There are now two divergent views/policies on the issue — a settlement based on Israeli withdrawal to the June 4, 1967 armistice borders, with mutually accepted land swaps, allowing for an independent Palestinian state to be created in the West Bank and Gaza Strip, and a unilateral arrangement that does not recognize these borders or any of the fundamentals needed to achieve a just and sustainable deal. The first is the US view, and a long standing policy, enunciated recently by President Barack Obama, while the second, a novel one, is the position of the Israeli Prime Minister Benjamin Netanyahu.

To those who understand the indispensable components of the Palestine question and who have been following the evolution of the peace process since Madrid 20 years ago, the current divergence in views spells the end of peace negotiations. By debunking Obama's position, Netanyahu has swept aside volumes of two decades of meetings, understandings, agreements and commitments. In short, they have become irrelevant.

The erosion of the peace process has been well documented over the years. Few still believe in its credibility while many have pronounced it dead some years ago. But it is wrong to assume that the US position is really in contradiction with that of Netanyahu. In reality, Washington has been reversing it stands on many issues while choosing to be ambiguous on others. The retreat started under Obama's predecessor; President George W. Bush. The US allowed Prime Minister Ariel Sharon to go through with his brutal onslaught against Yasser Arafat and Palestine National Authority (PNA) symbols in the West Bank and Gaza in 2002. That was the beginning of the deconstruction of the Oslo-Washington accords and agreements.

Successive Israeli leaders were unrepentant and pursued this course which eventually brought the final status negotiations to a standstill. In the meantime, Israel aggressively continued with its settlement building schemes in the West Bank and East Jerusalem. Washington did little to stem the tide. Netanyahu's recent announcement that Israel cannot withdraw to the 1967 lines is the culmination of a decade of policies aiming at disarming the Palestinian negotiator from everything. With this latest declaration we already know that Israel does not accept the right of return, the dismantling of settlements, ceding control of the Jordan Valley or of East Jerusalem. It also refuses to negotiate with President Mahmoud Abbas because he mended fences with Hamas.

Obama failed to mention the right of return in his latest speeches. We know he had already lost his altercation with Netanyahu over the settlements issue, and he deliberately evaded the subject of Jerusalem. Now he says he will not back down from his position regarding the 1967 borders. But what good is that to anyone?

In return, Obama, who last September predicted that the UN will welcome in one year the newly born state of Palestine, warned the Palestinians not to go to the General Assembly this autumn seeking recognition. He has offered the Palestinians nothing to cling on to. Perhaps this is one of the reasons why his special Middle East envoy, George Mitchell, chose to resign rather than oversee a futile process.

Netanyahu knows that he has irked Obama too many times. But he probably understands the nuances of American politics, in election mode, as well as his opponent. Obama will not risk a face-off with Netanyahu as he seeks re-election. If Netanyahu can change the rules of the game, if not the entire game, in the coming few months, then Obama or any other president will have to succumb.

But not all Israelis agree with their prime minister. There are those who believe Netanyahu is gambling with the solid US-Israeli alliance, ignoring the consequences of his actions. They point to the changing Arab world where a new and different Egypt is emerging. They warn of the growing schism which underlines the different perception of Israel between US politicians and ordinary Americans - many of them took offense at Netanyahu's continuous rebuff of their president.

The Palestinians can do little to influence Washington, not to mention Israel. Their best course of action now is to maintain their newly found reconciliation, form a national unity government and arrange for fresh elections. They must keep international sympathy to their cause and hope that Netanyahu's attitude will lead to Israel's isolation. And despite the current turmoil in the Arab world, they should find ways to boost regional support of their steadfastness.

On his recent visit to Washington and meeting with Obama, King Abdallah II warned that the Palestinian question remains the cornerstone of regional instability. But he also expressed pessimism about the prospects of reaching peace any time soon; definitely not this year. It is unlikely that Obama will heed the king's advice even when he appears to appreciate it in light of regional changes.

In the absence of the peace process and substantial negotiations, the fatal stalemate will give birth to alternatives. There is a breaking point for Palestinian patience and Netanyahu is making sure that we reach it soon. Clouding the issues will not change the fact that millions of Palestinians in the territories are under occupation and siege. Their national aspiration for liberation has not died down nor will it recede. Netanyahu may have buried the peace process but he has brought back to life the Arab-Israeli conflict, this time in a changing Arab world!