THE SEPTEMBER 26 DEADLINE ON ISRAEL’S MORATORIUM on Jewish settler building on the West Bank came and went with US officials still engaged in a feverish attempt to broker a compromise that would keep the fragile Israeli-Palestinian negotiating process alive.The crisis the Americans were trying to avert was very much one of their own making: President Barack Obama’s repeated public opposition to Israeli building meant that the Palestinians could not accept anything less. As a result, talks with the potential for historic transformation of the Middle East were at risk over an issue that, either way, would not have much impact on the bigger picture.On the table were three types of solutions: Time solutions – extending the freeze by a further short period, of up to three months, and making further extensions contingent on progress in the talks. Place solutions – building only in areas that would become part of Israel in any conceivable future peace deal. This idea was put forward by cabinet ministers Dan Meridor and Michael Eitan that got short shrift from the Palestinians who argued that to accept it would mean accepting Israel’s notion of final borders before negotiations had even started. American commitment solutions – that in exchange for Israeli and Palestinian acceptance of a construction compromise, the United States would give the parties guarantees of support on issues that were far more important to them. For example, backing Israel’s demand for recognition as the state of the Jewish people and its insistence on a strong military presence inside a future Palestinian state to protect its eastern flank, and giving the Palestinians a guarantee that it would support their demand for statehood along the 1967 borders with agreed land swaps, thereby rendering any construction in the West Bank largely irrelevant to the final outcome of border negotiations.Leading the compromise effort for Israel in the run-up to the September 26 deadline were Defense Minister Ehud Barak and Prime Minister Benjamin Netanyahu’s special peace envoy, lawyer Yitzhak Molcho. In Washington and New York, Barak had meetings with US Secretary of State Hillary Clinton, presidential adviser Dennis Ross and peace envoy George Mitchell, as well as with Palestinian Authority President Mahmoud Abbas. He also consulted by phone with Egyptian President Hosni Mubarak. The upshot was an outline for agreement that Barak would present to the Israeli government. At press time this had not yet happened and it was not clear whether Netanyahu would accept it.As he has so often in the past, Netanyahu found himself caught between his own right wing and heavy international pressure. He risked losing right-wingers if he extended the moratorium and international condemnation if he didn’t. Initially he seemed to play to the right-wingers – not extending the moratorium and appealing to Abbas to continue the talks regardless. “Let’s focus on what is really important for the future of both peoples. Let’s proceed in accelerated, sincere and continuous talks in order to bring about a historic framework agreement with a year,” he declared.On the face of it, though, Netanyahu could easily overcome his right-wing problem. If right-wing coalition partners balk, he could always bring in the centrist Kadima party instead, a move which would also facilitate the negotiating process. As for the more extreme right-wingers in his own Likud party, so far there seem to be no more than a handful in the Knesset, too few to threaten him as prime minister or as party leader.Netanyahu, however, still seems to be suffering from the trauma of the 1999 elections, when, abandoned by his “natural right-wing constituency” after the October 2008 Wye agreement with the Palestinians, he was heavily defeated by Barak. Again he fears making moves that could cost him a core base of support. Abbas, too, has problems. His raison d’être as president is to deliver statehood to his people. The aim is to do this through a winning combination of policies: building the Palestinian state from the bottom up and negotiating its international legitimacy with Israel, with strong backing from a sympathetic American administration. With a flourishing West Bank economy, an Israeli prime minister who is in a position to deliver and a committed American president, Abbas has identified a historic opportunity. Therefore, he would very much like to pursue the peace talks.On the other hand, there are strong, less patient voices inside his own Fatah party who insist on extension of the moratorium as a condition for resuming the talks, leaving him little room to maneuver. Not to speak of the rival Hamas, which depicts any negotiation with Israel as capitulation. Abbas’s solution: To rely on the US to work out an attractive package which he can present to the Arab League at its next meeting on October 4 in Cairo and get its imprimatur for further talks.So the deadline which was to have been in late September, has now shifted to early October. The good news is that all the parties – Israelis, Palestinians and Americans – agree that the peace talks are too important to be derailed by the construction side issue.The question is can they find a formula to keep the peace train on track.