Let's tally the diplomatic benefits that have accrued to Israel since Prime Minister Binyamin Netanyahu's November 25 announcement of a 10-month moratorium on new settlement construction. That statement followed tardily on his June 14 address at Bar-Ilan University formally accepting the creation of a demilitarized "Palestine" as the endgame to negotiations. Since the freeze was announced, US Special Envoy George Mitchell has managed to contain his enthusiasm. While acknowledging that Netanyahu has gone further than any previous Israeli leader, Mitchell could bring himself to say only that he wants to see permanent status negotiations resume "as soon as possible." To which Mahmoud Abbas essentially responded: "I don't think so." In an interview with a Washington-based think tank, Mitchell did at least reiterate Secretary of State Hillary Clinton's recent statement that negotiations should be "based on the 1967 lines with agreed swaps." This is significant, because the Obama administration had previously been seen to be backing away from George W. Bush's April 2004 letter to prime minister Ariel Sharon, in which the former president said a negotiated outcome would have to be based on a 1967-plus formula. Unfortunately, in an extraordinary tactical blunder, Netanyahu allowed consensus settlement blocs to be included in his freeze. THE administration's minimalist response to Netanyahu's two historic announcements, along with its failure to persuade Arab governments to take steps toward normalization with Israel and demonstrate that the Arab Peace Initiative is not simply a propaganda ploy, can only make one wonder where this freeze is going to lead. If it means so little to the White House and nothing to the Palestinians - if it is, moreover, not part of some larger coherent strategy in which Netanyahu enunciates what Israel's boundaries ought to be - and if the moratorium's gut-wrenching impact domestically is all pain and no gain, what are its benefits? Indeed, a Swedish EU initiative "takes note" of Netanyahu's freeze by proposing to sanctify the Palestinian position on Jerusalem as Europe's own policy. It's bad enough that Europe rejects Israeli sovereignty over west Jerusalem on the grounds that it does not want to prejudge a negotiated outcome. But to watch Sweden (which is finishing its tenure as rotating president of the EU) push so hard to acknowledge east Jerusalem as the capital of Palestine, even as Abbas refuses to negotiate, is profoundly demoralizing to an Israeli mainstream which genuinely seeks accommodation with the Palestinians. Evidently, it's politically easier for elements in the EU to parrot PLO demands, rather than support an equitable solution that also takes Jewish sensibilities into account. Of course, Abbas's demand for a settlement freeze is patently bogus in the first place. A prospective peace deal would permanently resolve the issue of where Jewish rights could be exercised and which settlements would be uprooted. So why are we arguing about a freeze when we should be negotiating borders? The real reason Abbas does not want to talk is because he hopes that by hanging tough, an exasperated Washington will impose the Fatah position on Israel. On top of that, he does not want to appear conciliatory when Hamas's fortunes are on the rise. It doesn't help that Netanyahu is placing Abbas in an untenable position. The PLO, which ostensibly eschews armed struggle, has been demanding the release en masse of Palestinian prisoners since 1993. To which Israel has responded in dribs and drabs under the rubric of "helping Abu Mazen." Yet by taking a single IDF soldier captive and by adhering to its original demands for three years, Hamas is on the threshold of achieving the release of 1,000 terrorists, including the vilest in the Israeli prison system. The popularity of the Islamists will skyrocket; Fatah's will nosedive. To add insult to injury, Netanyahu is reportedly toying with freeing Marwan Barghouti, whose arrival in Ramallah would be one big headache for Abbas and hasten a rapprochement between Fatah and Hamas at the expense of both Israel and Abbas. No wonder the rais is sulking. So Netanyahu's US-pressed freeze has pitted settlers against soldiers. It hasn't swayed Abbas or the Arab League. Hamas is bemused. Europe is little impressed. The Obama administration, which so far has merely offered parsimonious praise, needs to do better.