With Mideast peace talks adrift, the US searches for Plan B

Soon after the US announced last week it would abandon an 18-month demand for an Israeli settlement freeze to advance peace talks with the Palestinians, state department spokesperson PJ Crowley insisted that the US would not start over with a blank slate.

But after US envoy George Mitchell wrapped up a regional trip with little to show for it, the Obama administration's engagement with the Palestinian-Israeli negotiations appears rudderless. Palestinians say trust in the US mediation is running out.

"Up until now the Americans haven't fulfilled anything that they promised to the Palestinian leadership: George Bush promised at Annapolis that within two years there would be a Palestinian state. President Obama talked about freezing settlements, and now he is giving up,'' says Hana Sinora, the codirector of the Israel Palestinian Center for Research and Information. "[Palestinians] don't believe that the US will be able to squeeze anything out of (the) present government.''

Arabs reject talks without ground rules

The US wants to hold indirect talks on the final status issues of a final peace settlement – Jerusalem, borders, and refugees. But this week the Palestinians and the Arab League rejected this meaningful indirect talks unless there's a commitment upfront to a territorial compromise based on the 1967 borders.

"Going back to indirect talks without any terms of reference gets you back to the same square. So what's the point? So we will go nowhere,'' says one Palestinian negotiator. "What is new in the pocket of Washington? We have very few answers.''

At a Cairo meeting Wednesday night of the Arab League's committee to monitor the peace process, leaders who are usually guarded when it comes to discussing US handling of the talks were uncharacteristically blunt.

Qatari prime minister Sheikh Hamad bin Jassim al-Thani said he "did not expect anything'' from the United States. Arab League Secretary General Amr Moussa said the body won't back new negotiations "until a serious proposal is made for an end to the Arab-Israeli conflict.''

The Arab frustration is a function of the dashed expectations following President Barack Obama's declaration in early 2009 of opposition to settlement expansion. Washington's failure to successfully bring Israeli settlement expansion to a halt was deeply disappointing to regional leaders.

Israeli grumbling

Israel, which is concerned that it will be blamed for the breakdown, is trying to show that it is working with the US to find a way forward. In doing so, it has dropped its opposition to discussing the core issues of a peace treaty through a US third party.

But an Israeli official acknowledged that it is still unclear whether the format for those discussions will follow Israeli demands to discuss security issues first or to tackle other issues simultaneously. Adding to the uncertainty, the US dispatched Dennis Ross to Israel to discuss a peace deal.

"I have no idea of how they are dividing their work. Are they working in parallel?'' said the official. "There is plurality in Washington.''

The uncertainty has left foreign diplomats in the region grumbling about the US mediation effort, observers say. The lack of progress has hurt American prestige in the region and even led some to question whether Washington should remain the sole mediator. But despite America's diminished standing, Washington remains irreplaceable in the process.

"The Israelis aren't going to listen to anyone else,'' said one diplomat, ''and the Palestinians know there isn't anyone else that can deliver the Israelis.''