At the edge of Ramallah, the city runs into an area of brown fields and trees close to a roundabout overlooked by an ugly monument.

A well-known clash point where young men come to throw stones at Israeli soldiers and police,it has seen some of the most intense battles in a week of escalating violence between Israelis and Palestinians.

On Thursday there were new faces in the crowd: a group of schoolgirls and female students, some coming to the clash point for the first time, their faces wrapped in keffiyehs to hide their identities both from the Israelis and Palestinians who might recognise them and tell their parents.

The girls walk past burning tyres to a tree that screens them as the first few plastic-coated rounds are fired. They pick up stones to throw before the teargas drives everyone beyond the monument and in to the cover of the city streets.

It is not only in Ramallah that young women have been visible. A few days before in Bethlehem, at clashes outside the Intercontinental hotel near Rachel’s Tomb that followed the funeral of 13-year-old Abdul Rahman Shadi – shot by an Israeli sniper the day before – dozens of girls and young women were visible among the crowd.

In Ramallah the girls don’t want to speak or be photographed. Eventually they are persuaded to identify themselves with just a first name. Shahad, 20, is a student at al-Quds university. “This is my second time,” she says. “I came yesterday for the first time because it was forbidden before.”

A friend adds: “Now we feel encouraged to do this, so more girls are participating.” Yasmin, 15, still in her green-and-white striped school shirt, is with her friends from her school. “We want to protect our country,” she says. “We are here for one another and to look after each other. This is the first time for us. Everyone has to help and we are here to help the boys – it’s our duty to participate.”

“He [Palestinian president Mahmoud Abbas] promised a bombshell during his last speech, but we still haven’t seen anything,” a young woman told Agence France-Presse in another interview.

“The intifada continues because we stopped listening to the president a long time ago,” said a first-year literature undergraduate.

Amid the efforts to define what is happening in Jerusalem, in the occupied Palestinian territories and in Israeli towns with a significant number of Israeli citizens of Palestinian origin, it is easier to say what is different from the first and second intifadas so far.

What is happening now – despite the intervention of Ismail Haniyeh, the Hamas leader in Gaza, on Friday – is not organised in any meaningful sense. Unlike the first intifada, which began in 1987, no decision has been made to fund what is happening as it has emerged. Mahmoud Abbas has also asked the Palestinian security forces and Fatah’s armed wing to desist from joining in the violence, as the message he has delivered has largely been about avoiding any further escalation while supporting popular protest.

They see the possibility of an intifada and they want an intifada, and in the end it is possible they will have one Unnamed Palestinian official

The attacks on Israelis that have occurred both in recent weeks and in the last year have been different from the second intifada and its suicide bombers from different Palestinian factions. Attacks have been limited to low-tech assaults using knives and screwdrivers, and assaults involving cars, most often in what Israel’s security forces call “lone-wolf attacks”.

The presence of the girls, many well dressed, suggests another difference – one that has been noticed by Palestinian officials. “Half the people going to clashes I would say are affiliated to Fatah. But it is a very interesting process. Even the young people affiliated to Fatah are not tied to the Palestinian Authority. They are educated. They are reading history.

“They are coming not because of a particular ideology – like that of Hamas or the PFLP [Popular Front for the Liberation of Palestine] – but out of a romantic notion of a national movement. They see the possibility of an intifada and they want an intifada, and in the end it is possible they will have one, and they think that the Palestinian Authority will have no choice but to start funding one.”

What is happening – and on both sides – is more subtle and potentially profound than simply a wave of violence, whatever the definition that is applied to it and regardless how long the current cycle lasts.

It is – as both Israeli and Palestinian commentators noted last week – a reflection of deeper shifts in both Palestinian and Israeli society. In the midst of a failure of political leadership on both sides as well as in the international community, it threatens to change the decade-long dynamics that have governed Israeli-Palestinian relations.

That change was summed up last week by Amos Harel, the military correspondent of the newspaper Haaretz.

“At this point, it is clear we are standing on a slippery slope,” he said, adding that fresh lethal attacks could “release violent energies that the two sides have generally managed to keep on a low flame over the past decade”. In the past week, evidence of the potential for the new “violent energies” cited by Harel have become more and more apparent.

A call by Jerusalem’s mayor, Nir Barkat, for all Israeli citizens with gun licences to carry their arms – following footage of Barkat himself touring east Jerusalem neighbourhoods carrying an assault rifle – has seen more weapons on show in the city. The febrile atmosphere has seen assaults by Jews on Arabs, including a stabbing attack in Dimona, and far-right Jewish demonstrators taking to the streets chanting “Death to Arabs”. It is a continuing increase in Jewish extremist violence that has been blamed by some Israeli security sources for escalating the problems.

