched the occupation has become in much of the Israeli political psyche.

Against this bleak background, if the Europeans have a duty, it is to remind – and on this issue it is sadly less credible – Washington that the Israeli-Palestinian conflict is still too important to be left to the Israelis and Palestinians to solve.

d.macintyre@independent.co.uk