Israeli Prime Minister Benjamin Netanyahu. Credit:AP I recall a conversation about 12 years ago with an Australian business leader, just back from Israel. He held out some hope for a negotiated peace. "But what about the settlements?" I asked. At the time I was premier and patron of Labor Friends of Israel. "Bob, don't worry. If the Israeli people get a peace deal they will withdraw the settlements." Next time I looked settlement population numbers had soared another 150,000, something which left me with the distinct impression of having been conned – no, having been lied to – by the Israel lobby. Sure we subscribe to a two-state solution, they insist, but while you're looking the other way we're spreading settlements as fast as possible to render it impossible.

The US ambassador to the UN Samantha Power addresses the UN Nations Security Council, after the council voted on condemning Israel's settlements. Credit:UN/AP Both Labor and Likud governments have funded settlers, many religious extremists, and gifted them the best land. Meanwhile, Palestinians are denied building approval for homes, even a chicken coop. If in Area C they throw up a granny flat it's promptly demolished by army bulldozers. If Israel is really open to giving the land back in a peace deal why allow settlements in the first place? That's the question, if I'd been sharper, I would have put to my interlocutor. And settlements not just along the border. Thirty-five per cent are now being approved deep in the territory everyone sees as an ultimate Palestinian state. This is the essence of the boiling US frustration that resulted in America refusing to veto Friday's Security Council resolution.

John Kerry told the Senate Foreign Relations committee that within days of a peace deal in 2014 along came an announcement of 700 new settlement units. "Poof!" he said, the deal got blown sky high. Barack Obama's envoy and former US ambassador to Israel, Martin Indyk​, confirms settlements destroyed the deal. Obama has said the same. Hence this parting gift by the outgoing President to a headstrong Israel. Historically the aged and corrupt Palestinian leadership has to bear some responsibility. They've let their people down. But right now the Palestinians are offering a demilitarised state – a Palestine without an army – and Western peacekeepers within their borders. It is hard to imagine more explicit security guarantees. Sixty per cent of the Netanyahu cabinet – the most chauvinist in the nation's history – are on record opposing a two-state solution. In other words, they want an indefinite occupation. Settlements are vital to their design – backed by demolitions and land confiscation, nothing less than a creeping annexation. That means a majority Arab population – 83 per cent of the West Bank – being ruled by a racial and religious minority of 17 per cent.

The Israeli newspaper Haaretz referred this year to "the evil winds of racism and nationalism sweeping Israel". General Yair Golan​, Israel's No.2 soldier, said the tone of the nation reminds him of Europe between the wars, and he was talking at a Holocaust commemoration. Two former prime ministers, Ehud Barak and Ehud Olmert,​ have warned their country risks getting saddled with apartheid, proving again that searching argument and criticism are among Israel's most resilient features. But often nations under stress end up adopting the policies their enemies would most want. In this spirit Benjamin Netanyahu is sleepwalking to a nasty denouement: a Greater Israel, with an Arab population living under different laws, above all, with no right to vote. Israeli Labor policies are not a jot different. The Security Council resolution demands that the world now treat settlements differently from the rest of Israel. Europe was already mandating identification of products from settlement industries, giving consumers in Ireland or France the opportunity to decide whether they want to support illegal activities when they chose a product on a supermarket shelf.

The resolution has undermined the nationalist strategy that says Israel can lose Europe but enjoy new partnerships in Asia and Africa and with Vladimir Putin. In the end not only France and Britain but Russia and China voted to brand settlements flagrantly illegal. Netanyahu is left vowing retaliation against plucky little New Zealand and Senegal. Donald Trump can tweet and bluster. But the resolution stands as international law, to be taken seriously by cabinets and bind the International Criminal Court. After years of provocation by Israeli hawks that's the genius of what Obama and Kerry have pulled off. If Israel responds with more settlements, or annexes slabs of the West Bank, then UN agencies and member states have to decide how to react. Leave that "how" to another day. In the meantime consider the following motion, an elegantly simple one: "Given that Israel continues to defy the 2016 resolution of the Security Council and spreads settlements so that a Palestinian state is no longer possible we move that every resident of Greater Israel be afforded equal rights. This includes the right to vote in national elections."

How would you vote on that motion – in a parish council or church synod? At a union or party conference? A council meeting? On a campus? Loading And what happens next? Bob Carr is a former foreign minister and NSW premier and a patron of Australian Labor Friends of Palestine.