It would appear that Benjamin Netanyahu, the Israeli prime minister-designate, has struck a secret agreement with Avigdor Lieberman, head of the ultra-right wing Yisrael Beiteinu Party, to continue construction on the so-called E1 settlement plan, which will sever occupied East Jerusalem from the rest of the West Bank.

If true, and both Netanyahu’s and Lieberman’s politics suggest that it very much is, this will signal the final nail in the coffin of the two-state solution. The E1 settlement plan makes it impossible for East Jerusalem to ever become the fulcrum of a Palestinian state. Without East Jerusalem there can be no viable state. Thus, the E1 plan ends the possibility of a negotiated two-state solution.

Of course, just because Netanyahu and Lieberman agreed does not make it so, but it is hard to see, in the context of a predominantly right-wing Israeli coalition government, what will stop the project from going ahead. Both politicians count among their supporters settlers whose dearest wish it is to see Israel formally annex all of historic Palestine. Lieberman, at least, counts among his supporters those who want to see Palestinians somehow transferred from areas under Israeli sovereignty.

Put the two together and the danger is obvious.

The presence of the Labour Party in Netanyahu’s coalition will do nothing to prevent the end of a viable two-state solution. It should not be forgotten that it has historically been under Labour governments that the biggest damage to chances of a two-state solution has been done, in the form of accelerated settlement activity.

Thus, the last chance for the two-state solution lies with Washington. The Obama administration has said it supports a two-state vision for the future of Palestinian-Israeli relations. That support will be severely tested in the next months. If Washington is serious, it needs the political will to stop Israel from continuing its E1 plan and to begin rolling back its settlement project.

It’s a tall order even in the best of circumstances. Perhaps, the rest of the region needs to start preparing for life after the two-state project.