Prime Minister Binyamin Netanyahu’s maximum offer to the Palestinians falls way short or something any Palestinian leader could accept. With that in mind, both sides have found a way of exiting from the negotiations. Even if they resume for another short period, it seems unlikely they will reach an agreement. The Palestinians have little to give and Israel has no desire to give.Even if US Secretary of State John Kerry blames both Israel and the Palestinians for the current crisis, he must also admit that the United States has failed as a mediator.The US did not present real bridging proposals and did not apply the necessary pressure that could lead to an agreement. Reports from the very few people who have actually seen the Kerry document indicate that the US did not depart from their pro-Israel, biased policy slant supporting the Israeli side on just about every issue. That is the bottom line of almost nine months of negotiations.The US support behind the Israeli positions is probably a shock to the Israeli public which has believed that it was Netanyahu who has been pushed by the American to make compromises. Even the latest laying of blame at Israel’s doorstep for the collapse of the talks should not delude anyone into thinking the Americans were impartial or more supportive of the Palestinians than of Israel. The Americans probably did push Netanyahu on some issues, but the American “bridging” proposals apparently fall very short of even approaching what any Palestinian leader could accept. I have written those positions in this column many times over the past years and they include: • A Palestinian state on 22 percent of the land between the river and the sea.• Territorial swaps of a maximum of 4% on an equal basis with Israel getting the main settlement blocs and Palestine getting uninhabited territory adjacent to the Green Line.• A Palestinian capital in east Jerusalem with Jerusalem remaining a united open city with two sovereigns within its boundaries.• The end of Israeli control over Palestine’s external borders and agreed-to security arrangements.• The refugee issue to be resolved by providing every refugee with a number of choices, including the right of return to Palestine, and for a limited, symbolic number the option of settling in Israel, as well as fair compensation for all properties lost. • Commitment to the end of the conflict and the end of all claims.I believe that with proper security arrangements and robust implementation assistance and verification mechanisms all of these points could be accepted by a majority of Israelis and Palestinians. But this is far too much for Netanyahu to agree to and because of that, rather than making history as the Israeli leader who resolves the Israeli-Palestinian conflict, he will go down in history as the Israeli leader who failed to properly identify a crucial opportunity for genuine peace and security for his state and people.Netanyahu will go down in history as the leader responsible for the isolation of the State of Israel and perhaps as the last leader in Israel who had the opportunity to negotiate a two-state solution.Netanyahu may be popular today because of his decision not to make peace with the best Palestinian partner Israel could hope to have, but in the future he will be judged as a colossal failure who led his people down a very dangerous path to the demise of the Zionist dream and perhaps another horrific, unnecessary round of violence.Millions of Palestinian people will never agree to live devoid of political rights. They will not give up their national aspirations for a state of their own. They will be punished by Israel and the US for refusing to capitulate to Israeli and American demands. They will be forced to pay a heavy price for their resolve not to accept the meager offerings put on their table. Every step that Israel takes in the tit-for-tat retaliation against Palestinian unilateral decisions to gain their freedom and independence will hurt them, but by hurting them Israel will gain nothing, quite the opposite. In the end, Israel has nothing to gain by creating more suffering for its neighbors.The Palestinian Authority’s fiscal stability is already on the verge of collapse – a little push and it could easily go over the edge.How will Israel deal with a bankrupt PA? With Israel still in control and the PA unable to pay its bills, who will provide for basic needs such as education, health and welfare? What will Israel do when the PA can no longer pay the salaries of its security forces? What will Israel do when the Palestinian security officers say to themselves “why am I still protecting Israel’s occupation of my people?” The only effective “retaliation” that Israel can implement that will serve its own interests is to support Palestinian actions which strengthen its ability to be an independent state, living in peace next to Israel. Drop the ridiculous demand that they recognize Israel as the nation-state of the Jewish people – we don’t need their intervention in a subject which is not even defined among Israel’s citizens. Encourage their economy and the building of state institutions. Encourage the Palestinians to sign onto international conventions and treaties, especially those such as the first 15 they’ve already signed onto, which obligate them to respect human rights, rights of diplomats, prevent torture in their prisons, etc. The more the Palestinians grow accustomed to act in accordance with international law and normal international relations as a state, the better off Israel will be.Palestinian statehood is in Israel’s interest, and Israel should not put road-blocks up that will prevent its emergence. Israel has an interest in reaching an understanding that Palestine will be non-militarized. Israel and Palestine – two states need agreements on issues concerning border management, electro-magnetic spectrum, security arrangements, economic agreements, tourism cooperation and more. Israel should allow Palestine to exist and negotiate agreements on a state-to-state basis; two UN member states. This should not be seen as a threat to Israel; it is in fact the end goal of negotiations.Rather than threaten the Palestinians for taking steps to achieve real statehood, Israel should encourage them and be a supporting partner to them.The author is the co-chairman of IPCRI, the Israel Palestine Center for Research and Information, a columnist for The Jerusalem Post and the initiator and negotiator of the secret back channel for the release of Gilad Schalit.His new book Freeing Gilad: the Secret Back Channel has been published by Kinneret Zmora Bitan in Hebrew and The Negotiator: Freeing Gilad Schalit from Hamas from The Toby Press.