As America drops its demand for a total freeze on the building of Israeli settlements in the West Bank, angry Palestinians say there is no scope for resuming talks

Illustration by Peter Schrank

FIVE months after Barack Obama went to Cairo and persuaded most of the Arab world, in a ringing declaration of even-handedness, that he would face down Israel in his quest for a Palestinian state, American policy seems to have run into the sand. The American president's mediating hand is weaker, his charisma damagingly faded. From the Palestinian and Arab point of view, his administration—after grandly setting out to force the Jewish state to stop the building of Jewish settlements on Palestinian land as an early token of good faith, intended to bring Israelis and Palestinians back to negotiation—has meekly capitulated to Israel.

The upshot is that hopes for an early resumption of talks between the main protagonists seem to have been dashed. Indeed, no one seems to know how they can be restarted. The mood among moderates on both sides is as glum as ever.

Mr Obama's secretary of state, Hillary Clinton, made matters worse by actually praising Israel's prime minister, Binyamin Netanyahu, for promising merely to “restrain” Israel's building rather than stop it altogether, as he was first asked to do. Previously Mrs Clinton had insisted that stop meant stop. There should be no “organic growth” of existing settlements and no exceptions for projects under way. Nor did she specifically exempt East Jerusalem, which Palestinians view as their future capital but which many Israelis see as theirs alone. And she had earlier castigated Israel for demolishing Palestinian houses in the city's eastern part. Now, in Israel on October 31st, she changed her tune, seeming to acquiesce in Mr Netanyahu's refusal to meet those earlier American demands and congratulating the prime minister on his “unprecedented” offer to build at a slower rate than before.

Mr Netanyahu's case is that being “prepared to adopt a policy of restraint on the existing settlements” is indeed a concession. No new settlements would be started, no extra Palestinian land appropriated for expansion. But some 3,000 housing units already commissioned must, he said, be completed. Building must go on in East Jerusalem, he has repeatedly said, as it cannot be part of a Palestinian state.

Mrs Clinton later awkwardly backpedalled, assuring the Palestinians that she still considered all settlements “illegitimate”, while pleading with them to resume talks. That seems unlikely. A storm of abuse raged in the Palestinian and Arab press. Mr Obama, it was widely deduced, had caved in after his own ratings in Israel had slumped, according to some Israeli polls, to as low as 4%. Mahmoud Abbas, the head of the Fatah party who presides over the Palestinian Authority in the West Bank, expressed extreme disappointment—and continued to insist that talks could not resume until there was a full building freeze.

Among Palestinians at large, Mr Abbas has been derided for putting his faith in the new American administration. Hamas, the Islamist movement that runs the Gaza Strip, the smaller of the two main parts of a future Palestinian state, mocked him for ever thinking that Mr Obama could change American policy towards the Middle East.

Last month he called a general and presidential election for January 24th. But with opinion polls showing his popularity diving, on November 5th he said he would not stand for re-election. Hamas, in any event, said it would refuse to take part in the polls. Mr Abbas, it seems, has been forced to acknowledge that his authority—and his ability to grapple with the Israelis in negotiations if they had resumed—has been eviscerated.

Besides, even if talks did start again, no agreement would stick without the acquiescence of Hamas, which won the last Palestinian election, in 2006, and is still strong enough to kibosh any deal done without it. Yet discussions between the two rival groups, under the aegis of the Egyptians, have been stuttering along for more than a year without getting anywhere.

Mr Netanyahu, on the other hand, was cock-a-hoop. The right-wing and religious ministers who make up the bulk of his coalition government can scarcely believe his luck. The prime minister is riding high in the Israeli people's esteem. Building work is proceeding apace in many of the settlements. He looks as if he has emerged unscathed from a brush with a hostile American president.

Mr Obama is being criticised, even by Israelis and Americans on the left, for making demands of Mr Netanyahu that he should have known would never be met. Some say the president should himself fly to Israel to address the Israeli people directly with a game-changing plan of his own. But no one, least of all in Washington, seems to know what that might be.