The Administration has mercifully, and honestly, admitted that the time has come to abandon its policy of seeking a settlement freeze as a path to negotiations. It will pay a political price and will be blamed and endure the gloating of its critics. However, at the end of the day, the US government will be the one that everyone else will look to for providing answers and driving policy. The two-state solution is the unchanging American policy because it is in our own national strategic interest.

The indispensable American role and the twin pillars of negotiations and state-building remain unchanged. The lessons learned have more to do with how to proceed on these tracks rather than questioning our assumptions about the two-state solution and the stake holders. Bending to political reality and adjusting political approach neither means, nor does it entail, a strategic shift in policy.

A major lesson to be learned is that while high diplomacy is complex and might prove to be elusive for some time to come, more attention needs to be paid to development on the ground both in terms of deliverables, and imbuing these deliverables with political significance.

Negotiations: Necessary but Elusive

The politics surrounding the Palestinian-Israeli peace process have never been more difficult to discern or more troubling to witness. While there is a deep freeze on negotiations, there is none on settlement expansion. President Mahmoud Abbas' responsible assistance in battling the raging fire in Carmel was met with a thankful call from Netanyahu, yet these two leaders cannot move one step forward to discuss the policies and resolve the politics that stand between them and the resumption of talks. Across the whole region, the smoldering confrontations on religious, ethnic and factional fault lines threaten to erupt while a mountain of diplomatic leaks yields a river of fatuous statements by regional politicians that have further polluted the landscape.

Over the course of the past two decades, the status quo between Palestinians and Israelis has been defined by a simmering conflict that is prevented from erupting by the pursuit of a political process or, at the very least, by the appearance of serious negotiations. While the negotiations have served the purpose of keeping peace, lack of progress has regularly resulted in episodic violence. The current impasse in negotiations, in the midst of a multitude of interconnected bubbling regional conflicts, brings us perilously close to explosion.

The only policy that actually offers a solution which would permanently end the conflict is the one of a two-state solution based on the '67 borders. However, turning that policy into reality is impeded by the politics of Israel, Palestine and the United States, all the places that must come to agreement if we are to have any hope. Leaders do not seem prepared for painful compromises they must make, and for the public pushback they will face. On both sides, the loudest public voices are the vociferous and cynical lamentations of professional victims warning politicians against "betrayal" of sacred and historic "rights." The fates of Sadat and Rabin linger in the minds of the leaders who prefer to lead and to live.

A concerted effort must be made to shape expectations and to explain to people that the future is more important than the past and that sanity, let alone civility, must prevail in public discourse. History should be a guide to the future rather than a cave where one dwells. However, such reorientation of the political landscape is a complex - and time consuming - effort.

In the meantime, there is a pressing need to fill the vacuum generated by the inevitably slow and turbulent progress of negotiations. These times call for a policy to avert an explosion as the region reorients away from the zero sum game.

Quiet diplomacy including separate negotiations by each party with the US, combined with a robust state- and institution- building program of Palestinian Prime Minister Salam Fayyad offers precisely such a policy.

Quiet diplomacy must be just that-quiet. No TV appearances, no op-eds and no public statements. Only the principals should be engaged with the US, and a person who speaks for and on behalf of the President must be at the table.

The resumption of talks should remain the stated objective of US policy, and vigorous efforts in pursuit of the goal should be maintained. However, the quest should not be the only - or even the main - element of the US approach. It is time to start capitalizing on what is happening on the ground.

Progress on the Ground: It is Political

The state- and institution- building program of the Palestinian Government is already delivering palpable concrete results on the ground as well as inchoate principles of good governance. Palestinians are already reaping tangible benefits from this program and are beginning to view it as a political tool to end the ordeal of occupation. The world - particularly Israel and the US - should approach this program not as traditional development, but rather as a political effort which empowers the Palestinian people and engages their energies and imagination to earn their way to statehood by building it themselves.

The program should deliver political dividend for Palestinians. While the benefits of better governance and service delivery, enhanced law and order as well as economic development are highly significant, they are not enough. The Palestinians should be given reasons to feel that this program is bringing them closer to statehood.

How to Do It?

Progress - particularly on the security front - needs to result in Israeli territorial withdrawals and increased Palestinian jurisdiction over further areas of the West Bank. This requires an Israeli political decision to allow the military echelon to make security-based, not politically-driven, assessments on when such withdrawals and extension of jurisdiction are feasible. These assessments should then be turned into decisions and actions. This should not be subject to negotiations - which would only turn it into a political football - but rather should be part of a process of coordinated unilateralism. The Palestinians should pursue their institution building programs separately, as the Israelis make their assessments separately. Each side should be guided by its own internal assessments, goals and interests. What is needed is exchange of information, security cooperation, and a third-party - the US - to shepherd them along.

This approach would be beneficial in any scenario. It would create a buffer for the inevitable turbulence of the negotiations when they resume, and would also establish a sense of progress as well as a reality of security during periods of stalemate. Additionally, it would generate an incentive for progress in negotiations and would anchor the high politics in concrete developments. Once the Palestinians have built a state on the ground, it becomes easier to formalize it in a peace deal.

Finally, in the undesirable but possible scenario of a long impasse in the negotiations, this approach would provide a safety net against complete collapse and a return to violence. It would allow for a physical space for the Palestinians to continue maintaining security and building their economy and institutions while the diplomatic level strives to find ways toward resuming negotiations. To be clear, such a space would only be a stopgap measure and is in no way a replacement for a peace agreement that would end the conflict and create a Palestinian state, but it is patently preferable to a collapse and a return to confrontations.

As an immediate step, the institution-building program should be shielded from the vagaries of the negotiations process. Israel needs to resist the temptation to pressure Palestinian negotiators by holding back on-the-ground progress at the institution-building track. The two tracks need to be separated, and need to progress in parallel, each at its own organic pace.

Conclusion

While trilateral negotiations have come to an end in the immediate future, the quest for the resumption of negotiations cannot end. The Administration will continue its bilateral conversations with both parties. As new political realities and public perceptions are being reshaped, there needs to be positive concrete and political deliverables on the ground.

Israeli policy makers who understand the security and demographic imperatives of a Palestinian state to Israeli national interest, must engage in a strategic dialogue with those who view this effort as a threat to be stymied rather than a vehicle to deliver peace to the Israelis and the Palestinians. We, and the whole world, are helping the Palestinians build their state and its institutions as we help change the dynamics between them and Israel on the ground. Negotiations under our auspices are unavoidable and both parties must understand that they need each other to achieve permanent peace. The Palestinian state that will end the conflict is already on its way.