It's one of the grandest geo-political entities of them all, every word capitalised … The Middle East Peace Process.

But its current progress, or signal lack of it, has been hanging on something rather more lower case - whether Israel is prepared, for a few months, to stop giving out new permits for construction in West Bank settlements.

Dani Dayan believes it's not so much mundane as barmy. He's the Chairman of the Settlers' Council.

"Two pandemics are running wild all over the world," he says. "The first is swine flu, the second is 'settlement psychosis'."

"North Korea and Iran are building nuclear weapons," he goes on, "and all the world cares about is if my daughter builds her home next to me."

Moshe Affen agrees with that. He's a 34-year-old father of five. He's one of the approximately 40,000 people who live in the largest single settlement in the West Bank, Modiin Illit.

It's a remarkable place just over the line from Israel, inside the West Bank.

It is a new town - architecturally deeply un-lovely - filled, almost exclusively, with haredim, ultra-orthodox Jews. Mr Affen, a teacher in a Jewish seminary, is one of them.

We met in a hardware store. I asked him what he thought of the government's announcement that it would allow a further 84 apartments to be built in Modiin Illit.

"Ridiculous," said Mr Affen. "Every family has 10 children - every year, there are thousands of new couples who need houses."

Isn't this supposed to smooth the road to peace, though?

Mr Affen shakes his head. "I'm not right-wing," he tells me. "But the Arabs don't want us here. It's not about this place, they want Tel Aviv and Haifa and Jerusalem."

So what's the answer? "I don't know," he says. "You'll have to ask God. You'll have to interview God."

Across the settlements, there are complaints that there's nowhere near enough building to meet the demands of a population growing three times faster than that inside Israel. But there is still plenty of construction.

Most of the new apartment blocks are built by Palestinians from neighbouring villages. In Modiin Illit, the construction workers shrug: "it's a job," they say. "We have families to feed."

The Palestinian leadership has two big problems with the expansion of the settlements. The first is political - they say that it undermines the Road Map which Israel signed up to six years ago. The second is practical - that the settlements threaten the viability of a geographically sensible Palestinian state.

The haredi mayor, Yaakov Guterman, says that talk of a settlement freeze is particularly unfair for Modiin Illit. It's not just that 60 children are born each week, he says. He also won't accept that it's a settlement at all - with all the connotations of illegality under international law.

Everyone knows, he says, that with a final resolution, the borders will be drawn so that Modiin Illit will end up inside the state of Israel, he says. Again and again, he tells me, it is not a settlement, it is a city.

Even if it is, now, almost impossible to imagine these 40,000 haredim being removed and re-housed, Modiin Illit does, however, remain a settlement. And on its fringes is an illustration of why heated discussions about planning applications, and numbers and a temporary freeze all feel rather narrow.

Just after you turn off the highway into the settlement, behind some rather ramshackle barbed wire, is a clump of sheds and temporary cabins. They house the fire station, the police station and a security office.

According to the Ministry of Defence's own database - some of which has been made public under freedom of information - and according to the government's own mapping, the fire station, the police station and the security office are all outside the officially designated boundaries of the settlement, on privately-owned Palestinian land.

One of the senior fire officers told us he had heard that his fire station was off-limits. The mayor, Yaakov Guterman, said he hadn't. "I've never been told this," he insisted. "Nobody's talked to me about it."

As for the civil administration, the official Israeli supervising authority for the West Bank, we gave them several days to come up with an answer to the apparently illegally - under Israeli law - situated police station. Their response: "The issue is currently under investigation".

On one level, this is, of course, fabulously minor… whether a police station or a fire station is a few metres either side of a line, a line which in turn marks what only one country - Israel - regards as an official boundary.

But this, it seems, is the level on which we are now operating. Even in the tiny area of the West Bank, there are a thousand disputes and heaven knows how many apparent breaches of Israel's own rules.

Talk now of limits and freezes, is talk of a wobbly target pinned to a blurred picture. And that - remember - is talk aimed simply at getting us to the point where negotiations can begin to try to resolve all this.