The announcement by Palestine President Mahmoud Abbas at the Arab League summit that he will not enter into indirect talks with Israel unless it backs down on settlements, coming immediately after Israeli Prime Minister Benjamin Netanyahu rejected anew international calls to stop settlement building in East Jerusalem, means that the peace process has hit a dead-end.

This might, as Arab League Secretary-General Amr Moussa told the summit in Sirte, necessitate new alternatives from the Arabs. However, if allies cannot find the alternative, who can? The current crisis between the US and Israel masks a deeper one: The absence of any alternative or coherent policy by the Obama administration toward the Arab-Israeli conflict.

Netanyahu’s disastrous visit to Washington exposed just how bad this crisis is. In fact, the visit seems to have made things worse. The encounter did not lead to the backslapping which was expected after a fortnight of angry exchanges, but it did result in yet another embarrassment for Obama. Hours before Netanyahu’s meeting with the president, there emerged yet another settlement announcement in occupied East Jerusalem.

The timing of the Ramat Shlomo announcement, made during Vice President Joe Biden’s visit to the region, was described by Israel as a mistake; the one in Washington was not termed as such. Obviously, Netanyahu is challenging without fear while Obama is not. The president’s only recourse is to insist that Jerusalem, along with the other core issues of the conflict, be tackled in the proximity talks between Palestinians and Israelis.

Netanyahu is reticent, worried that his allies on the nationalist and religious end of his ruling coalition would rebel if he assents too much. However, Obama should no longer be willing to accept that as a reason. If he genuinely wanted to make concessions for peace, Netanyahu has a willing coalition partner available in the form of the centrist Kadima Party, whose 28 seats make it the largest party in the 120-seat Parliament. Together with the 27 held by his own Likud and the 13 by Labor (which is already in his coalition), Netanyahu could easily muster a governing coalition committed to implementing a two-state peace — if he intends to go there himself.

Netanyahu’s claims that Jerusalem was Israel’s, to do what it likes with, may have been a crowd-pleaser at AIPAC but as Secretary of State Hillary Clinton warned in her speech to the same gathering, the status quo was “unsustainable” even if some in Israel thought it was.

Judging by the latest events, the Obama administration has concurred with Abbas that it is impossible to negotiate peace while Israel continues to settle its people on occupied land. The US does not agree with Netanyahu’s insistence that Israel has the right to build whatever and wherever it wants in Jerusalem. Israel’s claim that that Jerusalem is its sovereign capital is not being accepted by its allies. As such, Obama seems to see Netanyahu as part of the problem.

Netanyahu will return to the US as early as April for Obama’s global nuclear conference. This time he should be forced to choose between his hard-line coalition partners and serious peace negotiations. He probably will not choose. However, Obama should make clear the alternative: When there is no political process to absorb the heat and give people even a glimmer of hope, the result tends to be violent.