Arabs are awaiting Israel's parliamentary elections with a mixture of apprehension, indifference and an understandable preoccupation with their own turbulent affairs at a time of extraordinary change.

Barring surprises, Israel's new prime minister will again be Binyamin "Bibi" Netanyahu, who has presided over a Likud-led coalition since 2009, continued to expand settlements and failed to engage with the Palestinians - while waging one short war in Gaza and threatening another over Iran's nuclear programme.

Netanyahu's new team will promote settlements and oppose an independent Palestinian state - and is also likely to include Naftali Bennet's openly annexationist Jewish Home party. "The days of bulldozers uprooting Jews are behind us, not ahead of us," Bibi pledged in one of his final campaign interviews.

To measure just how far Israeli politics have shifted to the right it is worth recalling that 2013 marks the 20th anniversary of the Oslo accords in which Israel and the PLO recognized each other. Prospects for reaching a two-state solution are fading fast.

Inside Israel expectations of a revival of the peace process are zero. Jews have lost hope or interest in it, or actively oppose it, and Palestinian citizens look set to shun the election en masse. Palestinians in the West Bank have no vote and no say, as has been the case for the last 45 years.

"The new elections are going to result in more proliferation of settlements, more creeping annexation and less Palestinian access to East Jerusalem as a future capital of Palestine," was the bleak summary of the veteran Arab league diplomat Clovis Maksoud. "The competition among..right-wing parties lies in how quickly they can expedite the annexation of the West Bank." Mainstream Arab media comment and political discourse agrees.

Yet near certainty about Israel's political map is matched by profound uncertainty about a region still convulsed by the Arab spring. Bashar al-Assad's grip on Syria is loosening while Egypt is approaching the second anniversary of Hosni Mubarak's overthrow under a Muslim Brotherhood president and in a state of unprecedented polarization. Jordan's elections are being boycotted by Islamists. The Gulf states are jittery. The effect of regime change in Libya is being felt in Algeria and beyond.

Relations with the Palestinians and Arab states used to be part of the business of electing an Israeli government. Victory for Yitzhak Rabin's Labour Party in 1992 changed the parameters of the conflict. In the past there was even talk of agreement with Syria as an alternative to a deal with the Palestinians. It may never have been very likely but it is clearly not on the cards now when the very future of Assad's regime is in doubt.

Attitudes have hardened on both sides of the old "green line." Palestinian president Mahmoud Abbas attracted plaudits in Israel and anger amongst his own people when he promised there would be no third intifada and that he would forgo the right to return to his home town of Safed – inside pre-1967 Israel.

But his successful pursuit of enhanced Palestinian status at the UN and Israel's announcement of the new settlement project in the "E1" area - designed to encircle Jerusalem - have underscored the divide. Abbas stayed silent during Israel's election campaign, but a senior aide warned bluntly of "an apartheid-style" state if the right takes the helm.

So with no prospect for meaningful negotiations between Abbas' moribund Palestinian Authority and Israel, demands are growing for reconciliation between the PLO and Hamas. It is, Maksoud concluded, "imperative to reunite the leadership of the Palestinian people immediately, before it is too late, to devise a strategy of… resistance and to entreat the new government of Egypt to consider revising the treaty (with) Israel." In recent days there has been a surprisingly upbeat note from Jordan's King Abdullah, who inherited the 1994 treaty with Israel from his father Hussein. "I feel [Netanyahu] understands what must be done to achieve the two-state solution," he said. "But there is a gap between what he says and the measures taken by the Israeli government." Abdullah's observation that the elections in Israel "represent a new opportunity to resolve the conflict" sounded suspiciously like wishful thinking.

Cairo and Amman look unlikely to abandon their treaties with Israel – the consequences for relations with the US would be too severe. But it is worth watching to see whether Arab states will maintain their collective commitment to the 2002 Arab Peace Initiative. Its central pledge is recognition of Israel within its 1967 borders - if a just solution is agreed with the Palestinians. In past times of crisis there has been pressure in the Arab League to take it off the table. That has been resisted – so far.

It is no surprise that there is awareness of the need for urgent and concerted international action if the two-state solution is to be coaxed back to life. Britain and France are working on an initiative to be backed by the European Union and the Arab League – and, it is hoped, the United States in Barack Obama's second term. It is clear in any event that the age of Oslo-like incrementalism with a distant goal held hostage to endless process is over. But with Netanyahu poised to return to power at the head of a more right-wing and uncompromising government than Israel has ever seen before, the Palestinians divided and the Arab world distracted, no-one is holding their breath about the prospects for peace.