Plans to expand Ramat Shlomo sparked a serious US-Israeli row and derailed talks
By Jeremy Bowen
BBC Middle East Editor
Are the new Middle East peace talks doomed when they have barely started? I haven't found anyone, Palestinian, Israeli or American, who believes they will get very far.
You can't blame anyone for thinking that.
Back in the early 1990s when the Israelis and the Palestinians first started talking to each other there was a real sense of hope and expectation. Something important seemed to be happening. The most intractable conflict of the century looked as if it might even be settled.
That didn't happen. Any 16-year-olds, Palestinian or Israeli, who believed that the negotiations would change their lives will now be well into their 30s. While they were growing up, a lot of hope was squandered and blood spilt.
This time the two sides won't even be sitting in the same room, around the same table, and not in the same building either. Even at their worst moments in the 1990s they could at least look each other in the eye.
Instead they are having what are being called "proximity talks" because the US envoy, George Mitchell, is shuttling between the two sides.
Sleight of hand
So with so much pessimism around, why talk at all?
US diplomats believe neither side wants to be blamed for strangling a new peace process at birth.
They are fairly open in private about the difficulties, but fear the alternative is a vacuum, which as usual would fill with violence. And the talks, they hope, might at least force either side to reveal some of their negotiating positions.
The talks were supposed to have started in March. But at the last minute Israel announced that it was building 1,600 new homes for Jews in a settlement in East Jerusalem called Ramat Shlomo. That infuriated the Americans, not least because the US Vice President Joe Biden was in Jerusalem at the time.
It has taken weeks of arm-twisting and cajoling by the Americans to get back to where they were before Ramat Shlomo. The Israeli Prime Minister Binyamin Netanyahu has been reminded that putting a desire to build settlements ahead of his country's relationship with the United States is not a good idea.
The Palestinian President, Mahmoud Abbas, has been persuaded to drop his insistence that he wouldn't talk unless Israel declared a complete freeze on new construction in the occupied territories.
To do that, he needed American assurances. A close aide to President Abbas told the BBC that they included a message from the White House that President Obama is wholly committed to the creation of a Palestinian state; the Palestinians need to help him by returning to the table.
The Americans have also said that no work will be done on the Ramat Shlomo project for two years, and that Mr Netanyahu will produce other goodwill gestures.
There has been talk that they might include the release of Palestinian prisoners, and a sleight of hand on construction for Jews in occupied east Jerusalem.
Publicly, Mr Netanyahu will go on proclaiming that Israel will build wherever it likes in the city it has declared as its capital; in practice, construction will be halted.
The Israeli mayor of Jerusalem, Nir Barkat, has already denied that is happening. That could be part of the game.
Or perhaps we should take at face value the remarks of a man who has been pushing Jewish settlement inside Palestinian areas, which more than anything else has raised the temperature in the Arab sections of Jerusalem.
More than any assurances, unwritten or written, what matters for the Palestinians around Mahmoud Abbas is that for the first time in a long time, they believe that they have a receptive ear in the White House, which they do not want to lose.
It has been an unusual and enjoyable new experience for Palestinians to be able to look on as Israel argued with its most important ally. The fact that the dispute is over Jewish settlements has been even better for them.
Recently in Jerusalem one senior diplomat involved with attempts to restart a peace process sighed and told me that a fundamental flaw of the Oslo peace process of the 1990s was that it allowed Israel to expand its network of settlements in the occupied territories.
For years Israel was allowed to talk, and to build, in defiance of international law. He was stating the obvious, but still did not want to be named.
There is a deep gulf to be bridged between Israel and the Palestinians.
Even if a highly unlikely diplomatic miracle happens, and some sort of deal looks possible, it is hard to see how the Palestinians could deliver their side of a bargain while the split continues between Fatah and Hamas, their two main factions.
Mr Netanyahu says direct talks are the only ones that mean anything. On past form, he would be happiest with a process that drifts on into the future, buying him time to put off the moment when he would have to confront his cabinet with some hard choices about the future.
His government, which has a core of right-wingers who are against territorial compromise in the west bank and Jerusalem, would fall before he could deliver his side of a bargain.
And - or when - the talks fail, what next?
An Obama peace plan, laying out the shape of a future settlement? Would the Americans allow a vote at the UN Security Council mandating a territorial compromise which would give the Palestinians the state they want, with a capital in Jerusalem and most of the land Israel captured in the 1967 war?
Just as likely is a third scenario: that Palestinian-Israeli talks will be overtaken by the explosion of one of the fires that are smouldering dangerously in the region.
In the last few months there has been a great deal of talk of another war between Israel and Lebanon, perhaps with Syria too. Israel and the United States say that Syria has transferred bigger and better missiles to Lebanon's Hezbollah movement. Their claim has been repeatedly denied by Syria and Lebanon.
But it is out there, and while it is war cannot be discounted.
Linked with that, because Syria and Hezbollah are allies of Tehran, is the slow-burning crisis over Iran's nuclear plans.
After years of talk, tension, and failed sanctions, it might be only months away from going critical.
A new round of sanctions against Iran is taking a long time to emerge from the Security Council.
Israel may decide by this time next year to call time on a diplomatic process it has never believed will work and send its air force to attack Iran's nuclear facilities.
Travel through the Middle East, as I have done this spring, and you will see a place where the cafes are full, the sun is shining and the streets are busy with daily life, not political tumult or war fever.
But start a conversation and you will find that the future does not look like a welcoming place.
CORRECTION: 16 May 2010. The 20th paragraph was amended slightly on 12 May to make clear that it, like the preceding paragraph, applied to the Palestinians.