Policymakers are being forced to ask if a Palestinian state is now impossible and what the outside powers, especially the Europeans, should do about it.
Hopelessness of a two-state solution leads to fresh ideas
No one is paying much attention to the Palestine issue these days. Coverage in the global media is perfunctory. What used to be a major issue in US-Israeli relations is now relegated to a sideshow by Iran and the Obama administration's focus on getting re-elected without any new Middle Eastern entanglements.
As Filippo Grandi, the Commissioner General of UNRWA, the United Nations agency that provides services for Palestinian refugees, put it last week in London: "Over the past seven years I have never seen all the avenues for political progress closed as they are now."
The political reality may be grim, but that does not mean that the ground is stable. In fact, the hopelessness of the situation is changing the terms of the debate about Palestinian statehood. Policymakers are being forced to ask if a Palestinian state is now impossible and what the outside powers, especially the Europeans, should do about it.
Yossi Beilin, the Israeli architect of the Oslo Accords that set the "peace process" in motion in 1993, now believes it is time to dismantle the Palestinian Authority. With no visible possibility for the Palestinians achieving statehood, he says it has become a fig leaf for Israeli control of the Palestinians.
Mahmoud Abbas, the Palestinian president, seems to be not far from agreeing with Mr Beilin. In a letter to the Israeli prime minister, Benjamin Netanyahu, he complained that his government had been "stripped of all meaningful authority" and "lost its raison d'être" thanks to continued Israeli settlement building. If the Israeli government could not commit to meaningful peace negotiations, he hinted he might dismantle the Palestinian Authority, thus forcing Israel to resume its obligations as the occupying power.
Would Mr Abbas do such a thing? It is a rare politician who destroys his own power structures to make a political point. But it would be a very strong political point: Israel would, in the eyes of global opinion, be placed in the role of apartheid South Africa, ruling a subject nation that in due course would become the majority population of Israel-Palestine.
Mr Netanyahu has not formally responded to the letter. But his government's riposte is clear: it has moved to recognise three supposedly "illegal" Jewish settlements on the West Bank.
This in fact is a formality, the so-called "outposts" having enjoyed the support of the Israeli state for years even without explicit recognition of their legal status. But if you look at the issue from a legal point of view, these are the first new settlements established by Israel in the West Bank since 1990, in defiance of promises to the international community that deems all settlements on occupied land to be illegal.
The upgrading of the three outposts has attracted criticism from the US, the UN Secretary General Ban Ki-moon and several European countries. But these protests are repetitive, formulaic and without meaning. Mr Netanyahu surely pays no heed to them, the politics of keeping his right-wing coalition together outweighing any consideration of what the rest of the world thinks.
Washington is unlikely to do anything in an election year, but there are signs of change in Europe.
At the British foreign office, there is a realisation that there is no point in continuing to issue empty statements, and some new thinking is required. The key questions focus on the EU aid to the Palestinian Authority and whether a two-state solution should now be recognised as no longer a viable outcome.
EU taxpayers continue to support Mr Abbas's Palestinian Authority, but what is the point if there is no possibility of a comprehensive solution? Isn't this the responsibility of the Israeli taxpayer or the Arab states? The question is all the more acute since the net effect of foreign aid is to divide the Palestinians: the West Bank under Mr Abbas gets the foreign funds, and Gaza, under the rule of Hamas, get nothing.
And if there is no chance of a two-state solution, what should be done in September, the first anniversary of Mr Abbas's bid for Palestinian membership of the UN? Under pressure from the Americans, Mr Abbas quietly dropped the bid, but he still has the option of seeking a vote in the UN General Assembly this year.
No one is predicting any breakthroughs, of course, but the field is open to new ideas. "We have to prepare for a long period where the paradigm of a comprehensive peace will not apply. The two-state solution is not applicable. But where is the Plan B?" asked Ahmad Khalidi, an expert on Palestinian security, during a meeting in London last week under the banner "Pitching for Palestine - new thinking for an old conflict".
Several Plan Bs emerged during the debate, some modest and some quite grand. Dr Khalidi said it was time to correct the mistakes of the Oslo process by including the refugees and focusing on Palestinian prisoners in Israeli jails.
Richard Horton, editor of the medical journal The Lancet, suggested a reality TV show set in a Palestinian village, which would educate the world to understand what it is like to be separated from health care by Israeli checkpoints.
Several speakers suggested ways in which the reality of Israeli control could be brought home to the Israeli public. Since Israeli law is applied to the West Bank, at least when arresting and trying Palestinians, then the world should stop treating the West Bank as a nascent state and see it as part of Israel under military rule.
Professor Ilan Pappe, the Israeli historian who now lives in Britain, said only a campaign of boycott, disinvestment and sanctions would have any effect on the Israeli political class. What Mr Netanyahu denounces as the "delegitimisation campaign" against Israel was a powerful tool, he said.
"Israel without its moral pillar is a country which half the population does not want to live in," he said. Set against them, of course, are the half million settlers in the West Bank and East Jerusalem who, thanks to decades of Israeli government support, have become a powerful and seemingly immovable political bloc.
On Twitter: @aphilps