With the expiration of Israel’s partial freeze on settlements only two weeks away, President Barack Obama is concerned. The “major bone of contention” he referred to over the weekend is the potential lifting of the settlement moratorium which could wreck the talks before they get out of first gear. The president’s credibility and the future of talks depends on Prime Minister Benjamin Netanyahu.

One proposal reportedly on the table is to allow construction in the main settlement blocs Israel intends to annex as part of any peace deal while imposing a “mini freeze” in isolated West Bank settlements. The idea would be to keep the restrictions quiet in order to minimize chances of a public uproar among right-wing Israelis. But the proposal is unlikely to impress the Palestinians who are seeking a complete halt to settlement construction in the West Bank, including East Jerusalem.

Another suggestion is that Netanyahu will say the freeze is not being extended but will assure the Palestinians privately that no new developments will be authorized. That kind of arrangement probably would not last long, but perhaps long enough to keep Abbas talking.

A full moratorium on the settlements is the only solution that will keep Abbas in the negotiations. It may be better for the parties to be talking than not talking, but it should be remembered the Palestinians initially insisted they would not resume face-to-face negotiations with the Israelis unless there is a total freeze on settlement activity. Having previously warned that there will be no agreement if Israel continues expanding settlements on occupied land, Abbas will not be able to continue talking while Israel continues building.

Obama wants Abbas to give Netanyahu political room for maneuver, in other words to make concessions that would make extending the settlement moratorium “a little bit easier.” But Abbas’ standing within the Palestinian community is so shaky after the US announcement that the talks would resume without pre-conditions. It created considerable anger and disagreement within the PLO, sparking a last-minute crisis that almost derailed the entire process. So it would be political suicide should he concede anything that is rightfully Palestinian.  

Netanyahu, for his part, is under no political pressure at home to reach agreement; on the contrary, when he resisted the Obama administration on the subject of settlements, his domestic political standing soared. If Netanyahu comes back with an accord, he will be hailed as a historic leader. If the talks collapse, his settlements will still be there for a people who no longer view peace with the Palestinians as a priority. Both ways, Netanyahu comes out the winner. Given that the talks have begun, Obama believes it makes sense to extend the moratorium. Logic dictates as much but the Obama administration, which wants and needs these peace negotiations to work, faces a conundrum not easily solved: The talks had to start before Israel’s temporary freeze on new settlements ends on Sept. 26 or they may not have started at all. Now that they’ve started they could stop dead in their tracks, again because of the settlements.