But despite outward signs, Netanyahu is less alone than he looks -- and far from ready to compromise.
He has the bulk of the Israeli public behind him, helped by media moguls like his friend Sheldon Adelson who are stoking the national mood of besiegement and victimhood.
But most importantly he has a large chunk of Israel's security and economic establishment on his side too.
The settlers and their ideological allies have deeply penetrated the higher ranks of both the army and the Shin Bet, Israel's secret intelligence service. The Haaretz newspaper revealed this month the disturbing news that three of the four heads of the Shin Bet now subscribe to this extremist ideology.
Moreover, powerful elements within the security establishment are financially as well as ideologically invested in the occupation. In recent years the defense budget has rocketed to record levels as a whole layer of the senior military exploits the occupation to justify feathering its nest with grossly inflated salaries and pensions.
There are also vast business profits in the status quo, from hi-tech to resource-grabbing industries. Indications of what is at stake were illuminated recently with the announcement that the Palestinians will have to buy from Israel at great cost two key natural resources -- gas and water -- they should have in plentiful supply were it not for the occupation.
With these interest groups at his back, a defiant Netanyahu can probably face off the US diplomatic assault this time. But Kerry is not wrong to warn that in the long term, yet another victory for Israeli intransigence will prove pyhrrhic.
These negotiations may not lead to an agreement, but they will mark a historic turning-point nonetheless. The delegitimization of Israel is truly underway, and the party doing most of the damage is the Israeli leadership itself.
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