Israel's 10-month partial freeze on new colony building in occupied Palestinian territory, as announced by Prime Minister Benjamin Netanyahu on November 25, has been rejected by the Palestinians as a basis for peace negotiations. They want a total freeze.

This is the stated position of Mahmoud Abbas, President of the Palestinian National Authority, and of his chief negotiator, Saeb Erekat. It must be hoped that this is not their last word.

Following Netanyahu's announcement, Erekat declared: "Without a … [colony] freeze, there can be no credible negotiations and no credible peace process … [Colonies] are not only illegal under international law. They pose the greatest threat to the two-state solution and run counter to the formula of ‘land for peace' on which the entire Middle East peace process is built. And without [occupied] East Jerusalem as its capital, there can be no viable Palestinian state."

At this particular moment in international affairs, is this a sound tactical position to adopt? The question must be posed whether, by rejecting talks on the basis of Netanyahu's partial freeze, the Palestinians might be in danger of missing an important opportunity.

If, however, the Palestinians hold on to their present position, they will undoubtedly be blamed for blocking a resumption of final status talks. They also risk losing invaluable American and international goodwill. In ten months' time, Israel will feel free to resume full-scale construction, claiming it has no partner for peace.

In the circumstances, the Palestinians might be wiser to call Netanyahu's bluff and announce their readiness to enter into negotiations at once.

No objective observer can claim that Netanyahu's partial freeze is anything but a cynical manoeuvre. It positively stinks of bad faith. It is aimed at easing American pressure on his government and at keeping his governing coalition intact.

The US has welcomed Netanyahu's decision as a move in the right direction while, at home, no far-right faction has defected from his government, although he has faced some predictable howls of protest from diehard colonists.

But this is surely not the end of the matter. US President Barack Obama may have back-tracked somewhat from his initial call for a total colony freeze; he may have been distracted from the Middle East conflict by other pressing matters such as health reform, Afghanistan, US unemployment and the financial crisis. But he remains totally committed to a two-state solution.

Key part of Clinton's statement

The US position was spelled out by Secretary of State Hilary Clinton on the same day as Netanyahu's announcement and was repeated word-for-word by Special Envoy George Mitchell. This is the key part of Clinton's statement:

"We believe that through good-faith negotiations, the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state, based on the 1967 lines, with agreed swaps and the Israeli goal of a Jewish state with secure and recognised borders that reflect subsequent developments and meet Israeli security requirements.

"Let me say to all the people of the region and the world: Our commitment to achieving a solution with two states living side by side in peace and security is unwavering."

It is striking that this important statement contains a reference to the 1967 borders.

Mitchell, in turn, spelled out America's position on occupied Jerusalem. "United States policy," he declared, "remains unaffected and unchanged. As has been stated by every previous administration which addressed this issue, the status of [occupied] Jerusalem and all other permanent status issues must be resolved by the parties through negotiations."

The Palestinians should take heart from these statements.

Mitchell spelled out that the US has in mind multi-track negotiations: high-level direct talks between the parties; parallel talks with the US about key issues and lower-level direct talks to work out details.

The Palestinians should not remain passive. They should make the most of the emergence of Obama. The Israelis need to be reminded on a daily basis of the tremendous benefits which would flow to them from the implementation of the Arab Peace Plan, including normalisation with all 22 Arab states.

In some significant ways, the log-jam in Israeli-Palestinian relations appears to be thawing. Israel's Defence Minister Ehud Barak has spoken of the need "to arrive at a process that will yield two states for two people, to bring an end to the conflict and to establish a Palestinian state without harming our interests."

Statements of this sort suggest that there is some new thinking inside the Israeli cabinet, some realisation that Obama means business.

Meanwhile, Fatah leader Marwan Barghouti may soon be released as part of a prisoner swap. He is expected to make a bid for Palestinian leadership. Gaza leader Esmail Haniya has offered to stand down in the interest of inter-Palestinian reconciliation. Hamas has moderated its stance and seems ready to accept a permanent settlement based on the 1967 borders.

Although he is challenged by enemies on all fronts, Abbas should conquer his evident depression and act. He should announce that he is ready to start negotiations with Israel immediately, under active American sponsorship.