Almost overshadowed in the recent days of diplomatic tussle between the U.S. and Israel is the Palestinian Authority, whose leaders have been watching with concern -- and perhaps a little amusement. It's not often Palestinians get to see the U.S. and Israel clash so publicly.

On Wednesday, Palestinian Authority President Mahmoud Abbas said his government would not participate in U.S.-brokered indirect peace talks unless Israel halts all housing construction in East Jerusalem -- the issue that has driven a wedge between the U.S. and Israel. His decision was yet another hurdle for U.S. Middle East envoy George J. Mitchell, who is now scrambling to keep his mediation effort from total collapse.

Abbas' comments came a day after Palestinianyouths and Israeli police clashed around Jerusalem. On Wednesday, the city returned to calm and Israeli authorities relaxed most security measures and reopened holy sites.

Mustafa Barghouti, a member of the Palestine Liberation Organization's central council and a frequent critic of Abbas, spoke with the Los Angeles Times on Wednesday about what the recent U.S.-Israeli tensions mean for Palestinians.

Until today, the Palestinian Authority had been surprisingly quiet during this U.S.-Israeli diplomatic standoff. Why do you think that is?

They may be trying to keep quiet because they want to let this internal conflict between the U.S. and Israel go on without interference.

So it's a matter of sitting back with some popcorn and enjoying the show?

Maybe. But sitting back and doing nothing is very dangerous. We've already seen Hillary Clinton temper her comments [criticizing Israel's government], so things can go back in the old direction if Palestinians don't take a strong stance. Passivity doesn't help. We need a proactive policy to show the world and the U.S. administration, in particular, how Palestinians have been forthcoming and what we've done to implement the road map [the U.S.-drafted peace plan].

Do Palestinians see the recent shaking in the "unshakable" bond between the U.S. and Israel as an opportunity?

Absolutely. It has created a great opportunity for us at the international level. It's so clear today that Israeli policy is hurting American strategic interests. It's hurting American interests in the Middle East and surrounding regions, hurting America's foreign policy image around the world, and hurting at home. We have a superpower that is being taken hostage by a country like Israel, and for the wrong reasons. If they were defending a good cause, that's fine. But this is about defending the last colonial system in modern history.

When it comes to peace talks, there's often a game of tag over which side is perceived as the obstacle. In the past year, it's gone from Israel to Palestinians, and now, some would argue, back to Israel. Does this provide you with more leverage?

I think we are beyond that game. The issue is much larger now. After 18 years of nonproductive so-called peace talks, Palestinians are in a worse situation than when we started. When we signed the Oslo Agreement [in 1993] there were 200,000 [Israeli] settlers [in the West Bank and East Jerusalem]. Now we have more than 530,000. The U.S. and Israel and the international community have allowed the peace process to become a substitute for peace itself. It's become a cover for the lack of peace.

Some think Obama is taking this hard stance with Israel in an effort to curry favor with Arabs and Palestinians. If that's true, is it working?

No, it's not. What stance? Look at the American position on implementation of the road map. We had lots of reservations, but went ahead and implemented. Israel hasn't done anything. So where is the American stance against that? Israel is like a nasty boy who does whatever he wants, and the mother and father keep allowing him to be nasty. It's time to discipline. But those who are supposed to be disciplining are incapable. They are crippled. Today Israel does whatever it wants and no one says "enough is enough."

Some would say that's what the U.S. is doing now with the housing settlement in Ramat Shlomo where Israel has announced plans for 1,600 new units. How important is the outcome of this standoff?

We have a specific issue now. It's not 200 issues that people can't remember or focus on. It's one issue: settlements. Why now? Because we have reached a critical point. It was a mistake to allow settlement expansion to continue in the past because now we have reached a critical point where any additional settlements will mean the end of the two-state solution.

If the U.S., at this critical point and when things are so clear, is incapable of pressuring Israel to stop settlement activity, then let's be honest and say the U.S. cannot be the mediator in this case.

Has this flap emboldened the Palestinian Authority or embarrassed it? Abbas went out on a limb to agree to indirect peace talks and now they might collapse before even getting started.

This has weakened the PA more than ever before. I think this was one of the goals of [Israeli Prime Minister Benjamin] Netanyahu. [Tuesday] we had a day of uprising everywhere. That means all these diplomatic talks and moves by the PA are becoming meaningless and marginalized. Things are starting to happen on the streets. Palestinians are bypassing the Palestinian leadership and deciding to confront Israeli facts on the ground with Palestinian facts on the ground.

Does Hamas come out a winner since it always opposed peace talks and has been calling for another uprising?

I don't see them getting strong, but they are not getting weaker either.

If Israel does not shelve the Ramat Shlomo project, should Palestinians engage in indirect talks?

Definitely not. This is not an option. To continue in proximity talks while settlements continue will undermine any remaining credibility of the authority in the eyes of the Palestinian people.

We've been seeing more Palestinian protests. Is this the start of another intifada?

I don't know what we mean by intifada. It's a word that means many things to many people. If you mean like the first intifada [in the late 1980s] that was mostly popular, nonviolent, unarmed people against a huge military army, then maybe the answer is yes. But if you mean like the second intifada [2000-05], which was viewed by the world as Palestinians conducting military actions, it's not that. It's a new style of nonviolence. It's a noble thing.

But Tuesday there was a lot of rock-throwing. A hundred people were injured. Is that nonviolent?

It's the same thing that happened in Greece and nobody called those violent protests. Same thing in Thailand and so many other places. I don't know why when it comes to Palestinians, whenever there's a stone thrown, it becomes "violent." These protests are coming from the grass roots and nobody can stop them from happening.