How long can you beat a dead horse? The peace process died some years ago and the only humane thing to do may be to allow it to rest in peace. Indeed, it is questionable whether this is an opportune time to consider revival, when the future of peace with Egypt and Jordan hangs in doubt, Palestinian elections portend a possible Hamas takeover in the West Bank, and Hamas' radical mini-state in Gaza is the embodiment of every Israeli nightmare.

Peace with the Palestinians, however, including withdrawal from most of the West Bank, is not an Israeli favor to them but a vital self-interest. The entire Zionist dream of a Jewish and democratic state is increasingly threatened. Every additional settler makes a final agreement that much harder and at some point a viable two-state solution will no longer be feasible. Even if Israel retains only the settlement blocs in a final agreement, some four to six percent of the territory, it would still have to move over 60,000 people, an undertaking of increasingly questionable practicability.

The Zionist right, in its blind refusal to recognize demographic realities, is sowing the seeds of our own self-destruction. The Zionist left is no less misguided in its blind tendency to attribute the failure of the peace process solely to Israel, rather than focusing on the primary cause, the ongoing Palestinian refusal to recognize Israel as the nation-state of the Jewish people and accept that a Palestinian state can only come into being alongside Israel, not in its place. It was Zionism's pragmatism that led to its dramatic success as a national movement, in contrast with the obstinacy that has led to the utter failure of the Palestinian national movement. It is time to return to our roots.

Israel has correctly claimed for years that Palestinian reunification is a prerequisite for a final agreement, but that extremist Hamas is not a partner for talks, at least for the foreseeable future. Prime Minister Binyamin Netanyahu, however, has mis-positioned himself so that no one believes that his opposition to reunification is anything but a pretext for further forestalling talks. Instead, he should repeatedly stress the terms under which dialogue with the anticipated new Palestinian government would become possible, such as if it met the conditions set out by the Quartet.

Netanyahu is right that the Palestinians refused to negotiate and merely used his 10-month settlement freeze in 2009 to gain time. But instead of rejecting any further concessions on the settlements, why not again put the onus on the Palestinians by stating what Israel could do? For example, Israel could initiate a freeze that excludes the settlement blocs and Jerusalem, a position that would gain considerable understanding in the US and elsewhere, and that could then be made contingent on the sides' ability to reach predetermined negotiating milestones.

Israel is right to fear further concessions at a time of such regional turmoil and should use this to strengthen its claim for stringent security arrangements. Netanyahu's problem, however, has always been one of overreach. By saying no to everything, he ends up losing support even in those areas in which Israel could gain international understanding.

President Mahmour Abbas (Abu Mazen), like the late Yasser Arafat, is proving himself to be a diplomatic Houdini, a master at escaping all situations that might lead to agreement. Turning to the United Nations may provide a public relations victory but it will not lead to an agreement. For that, the Palestinians must talk to Israel, not the international community, and accept the reality that they too must make painful compromises.

Turning down Olmert's offer in 2008, much as Arafat turned down Ehud Barak's in 2000, is either an act of folly or an indication of much more malevolent intentions. Refusing to recognize Israel as the nation-state of the Jewish people 64 years after Israeli independence is a deeply troubling indication of the Palestinians' unwillingness to reach a true reconciliation and feeds Israel's fears that the negotiations are in fact not about the 1967 borders but about 1948. If Abu Mazen is serious about an agreement, he must begin preparing his people for the painful reality, long acknowledged by Palestinian negotiators in private but which no Palestinian leader has ever had the courage to say openly, that a "right of return" will be limited to the future Palestinian state.

Some believe that the best way to go forward is by beginning with the territorial and border issues, which are thought to be easier to resolve and which would inherently address the settlements. In reality, all of the core issues are inter-connected and should be addressed as part of an overall package. Neither side will make major concessions on these issues without knowing the contours of a final agreement on the others. Certainly, Israel cannot afford to make the territorial concessions inherent in this approach without knowing that the Palestinians will be willing to make the necessary concessions on the refugees and Jerusalem.

A two-state solution is and must remain the sole basis for a resolution of the conflict. Even if substantive progress is not realistic in the foreseeable future, the leaders on both sides could take important steps to keep it alive and improve the prospects for the future.-