For Israeli diplomacy, November was the cruelest month. What seemed only a technical United Nations upgrade for the Palestinians quickly turned into one of Israel’s worst-ever diplomatic defeats. And there could be more to come. The seemingly innocuous resolution granting Palestine the status of a “non-member observer state” could be a game-changer.

Once the resolution got to the UN General Assembly, where the Palestinians have a built-in majority, Israeli leaders knew they would not be able to stop it. So they tried to preempt by threatening the Palestinians with strong retaliation if they refused to back down. When that didn’t work, they switched to plan B: minimizing the Palestinian achievement by mobilizing a “moral majority” of Western democracies, especially in Europe, against it.

That didn’t work either. Of the 27 European Union member states, only one – the Czech Republic – voted against; 14, including France, Italy, Spain, Ireland, Austria, Greece, Belgium, Denmark, Finland and Sweden voted with the Palestinians; and 12 others, including Britain, Germany, the Netherlands and most Eastern European countries abstained. Overall, 138 UN members voted for Resolution GA11317, implicitly recognizing Palestine as a state. Fortyone countries abstained and only 9 – the US, Canada, the Czech Republic, Panama, Palau, Nauru, the Marshall Islands, Micronesia and Israel – voted against.

In explaining their decision to support the resolution, speakers in the General Assembly debate (which, ironically, took place on the 65th anniversary of the partition resolution on which the State of Israel is founded) said they hoped it would kick-start negotiations to end the conflict and contribute to the two-state solution both parties claim they want.

That set the stage for a second diplomatic beating. Arguing that in turning unilaterally to the UN the Palestinians had violated the Oslo Accords, Israeli leaders insisted that they too needed to show they could play the unilateral game in ways that could hurt. But by announcing plans to build in the controversial E1 area between Jerusalem and the West Bank settlement of Maale Adumim, Prime Minister Benjamin Netanyahu managed to antagonize virtually the entire international community. His action was seen as a blow to both the hoped-for resumption of negotiations and to chances for a twostate solution. A procession of Israeli ambassadors in Britain, France, Spain, Italy Sweden, Denmark, Greece and the EU in Brussels were severely reprimanded. British Foreign Secretary William Hague said there could be further steps, depending on what Israel did next. And although Hague made it clear that sanctions were not on the agenda, the word was mentioned.

Significantly, Hague also claimed to be acting in concert with the US It seems that Europe, with Washington’s approval, could be carrying an increasingly large stick.

The Americans are especially sensitive to E1. Both because they believe it could cut a prospective Palestinian state in half and because previous Israeli governments promised not to build there in advance of a detailed territorial agreement with the Palestinians. In 2002, then-defense minister Benjamin (Fuad) Ben- Eliezer of Labor signed the E1 master plan into law. But he promised the US that there would be no implementation and all further planning was duly frozen. The only exception was the building of a police station, which since 2008 has served as the Judea and Samaria district police HQ.

The Palestinians claim the Israeli plan would cut off East Jerusalem, their prospective capital, from the rest of the West Bank, and divide their state into two separate cantons, north and south, rendering a fair and viable two-state solution impossible. When E1 came up in the past, Israeli officials insisted that through the suburb of Abu Dis, East Jerusalem would still be connected to the West Bank. They also argued that a road connecting Bethlehem in the south to Ramallah in the north could be built around E1, in the Palestinian space between Maale Adumim and Jericho. Alternatively, they suggested, there could be Palestinian tunnels under E1 or flyovers above it. The bottom line for Israel is that Maale Adumim cannot be left as an isolated enclave in Palestinian territory, and, in any final settlement, must be connected to Jerusalem. The bottom line for Europe and the US is that all this should be left to negotiations between the parties, and not be part of a unilateral Israeli tit-for-tat.

In the midst of the diplomatic brouhaha, Netanyahu explained that there wouldn’t be building any time soon, and that all he had done was to give the go-ahead for preliminary planning. What happened next would depend on the Palestinians; he had put them on notice that further unilateral steps would cost them.

The bigger question though is why Israel got into this diplomatic mess in the first place.

By obtaining UN recognition as a state based on the 1967 borders, the Palestinians actually handed Israel the two-state model on a plate.

It could have welcomed the move and called for talks with reasonable terms of reference and American facilitation. That would have taken the sting out of references to the 1967 borders and enabled negotiations over land swaps; it would also have preempted possible Palestinian representations against Israel to the International Criminal Court. Instead, Israel can now be depicted as a state in occupation of another, and sidestepping talks to end it.

The Palestinians are playing their new status to the hilt. A week after the UN vote, Jordan’s King Abdullah paid a “state visit” to Ramallah.

In Hebron, Israel Defense Forces soldiers on a routine patrol were told to get out of Palestine.

Indeed, the new situation could impact adversely on Israeli-Palestinian security cooperation.

So what is Netanyahu’s game? The substance of it seems to be that despite his 2009 Bar -Ilan speech – in which he publically supported the two-state solution – and subsequent protestations, he does not really want it. His government is using the unilateral breach of Oslo argument to deny Palestinian President Mahmoud Abbas standing as a bona fide negotiating partner – so it won’t have to negotiate.

More importantly in the short term, Netanyahu believes that hanging tough with the Palestinians and the international community boosts his reelection chances on January 22. What hurts on the international stage, plays at home.

The message to the Israeli voters: A reelected Netanyahu will not allow the hypocritical international community to push him around; he will do whatever needs to be done to defend Israel from the Palestinian and Iranian threats; political rivals who decry his approach are not true patriots, who feed international criticism and will sell Israel down the river.

His opponents on the center-left respond that by not engaging the Palestinians, Netanyahu forced them to take unilateral steps; that he is isolating Israel; and worse – that he is condemning Israel to a one-state reality in which Jewish Israelis will soon be a minority.

The full impact of Abbas’s UN gambit will emerge after Israel’s Election Day. The key is with US President Barack Obama. Will he lead a diplomatic drive for two states for two peoples, exploiting the tailwind from the UN resolution and Europe’s newfound readiness to play a more active role? A lot will depend on the composition of the new Israeli government.

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