The Obama administration placed the attempt to solve the Israeli-Palestinian protracted conflict high on its foreign policy agenda from the very beginning (January 2009). Yet, American diplomacy has failed to restart negotiations between Palestinians and Israelis and even if the US is successful in re-launching bilateral talks the chances of reaching an agreement and implementing it at this stage are nil.

The main problem is the split between the PLO-ruled West Bank and the Hamas-ruled Gaza with very little chance of the two areas becoming one political entity. It is the Israeli routine counter-terror activity that makes sure that Hamas does not take over the West Bank. The competition between the West Bank and the Gaza leaderships stiffens positions on the issues pertaining. Mahmoud Abbas refuses to enter direct negotiations, although he seems to inch toward proximity talks with Israel, while Hamas is still dedicated to the destruction of the Jewish state.

Abbas in his May 2009 Washington Post interview emphasized that he is in no hurry to negotiate with Israel and that he expects the Americans to force Israel to accept the Palestinian conditions. His prime minister, Salam Fayyad, announced a plan to unilaterally establish a Palestinian state in two years instead of a state emerging from negotiations with Israel. Both "moderate" leaders honor suicide bombers as martyrs and provide their families with state pensions. They allow the PA-controlled media, education system and mosques to continue to promote rabid anti-Semitism. Both reject recognition of Israel as a Jewish state. The Palestinians seem to have a great territorial appetite and historically, they have displayed a lack of political pragmatism that is a prerequisite for reaching a compromise. As long as Islamist Hamas has a powerful grip on Palestinian ethos and aspirations, and as long as its ruthless rule over Gaza continues, Palestinian politics are hostage to the extremists and are unable to move toward an historic compromise with the Zionist national movement.

The belief that American pressure can change the positions of the protagonists in the conflict is also ill-founded. Outsiders have little influence and peace can be reached only if the parties are ready to do so. The main breakthroughs in Arab-Israeli relations, the visit of Egypt's president, Anwar Sadat to Jerusalem (1977) and the Oslo agreements between Israel and the PLO (1993), were result of bilateral interactions in which the Americans were not involved. Outsiders have limited ability to induce change in how Middle Easterners conduct their business, as recent American experiences in Iraq and Afghanistan indicate.

Moreover, Obama's behavior has not been helpful. He has insisted on a comprehensive settlement freeze, which the Palestinians turned into a precondition for sitting at the negotiation table. Recently, Obama's administration has demanded to stop Israeli building in Jerusalem. So far these demands have backfired, indicating Washington's limitations in imposing its will on Jerusalem. Furthermore, when the US promised to secure Arab gestures as a quid pro quo for Israel's concessions, Washington was unable to deliver, indicating again the limits of American clout in the region.

Unfortunately, the heyday of American influence in the Middle East is over. When American diplomacy is not backed by "hard" power, the "soft" power extolled nowadays by Washington carries only little weight with the realpolitik oriented Middle Eastern elites. Most capitals of the region regard Obama as weak. This does not augur well for American diplomacy, as even the weak Palestinians are able to say NO. Moreover, American diplomacy can hardly make a dent in the schism within Palestinian society that is the main stumbling block for progress in peace making. Similarly, The US ill-advised when it tries to pressure the Israeli government to make concessions in Jerusalem. This is probably the best issue any Israeli government can find in order to make a stand against Washington.

European involvement is also not helpful. The EU basically nourishes unrealistic Palestinian goals, such as the division of Jerusalem, instead of encouraging greater Palestinian pragmatism and flexibility. Moreover, its generous financial aid spares the Palestinians the need for making more efforts to create the political conditions conducive to economic growth. The EU largely maintains a bloated and corrupt Palestinian bureaucracy. The aid to Hamas-ruled Gaza is particularly disturbing because it helps the Jihadist Hamas to stay in power and sustains the war waged by the Hamas entity against democratic Israel. The March visit of the EU foreign policy chief Katherine Ashton to Gaza on the very day Gazans launched deadly missiles to Israeli towns is a recent example of European misguided policy. European money to Gaza also undermines the attempt for preferential treatment to the West Bank, which is allegedly ruled by moderate elements.

Blaming Benyamin Netanyahu for the current impasse assumes that the insatiable Palestinians must be placated at the expense of vital Israeli security interests, such as demilitarization of the West Bank and maintaining Israeli control over the Jordan Valley and Greater Jerusalem. Ascribing responsibility to Netanyahu for the lack of progress in the Israeli-Palestinian track also wrongly assumes that the Palestinians have displayed flexibility in their approach to Israel. Yet it is the Palestinians who are not ripe yet for peacemaking. Even Netanyahu's decision for the ten-month freeze on building in the settlements, an unprecedented Israeli concession, was rejected by the Palestinians.

Netanyahu believes that progress on the road to peace can only be achieved by a slow process of institution-building and economic growth beginning from the bottom-up. Indeed, his government has done its best to facilitate economic growth in the West Bank by removing dozens of roadblocks, thereby putting the lives of Jews at risk, and by supporting international and Palestinian economic activity. Moreover, the Israeli prime minister declared at every opportunity his willingness to enter into unconditional talks with the PA and has even accepted proximity talks despite Israel's traditional insistence on direct talks.

True, Netanyahu's conditional acceptance of the 2-state solution was Netanyahu's was accompanied by demands for demilitarization and secure borders. Netanyahu government's cautious approach toward the Palestinians enjoys large popular support and his Bar-Ilan address was endorsed by over 70 percent of Israelis. Indeed, most Israelis display a realistic appraisal of the nature of the Arab-Israeli conflict. According to a recent poll, 82% of the Israelis regard the claim that Israeli withdrawal to the 1967 lines would bring peace for generations since the Arabs would no longer have any claims against Israel, as a naïve and simplistic. Such views indicate the need for caution and popular support for the current Israeli government. This public mood makes also Israel less vulnerable to outside pressure.

So far, those advocating great Israeli territorial concessions to the Palestinians in order to bring peace have been proven wrong. Two Israeli prime ministers offered to cede virtually all of the disputed territories. The offers of Ehud Barak and Ehud Olmert were respectively rejected by Arafat in 2000 and ignored by his successor, Abbas, in 2008. Moreover, in 2000 the Palestinians launched a campaign of terror and recently they have threatened to renew it. Similarly, after the Sharon government unilaterally withdrew from Gaza and dismantled all settlements in 2005, the Gaza Strip was converted into a launching pad for intensified missile attacks.

Unfortunately, a large part of the international community fails to understand that the ethnic conflict waged in the Holy Land will end only when the parties will tire. So far, Israelis and Palestinians still have energy to fight for what is important to them. Therefore, peace is not in sight.

The author is professor of political studies at Bar-Ilan University and director of the Begin-Sadat (BESA) Center for Strategic Studies.