New US plan sees Palestinian state in 2012 but Israel wary

President Obama trumpeted US re-engagement with the Israeli-Palestinian peace process shortly after taking office just under a year ago. But his diplomats' efforts bore little fruit in 2009.

One sticking point is Israeli settlements. Israel has agreed to a partial freeze of new settlement building. But the Palestinian Authority has said it wants a full freeze, including a stop to construction in disputed East Jerusalem, before it will return to the negotiating table.

(See map of the region, with Israeli settlements marked, here.)

Obama's administration drew criticism for first calling for a halt to all settlement activity, but then appearing to back off that demand by praising Israel's partial freeze. In late October, US Secretary of State Hillary Clinton called Israel's "restraint" on settlements "unprecedented," wording that caused dismay in Arab capitals, MSNBC reported, and led Palestinian President Mahmoud Abbas to threaten to quit.

In an interview in the December 2009 issue of Foreign Policy, former US President Bill Clinton said he thought there was "some chance" that the Israelis and Palestinians might be ready for a deal, because "the long-term trend lines are bad for both sides."

Right now, Hamas is kind of discredited after the Gaza operation, and yet [the Palestinian Authority] is clearly increasing [its] capacity. They are in good shape right now, but if they are not able to deliver sustained economic and political advances, that's not good for them.

The long-term trends for the Israelis are even more stark, because they will soon enough not be a majority. Then they will have to decide at that point whether they will continue to be a democracy and no longer be a Jewish state, or continue to be a Jewish state and no longer be a democracy. That's the great spur.

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