The third conclusion for the Palestinians is that no possible combination of governing parties in Israel is capable of signing an agreement with Abbas that will not entail significant compromises on the territorial integrity of a Palestinian state.
One US concession allowing Israel to maintain its hold on the Jordan Valley, nearly a fifth of the West Bank, for the forseeable future reflects a demand common to all Israeli politicians, not just Netanyahu.
In fact, the terms of Obama's letter were drafted in cooperation with Ehud Barak, Israel's defence minister and leader of the supposedly left-wing Labour Party. When he was prime minister a decade ago, he insisted on a similar military presence in the Jordan Valley during the failed Camp David talks.
Ariel Sharon, his successor and founder of the centrist Kadima Party, planned a new section of the separation wall to divide the Jordan Valley from the rest of the West Bank, though the scheme was put on hold after American objections.
Today, most Palestinians cannot enter the Jordan Valley without a special permit that is rarely issued, and the area's tens of thousands of Palestinian inhabitants are subjected to constant military harassment. B'Tselem, an Israeli human rights group, has accused Israel of a "de facto annexation" of the area.
But without the Jordan Valley, the creation of a viable Palestinian state even one limited to the West Bank, without Gaza would be inconceivable. Statehood would instead resemble the Swiss-cheese model the Palestinians have long feared is all Israel is proposing.
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