Arab nations have formally submitted a resolution to the UN Security Council that condemns Israeli settlement building in the occupied West Bank and East Jerusalem, which the United States will almost certainly veto if it is brought to a vote.
The initiative starkly illustrates not only the failure of America's Mid-East policy, but the Palestinian dilemma over which strategy to pursue in the quest for statehood.
"The American administration is of course aware that a veto wouldn't be a good solution," says a UN diplomat. "They'd be vetoing a resolution which is saying what the US administration has been saying for the last 18 months."
The Obama administration had made a settlement freeze the focus of its attempts to resurrect direct Israeli-Palestinian negotiations.
But Washington abandoned the effort in December after Israel's refusal to reinstate a partial moratorium on construction in the occupied territories.
Fresh bidThe Palestinians, however, have not - they've turned to the UN Security Council, arguing that Jewish settlements have expanded to such an extent that they threaten the possibility of a viable Palestinian state.
The Security Council has condemned the Israeli settlement project before. But not since 1980 have the Americans supported such a resolution, and they've traditionally vetoed others critical of Israel, their staunch ally.
It is not clear what they plan to do now. Their objection appears to be not so much to the text, as to the principle of taking the matter to the Council.
In the past 20 years, the framework for peace talks has shifted from the UN to a US-led bilateral process and the Americans want to keep it that way.
"We continue to believe strongly that New York is not the place to resolve the long-standing conflict and outstanding issues between the Israelis and the Palestinians," the US Secretary of State Hilary Clinton said recently.
Forced to chooseCrucially, the Obama administration has to navigate strong domestic support for Israel. Opposing or even vetoing the resolution would provoke its Arab allies, but it may prefer that to provoking the new Republican-dominated House.
The Israelis have dismissed the resolution as a Palestinian attempt to bypass direct negotiations, which, they say, is hindering attempts to reach a two-state solution.
"Israel has demonstrated time and time again its commitment to peace, and we hope that the international community won't allow these moves to divert both sides from reaching the real goal - peace and stability in our region," said Karean Peretz, the spokeswoman for Israel's UN mission.
Few if any here expect that a UN resolution demanding a halt to all settlement activity would stop Israeli construction - it hasn't in the past. The more critical question in UN corridors is what exactly the West Bank Palestinian leadership is trying to achieve.
Does it see the resolution as a way to return to the US-brokered negotiations?
Main motive?The Palestinian UN Ambassador, Riyad Mansour, says it's aimed at pressuring Israel to resume talks in "an appropriate and conducive atmosphere."
Others say the aim is to force the Americans to come up with proposals more acceptable to the Palestinians, who have long sought a US commitment to a state in the territory occupied by Israel in 1967, with its capital in East Jerusalem.
Or does the Palestinian leadership see the resolution as part of a new multilateral strategy?
This would return the Palestinian struggle to the foundation of UN resolutions, which have the force of international law, and seek a more direct role from the international community in ending the Israeli occupation and creating a Palestinian state.
With the stalemate in the American-led negotiations, Palestinian officials have indeed begun to pursue a more internationalist approach, lobbying for widespread recognition of their state. The plan is to request full membership at the UN when support reaches a critical mass.
However, just where the settlement resolution fits into this strategy, if at all, is not clear.
Big gamble"The question we have been pressing the Palestinians and Arabs on is - what happens the day after a US veto, then what?" says one Western diplomat. "How are you planning to take this forward? Are you then going to ask for statehood, what is the next step? And that's where we haven't got any clear answers."
What the Palestinians have is a fair bit of international support. An independent monitoring group, the Security Council Report, predicts that upwards of 100 nations would co-sponsor the settlement resolution, and most of the Security Council members would support it.
Given such global backing (seven Latin American states have recognised a Palestinian state in the last month), many Palestinians think their leaders should ditch an ally that they believe has protected Israel far more than it has them.
"The United States brokered arrangements starting in 1991 which have made the occupation probably semi-permanent," says Rashid Khalidi, Professor of Arab Studies at Columbia University in New York. "In the 20-odd years since the so-called peace process began, the number of settlers has increased from 200,000 to more than half a million."
The bottom line is that to bring the settlement resolution to a vote, the Palestinians would have to be ready to confront not only Israel, but the United States. It would be a real problem for the West Bank leadership to alienate its closest ally and main financier.
But polls show most Palestinians oppose a return to negotiations without some action on settlements, so it may be an even bigger problem for the leadership to do nothing.
