Even those who had modest expectations for the Annapolis conference were disappointed by its results: an agreement to start negotiations and a statement that selectively reiterated parts of the roadmap that the parties had anyway failed to implement since it was introduced in 2003.

The two sides, with heavy American involvement, failed not only to bridge the gap between them and make political progress toward agreement, but also to agree on any terms of reference for the negotiations that are to follow or even their subject. That should confirm previous suspicions that the parties needed the Annapolis conference to strengthen the respective leaderships in Israel, Palestine and the US rather than to achieve any tangible progress in peacemaking.

The inability to agree on almost anything in the preparations for Annapolis, including an agenda or the terms of reference for subsequent negotiations, is a strong indication that the forecast for the actual negotiations is extremely poor. The parties, who exaggerated the scale of the event, were at the same time consistent in their attempts to lower political expectations.

Both parties, together with prominent members of the international community, are now busy preparing for what promises to be a huge and noisy process that will move from one capital to another. In this way, the parties hope to cover up the expected lack of substantial political progress by exaggerating the process itself. It is ironic to note that Annapolis, which marked no substantial progress, was presented by officials and the media as a success, while the 2000 Camp David negotiations, which showed limited but substantial progress, were portrayed as a failure, one that was readily blamed on the Palestinian side in view of the internal situation on the Israeli side.

The Annapolis event and the process that is to follow have already had different effects on the different parties. The US government has benefited from convening the conference by conveying the impression that at least it is doing its best. This is useful for American Middle East policy generally and for engaging Arab countries and publics in a way that might to a certain extent contain the Iranian influence that increases as the Palestinian-Israeli conflict deteriorates.

Annapolis was also useful to Israeli Prime Minister Ehud Olmert and his internal standing. Olmert is trying to create a sense that he is a political survivor and that his survival is useful for the cause of Israeli security.

One of the negative outcomes of Annapolis was that it further marginalized the political role of Europe and the international community in general. Annapolis was characterized by a reversion to the American monopoly on mediation, a monopoly that has proved to be one of the causes of earlier failure in peacemaking attempts.

As for Arab countries, from among whom a sizeable delegation participated, they too were disappointed because the Arab initiative, which is consistent with international legality and the roadmap, was not endorsed.

In Palestine, the effect of Annapolis is more complicated. The differences that became apparent among the Palestinian members of the negotiating delegation in the last days and hours before the conference convened, indicate that some of the leading members of that delegation were preparing to direct the blame for the expected failure on others.

Thus, when President Mahmoud Abbas returns back to Palestine, he will be faced with at least three serious challenges. The first is blame, including from some of his closest aides and members of his delegation, for the failure of Annapolis, including for the decision to sign onto the poor joint statement that was read at the end by US President George W. Bush. In truth, Palestinian diplomacy must share the blame for that with Arab diplomacy, both of which failed to prevent Bush from including in his opening statement the Israeli position on Israel being the state of the Jewish people. This controversial position is opposed by Palestinians and Arabs because it precludes the rights of Israel's Arab citizens as well as the right of return of Palestinian refugees.

The second challenge is the growing pressure on Abbas, which started before Annapolis, from his Fateh fellows to order a government reshuffle in order to appoint Fateh members and change the composition of the government away from independents.

The third and most important challenge is when the Palestinian public realizes that neither Annapolis nor the subsequent process of negotiations will end Israeli settlement expansions or the draconian restrictions on Palestinians in general, both of which are heavily responsible for the misery of Palestinian lives. This in turn will be heavily exploited by the Hamas leadership, which kept a low profile before and during Annapolis in order later to say "we told you so".

Both Abbas and Palestinian Prime Minister Salam Fayyad have a common interest in facing these challenges. They need each other and strengthening their alliance is useful to both. Indeed, the party or personality that is affected the least by the failure of Annapolis on the Palestinian side is Fayyad. He kept a certain distance from the process and instead of gambling on any political progress he focused on practical measures such as economic and security improvements. In a telling statement after the security success his government achieved in Nablus, he said that for him what happens in Nablus is more important than what would happen at Annapolis.

Overall, Annapolis has left the Palestinian leadership in a very critical position. The absence of any practical improvement on the ground as well as in terms of Palestinian political aspirations will leave it an easy target for the opposition. In this way, in the medium term the Palestinian leadership will pay the price for the benefits the Americans and Israelis made out of the process. A win-win situation that includes the survival of the Palestinian leadership depends on whether the Americans will act to ensure that Israel fulfills its obligations under the first phase of the roadmap by stopping the expansion of settlements and reversing its reoccupation of PA areas.