“The violence of Jews against Arabs this time has reached a scale the likes of which we cannot remember,” one unnamed officer told the Israeli columnist Nahum Barnea in Yedioth Ahronoth last week. “Israelis uprooted hundreds of the Arabs’ olive trees, demolished houses, vandalised cars. Violence spurs counter-violence.”

And while the proximate and much cited causes have been well rehearsed – including the recent tensions at Jerusalem’s most holy site known to Muslims as the Noble Sanctuary and Jews as the Temple Mount; a moribund peace process and the steady drip of violence – a combination of two other factors is driving the escalation. On the one hand is the sense that the current situation – which has seen the Israeli prime minister, Binyamin Netanyahu, attempt to “manage the conflict” while frustrating peace negotiations by continuing settlement and occupation – is no longer tenable.

On the other is the increasing impression that both Netanyahu and Abbas have boxed themselves into respective corners, worn out their strategies, and been left with increasingly little space for manoeuvre.

On Abbas’s side, that has meant a long-term policy of avoiding conflict, including via security cooperation with Israel, in the hope that the result will be international pressure on Israel towards a Palestinian state, a policy that many now believe has failed.A recent report by the Palestinian Centre for Policy and Survey Research found that two thirds of the Palestinian public want Abbas to resign, while a growing number of Palestinians also said they supported “armed resistance” against Israel. His perceived failure has seen many Palestinians compare Abbas unfavourably with his predecessor, Yassir Arafat, with an increasing nostalgia that is reflected in the many T-shirts at clashes bearing Arafat’s face.

“Abu Mazen [Abbas] does not want a third intifada,” Hasan Qureishi, deputy speaker of the Palestinian Legislative Council, told the Observer last week at the funeral in Tulkarem of a Palestinian youth killed in a clash. “You hear the comparison with Yassir Arafat. Arafat made things happen. Abu Mazen reads the news.”

“He doesn’t believe in mobilisation,” said another official. “And he doesn’t want to see Palestinian children dying. But his formula has failed. His speech last month to the UN general assembly reflected that.”

If Netanyahu’s problems are different, the dynamic is the same. He dissolved his previous government last December, declaring it too unruly and choosing to court a national religious and pro-settlement right during the election campaign to form a “natural” rightwing government in which he felt he would be more comfortable.

But the blank cheques he wrote during that campaign – including the warning about Arab voters coming out in “droves”; the appeal to settlement building and the promise that no Palestinian state would emerge on his watch (later disavowed) – have come back to haunt him. Netanyahu has vacillated between trying to please rightwing hardliners and opposing them as the frictions have escalated dangerously.

Now it is his “natural” rightwing allies who seem unruly – not least the visitors to a pro-settlement protest camp outside his house that included cabinet ministers from his coalition allies and members of his own Likud party – as he called last week for a “national unity” government. Indeed, it was Netanyahu who allowed the construction minister, Uri Ariel, to resume his visits to the Temple Mount after a nine-month gap – one of the sparks of the recent conflict. Only last week did Netanyahu move to ban MPs and ministers from the site.

What the past week has also dramatised in the starkest terms is how the new reality of low-tech and unorganised attacks by individuals, including residents of east Jerusalem and now Israeli towns, has imposed itself beyond an Israeli separation wall which was built at huge cost to stop suicide bombers.

Instead the latest wave of confrontation has redefined the notion of asymmetry in the Israeli-Palestinian conflict. The individually motivated nature of the attacks have both blindsided Israel’s domestic intelligence agency and police, and left politicians with no obvious enemy to pursue. Lacking formal backing and support, the current escalation on the Palestinian side could very well subside, although the conditions that have prompted it will inevitably remain.

Both sides of the divide are acutely aware that under the present set of circumstances, another serious incident perpetrated by either side could yet again dangerously change the dynamics. There is the that risk factions such as Hamas, whose leader in Gaza, Ismail Haniyeh, endorsed an intifada on Friday – could enter the clashes. That fear was heightened the morning after it was announced that a 25-year-old member of the group in Shuafat refugee camp in east Jerusalem died after he was shot during an exchange of gunfire with the Israeli security forces.

As two more Israelis were stabbed and their assailant shot, there is little sign that the current violence will abate.