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Supported by the United States, Israel has always feared "internationalization" of the Israeli-Palestinian conflict over direct negotiations and rightly sees the majority of United Nations members as biased against it. Palestinians recognize their relative advantage in international forums but, until now, have been content with the familiar ritual of General Assembly resolutions critical of Israel. Now that Palestinian Authority president Mahmoud Abbas has upped the ante and applied for admission through the Security Council, no one really knows what happens next. But it's safe to say that chances of successful negotiations have been set back.

Everyone, including Mr. Abbas, knows that UN resolutions won't create a Palestinian state on the ground; Mr. Abbas says his move is meant to complement, not replace, resolutions. But the three leaders who spoke last week directed their remarks primarily to domestic audiences rather than advancing Middle East negotiations. The result is an exacerbated stalemate.

Barack Obama was first. Smarting from withering Republican attacks, declining Jewish support and the Republican victory in New York's 9th congressional district, he shifted gears and refrained from making demands on both sides. He presented Israel's security concerns expansively and signalled that he'd no longer risk his political neck to try to broker peace. (Given the harshly disparate Israeli and Palestinian visions and his own looming re-election fight, the President's choice is prudent, if not helpful.)

Mr. Abbas successfully kicked off a game-changing move that's reshaping international discourse on the conflict, shoring up his failing leadership and that of the Fatah faction against Hamas. But, in the process, he's further eroding what little trust Israelis have in his intentions. True, Mr. Abbas restated his commitment to a Palestinian state in the 1967 borders alongside Israel and strongly abjured violence. But his diatribe against Israel, pernicious omission of Jewish historic ties to the Holy Land and a repeated precondition for talks – an Israeli freeze on settlement construction – left even liberal Israelis reeling. And he did nothing to alleviate concerns about Hamas's Gaza-based rocket attacks, which he can't stop.

Israeli Prime Minister Benjamin Netanyahu played to Israeli voters, American Jews and Republicans (with whom he enjoys close ties) but, in so doing, left Palestinian ears cold. Mr. Netanyahu's inner world is framed by traumas of history, persecution, security threats and harsh isolation experienced by Israel and Jews. Fuelled by real concerns over regional instability as the Arab Spring morphs into an autumn, he left no room for hope and distanced himself as far as humanly possible from Yitzhak Rabin, who said in 1993: "No longer is it true that the whole world is against us."

Mr. Netanyahu also dismissed the call by his predecessor, Ehud Olmert, for resuming the talks that had stopped in 2008, and blamed Palestinians for every hitch in past negotiations. But even Israelis and Jews who disagree with Mr. Netanyahu's overall approach acknowledge the risks he articulates and support his call for Palestinian recognition of Israel as a Jewish state – a demand pointedly rejected by Mr. Abbas. Not surprisingly, the Israeli Prime Minister's domestic approval rating improved dramatically.

The U.S. and Israel are counting on delays in Security Council procedures and process. In parallel, the Middle East Quartet will try to push the parties to the table. Although Mr. Netanyahu and Mr. Abbas don't really want to talk, other factors may force them to engage, if grudgingly. Mr. Abbas can't risk losing American aid, a move that Congress has threatened. And Israel's military chiefs, concerned about a flagging Palestinian Authority, strongly recommend continuing security co-operation and taking measures to attenuate popular Palestinian resentment. But make no mistake: Without effective U.S. leadership, Mr. Netanyahu and Mr. Abbas can't reach an agreement within the next year.

The immediate concern is the spoiler factor: Palestinian frustration can easily ignite a match; fringe groups of Israeli settlers prepared to use violence can stoke the flames; and a now weakened Hamas may activate rocket fire from Gaza and spawn Israeli retaliation. Any of these triggers might mean that waiting for the next U.S. election may be too late.

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