Two opposing trends were visible in Israel and Palestine on Monday, and one of them must disappear. The Fatah congress in Bethlehem reaffirmed the strategic decision among a majority of Palestinians to seek a negotiated peace with Israel, while a string of senior Israeli officials said that they would continue expanding settlements in East Jerusalem and would not repeat the “mistake” of withdrawing from Gaza.

These trajectories of Palestinians seeking peace and Israelis perpetuating colonial occupation are so contradictory that they clearly cannot persist as they are. Yet they both also represent failed policies that must be changed if the respective interests of Israelis and Palestinians are ever to be reconciled in a peace agreement that respects the national rights of both.

The Fatah congress reaffirmed what has been clear since 1988, when the Palestinian Liberation Organization (PLO) recognized Israel’s right to exist and renounced terrorism.

This decision formalized the PLO decision of a decade earlier, namely to establish a Palestinian state on any part of the territories occupied in 1967 that were liberated from Israeli control. For the past 40 years, during which it has dominated Palestinian national politics, Fatah has shown itself to be unable to wage either war or peace.

Consequently, Palestinians everywhere, but especially in the West Bank and Gaza, suffer the worst possible combination of political stagnation, economic stress and widespread personal vulnerability and insecurity. After 1993 Fatah wasted the historic opportunity of the Oslo Accords to rally all Palestinians behind a state-building project, and after 2002 it again wasted the opportunity to rally the Arab world behind the Arab Peace Plan issued at the 2002 Beirut summit.

Rarely in modern history has a political movement that enjoyed credibility, legitimacy and respect in its early years morphed so badly into sustained incompetence in its later years.

So for the Fatah congress now to declare again that Palestinians have chosen peace with Israel, while also reserving the right to engage in armed resistance to occupation, seems unconvincing. The movement that once resonated widely around the Arab world has shown in the past 40 years that it is unable to achieve either option.

In Israel, meanwhile, on the same day, Interior Minister Eli Yishai said that Israel must go ahead with plans to expand a settlement enclave near Jerusalem despite American objections. Knesset Speaker Reuven Rivlin, on the same tour of Israeli settlements with Yishai, agreed, and added: “If we don’t build here, the Palestinians will.”

Defense Minister Ehud Barak added his voice to the continued Zionist colonization of Jerusalem, when he attended the dedication of a new Torah scroll at a synagogue in the Muslim Quarter of the Old City Sunday. The prime minister, Benjamin Netanyahu, for his part said the withdrawal of nearly 9,000 Jewish settlers from the Gaza Strip four years ago was a mistake that brought neither peace nor security, and would not be repeated. For good measure, the Israeli air force also bombed some of the tunnels that Gazans use to import essential materials from Egypt, in order to get around the strangulating siege that Israeli continues to impose on Gaza. Israel wants the right to colonize and terrorize, while demanding acquiescence from the Palestinians.

The clash between the colonialism of Israel and the incompetence of Fatah is one of the great tragedies of the modern Middle East, but like all such dynamics it does not pass unnoticed. The rise of Hamas and other militant Palestinian movements has been a direct response to both of these trajectories, an organic Palestinian determination to resist both the pain of perpetual occupation and the added pain of Palestinian complicity in perpetuating this condition.

The greatest and saddest of ironies is that Israel turned a blind eye to the growth of Hamas in the 1980s, when it saw it as a means of weakening Yasser Arafat’s Fatah movement. Today, Israel has reversed position, by giving special permission for Fatah delegates from throughout the region to enter occupied Bethlehem in order to attend the Fatah congress, as it tries to support Fatah in order to weaken Hamas. Neither strategy will work, because external manipulation to craft a Palestinian leadership to Israel’s or the United States’ liking will always fail the test of legitimacy among the Palestinian people.

The three strategies on show – Israeli colonialism, Fatah’s acquiescence, and Hamas’ resistance – all reflect short-term approaches that are unlikely to generate lasting, just solutions to this conflict, while inflicting more moral pain and physical suffering on all concerned. There are no easy exits from this corner, though the starting point for any movement toward more effective and mutually beneficial policies is to accept that current approaches have been universally catastrophic for all concerned. This lesson is especially relevant for external mediators who try their hand at peace-making.