The prime minister, Binyamin Netanyahu, emerged victorious in early December as the US formally abandoned its efforts to persuade the government to renew a West Bank settlement freeze in order to meet Palestinian conditions for resuming direct peace talks. Whether the victory is real or pyrrhic, however, will only become apparent over the coming months. On the one hand, Mr Netanyahu was spared a likely coalition crisis caused by dissent on the part of his right-wing coalition partners. On the other hand, Mr Netanyahu risks accentuating Israel's diplomatic isolation. There is also the danger of a minor coalition crisis, given that the dovish Labour Party is upset about the lack of progress on the Palestinian issue.

In fact, the initiative to re-start the peace talks had effectively expired weeks before the formal US announcement on December 9th, after Mr Netanyahu had failed to gain sufficient support in the cabinet for the proposed 90-day freeze-despite the sweetener that the US had offered to Israel of fighter jets and diplomatic assurances. The bickering inside the Israeli government did not, in any case, bode well for a successful resumption of the peace talks. To complicate matters further, the Knesset approved legislation on November 23rd requiring either a super-majority or a referendum in the event of any future agreement to cede East Jerusalem or the Golan Heights. While Washington was bogged down in negotiations with Israel, the Palestinians unhelpfully stood on the side and raised new conditions. Although Palestinian negotiators were quick to voice their disappointment at the US retreat on the settlement freeze, the Palestinian president, Mahmoud Abbas, had appeared relatively unenthusiastic about prospects for the talks throughout the entire process.