Proximity talks between the Israeli government and the Palestinian leadership have just begun. It took Barack Obama's administration almost 15 months to obtain the consent of the parties to talk to each other indirectly, through George Mitchell's team. For the 19-year-old peace process (if counted from the Madrid summit) it is doubtful whether this new phase deserves even the modest "small step" label.

Small as it is, securing the diplomatic and political climate which enabled the proximity talks was not an easy step to achieve. It required the administration to put considerable pressure on the parties and, in the case of the demand from the Israeli government to freeze construction in West Bank settlements, some unprecedented arm-twisting. This explains why, though holed like Swiss cheese and scattered with countless inexplicable exceptions, the settlements construction moratorium is seen and presented by the administration as its biggest success so far.

Almost five months after the declaration of the moratorium, it is now clear: The Netanyahu-Barak government is compensating the settlers generously for introducing this (partial) construction freeze. The reward is huge and expensive, and it is paid in the most precious currency Israeli leaders have: outpost legalization and planning approval. The settlers, ideological and patient in a manner that only messianic communities are, understand that while the construction moratorium is temporary, legalization of outposts and approval of construction plans will have long-term effects. They see the attraction in this barter for the long run and act accordingly. They play their role in the freeze game: They demonstrate against it, they send their young hooligans to clash with the Israeli army and police, they violate it publicly, but they do not declare the current government as their enemy, as they did when late Prime Minister Yitzhak Rabin declared a narrower construction moratorium -- one that applied only to state-funded construction in settlements. The planning-and-outpost-legalization-for-temporary-moratorium deal has never been announced publicly or ever officially confirmed. We may only infer its existence by reviewing the evidence revealed in the last five months. And the evidence is ample and compelling:

First, in three Israeli High Court petitions brought by Palestinian landowners, as well as Israeli human rights organizations and peace groups, demanding to enforce demolition orders issued against illegal houses built in four outposts, the government has altered its position significantly after the moratorium was declared. While its pre-moratorium position was that the demolition orders must indeed be carried out but that the court should leave it to the government to choose the timing, its post-moratorium position was that a survey of property rights should be carried out so that it may consider a retroactive legalization of the illegal houses. This new position was presented in the cases of Derech Ha'avot, Rechelim, Haresha, and Hayovel -- all outposts built illegally (even by Israel's own definition of what constitutes illegality in the occupied territories) and without official governmental approval.

Secondly, in about a dozen other petitions pending in the Israeli High Court of Justice, where demolition orders against illegal construction on private Palestinian land are at stake, and therefore legalization of those buildings is not an option, the government also made a significant position change. Its pre-moratorium position was that demolitions should be carried out according to prioritization that is to yet be set. It took the government more than three years to present before the High Court the demolition enforcement priority principles it adopted. However, shortly afterward, the moratorium was declared and the government announced that during the moratorium period the priority document is suspended. Why? Because "all energy, resources and manpower is dedicated to the enforcement of the moratorium." Making sure the settlers do not build in violation of the moratorium, the government told the High Court, makes it impossible for us to deal with old illegal construction.

And finally, since the construction freeze was introduced, several major neighborhood plans for settlement where either approved or advanced in the relevant planning committees. Those plans include together thousands of housing units in extremely sensitive places, and some of them were pending for years while consecutive governments avoided advancing them. When negotiating the construction freeze, the U.S. administration did not listen to Israeli voices who repeatedly warned of the shortcomings in a construction freeze that did not include a planning freeze. The result, as anticipated, is severe, and its first signal arrived less than a week after the moratorium was declared: The West Bank planning committee approved a plan for a new neighborhood of 360 housing units in the Talmon settlement, deep in the West Bank. The plan retroactively Koshered 60 illegal houses already built and allowed the erection of hundreds of new ones. The plan was pending for years and the settlers have failed time and again to have it approved. In the same way other plans were advanced since the moratorium was declared, most of them far from the 1967 line and others in East Jerusalem.

The settlers are preparing for the day after the construction freeze; the day of the de-freeze. And when that day comes, they are certain a construction boom of significant scale will commence. Unfortunately, unless something dramatically changes, the freeze might be seen in retrospect as a bad deal for the peace process.