In the coming weeks, Danny Dayan and his neighbours will be at the centre of diplomatic attention as policymakers from Washington to Jerusalem try to breathe life into a new round of Middle East peace talks. He, in turn, will do his utmost to ensure that the latest diplomatic effort is stillborn.

Mr Dayan is one of about 300,000 Jewish settlers in the occupied West Bank. He also serves as chairman of the Yesha Council, Israel’s powerful settler lobby which has resisted efforts to remove settlers from the west Bank and east Jerusalem to make space for a Palestinian state.

A fierce critic of the peace talks launched in Washington last week, Mr Dayan has long played a prominent role in Israeli politics. But with settlements posing a formidable – and immediate – obstacle to the US-led negotiations, his voice is certain to be heard outside the country as well.

Speaking in his spacious, sun-drenched home in Ma’ale Shomron, a small settlement in the northern West Bank, Mr Dayan bemoans the international community’s “obsession” with the settlers. “We are the most stereotyped population in the world and the most demonised population in the whole world,” he complains.

At the same time, Mr Dayan leaves no doubt that Israel’s settlers have the clout and the connections to disrupt the diplomatic process. “The [Israeli government] coalition is very sympathetic to our cause. We have a great deal of political leverage in the system,” he says. More than one in three members of parliament, he adds, has joined the “Land of Israel” caucus in support of the settlement enterprise.

For many years, the Yesha Council could also count on the support of Benjamin Netanyahu, the Israeli prime minister. These days Mr Dayan and other settlers are re-examining their stance. Israel’s leader, he says, made a “gross mistake” when he backed the creation of a Palestinian state last year – a concession that paved the way for the launch of talks this month.

Whether that statement marked a tactical concession or not, he argues, is of no importance today: “It is now his strategy – whether voluntarily or involuntarily. Netanyahu is now deeply committed to the process and there is no way back.”

Like many Israelis, Mr Dayan finds it hard to reconcile Mr Netanyahu’s past with his new enthusiasm for peace talks with the Palestinians. “We know that he knows that the establishment of a Palestinian state is an existential threat to the Jewish state. He explained it better than anyone else in his books, in his speeches and his private talks."

More than Mr Netanyahu’s agreement to participate in peace talks, what worries Mr Dayan is the subtle but revealing change in the prime minister’s language.

He was particularly alarmed when he heard the Israeli leader speak of the “West Bank” in a short speech delivered after the launch of peace talks in Washington last week. It is a term that is shunned by settlers and their supporters, who refer to the occupied territories as Judea and Samaria, biblical terms that underline the Jewish claim to the land.

“It was very telling,” says Mr Dayan. “For a person like Netanyahu – just like for me – it is not natural to say ‘West Bank’.”

However, in spite of the recent disappointment, the settlers are in no mood for a clash with the government. That would change, however, should Mr Netanyahu prolong the 10-month moratorium on new construction in the West Bank settlements, due to expire later this month.

“Today our attitude is one of cautious monitoring. [But] if the moratorium is extended it will be all-out confrontation,” Mr Dayan says. “I am convinced that an extension of the freeze will lead the government to collapse, maybe not immediately but within a few weeks or months.”

If, as Mr Dayan believes, the current talks are destined to end in failure as well as “terrible instability and ultimately violence”, what is the alternative? “We have to manage the conflict, not try to resolve it. The situation here in Judea and Samaria is stable. It is not ideal, for no one. [But] the status quo is the only stable equilibrium I can see in the Middle East. All other solutions will collapse very rapidly,” he says, adding that the Jewish presence in the occupied West Bank had in any case become “irreversible”.