Whether he makes good on the pledge he made last night not to stand in next year's elections, or whether he is eventually persuaded to stay, the Palestinian president, Mahmoud Abbas, has had enough already. And it is clear why. He was elected nearly five years ago to negotiate a Palestinian state and has got nowhere, even with two Israeli governments who understand that the alternatives to his leadership are worse. But even the best Palestinian president that Israel is going to get could not stop settlement construction, an obligation Israel signed up to in 2003. Even he could not stop the US secretary of state, Hillary Clinton, saying in Cairo at the weekend that Binyamin Netanyahu's offer of a partial freeze (the continued construction of 3,000 settler homes, continued building in East Jerusalem and all public projects in settlements) was "unprecedented". Mr Abbas has threatened to quit before. This time he means it.

If he does, a large building block, if not the foundation stone, of the US and Israel's plans to fashion a settlement with one half of the Palestinian people could disappear with him. Much of their current policy – not just theirs but the Quartet's and the EU's – is predicated on the assumption that Palestinians can be divided into "good" West Bankers and "bad" Gazans. With one, Israel can negotiate. With the other, Israel can only fight. But if the best West Banker of them all walks out of the Mukataa compound in Ramallah, all bets are also off not only about negotiations, but who should lead them. It could be a non-Fatah person like the prime minister Salam Fayyad. It could be a former Fatah strongman like Mohammed Dahlan or Jibril Rajoub. But this is too unlikely.

The absence of Mr Abbas would more likely clear the path for Marwan Barghouti to run. He is a popular leader, recently elected to Fatah's central committee. He is all the more acceptable to the Palestinian street for the fact that he is currently serving five life terms in an Israeli jail. Mr Barghouti's ascension would complicate life for the Fatah old guard. But as a Palestinian who still regards resistance as a legitimate response to the occupation, Mr Barghouti would narrow the gap between the leadership in the West Bank and Hamas in Gaza on this point alone. All of this is as yet hypothetical. But the mere sketching of a post-Abbas scenario underlines how much could change, and how radically, a few kilometres from Jerusalem's borders. Which explains why, within short order yesterday, Mr Abbas's phone was burning with calls from the presidents of Egypt and Israel, the king of Jordan and Israel's defence minister, all pleading with him to stay.

There are many ambiguities in the president's current position. Mr Abbas's mandate ran out in January, and he remains president only because another title was found for him, although not one based on a popular vote. There are also doubts about when a Palestinian election will be held. It is slated for January, but an election commission will almost certainly find that it is impossible to hold one in Hamas-run Gaza. It could then be delayed until June, in the hope that reconciliation could be arranged with Hamas. So even if the president makes good on his threat to leave, he could remain in office well into next year.

So often used to micromanage and manoeuvre personalities, US diplomats should step back and look at the bigger picture. It is one in which the dream of a two-state solution is souring. They should take this prospect seriously and assess which of two options poses the greater threat to US regional interests: forcing Israel, if necessary by withholding money or arms, to abide by a commitment which poses no existential threat to the Israeli state, or letting the impasse continue until a third Palestinian uprising ignites. Behind Mr Abbas's actions, serious and widespread frustration lies. And we know from past experience into whose hands this plays.