Eleven years ago, on September 4 1999, the government of Israel, under Ehud Barak, and the PLO, under Yasser Arafat, signed an agreement called the Sharm-el-Sheikh Memorandum. It provided that accelerated permanent status negotiations would commence shortly, and that their goal was to reach a framework agreement on permanent status in five months and a comprehensive agreement in one year.

It is the last formal agreement signed between the parties. Hamas is now governing Gaza to the detriment of the PLO, and the schism has further weakened the Palestinian leadership. Moreover, geopolitical developments in the Middle East in the last decade have complicated the already complex setup for negotiations on the hoped for two-states-for-two-people resolution of the conflict.

Yet all parties know what a permanent agreement would look like if it was to resolve the intertwined core issues of territory, Jerusalem, the Palestinian refugees and security arrangements. Since President Clinton's parameters were laid down in December 2000, every political initiative to ending the conflict has led to the same fundamental solutions. However, all parties also know that throughout the long quest for peace powerful spoilers and extremists will do their best to avoid compromise. Memories, ethos, fanaticism and religious fundamentalism get the upper hand over reason.

To overcome these difficulties, it is imperative that the White House now conducts a clear, binding, continuous and disciplined process to pave the way to peace: because the two-state solution is not only in the interest of Israel: it is clearly in the interest of the US and the moderate Arab world, too.

It was of no surprise that the settlement moratorium constituted the first stumbling block on the relaunch of the Middle East peace talks this week. As the summit approached, Palestinian speakers offered an uncompromising "all or nothing" standpoint on the issue of Jewish settlements on the West Bank. In Israel there were extensive attempts to appease both the settler community and the rightwing parties in Binyamin Netanyahu's coalition.

Given how high the stakes are for President Obama, one would have thought a compromise on the freeze on settlement construction would have been attained between the three leaders quite a while ago, far from the limelight. The exchange of ambiguous public statements in Sharm-el-Sheikh yesterday seems therefore to serve a longer-term battle, related to an anticipated failure of the talks: who will get the US empathy, and who will be blamed by the US administration.

Netanyahu and Obama recently hailed the US-Israel relationship as an "unbreakable" bond; that relationship is now entering a challenging period. Netanyahu's assumptions in deciding to enter into the negotiation process were presumably three: that an agreement – albeit not a full-fledged permanent status one – was attainable; that the Palestinian leadership is capable of implementing it; and, finally, that he himself is able to eventually get this done by paying a bearable political price. As much as I would like to sustain those assumptions, I doubt the latter two.

Both Mahmoud Abbas and Netanyahu are aware of the substantive differences in their positions, and the difficulties either counterpart faces or might face domestically. But time is running out for those, like me, who want to secure a Jewish and democratic state within recognised boundaries alongside a demilitarised Palestinian state. True, polls consistently demonstrate that Israelis overwhelmingly support the two-state solution. But this majority has not been heard politically. Israelis are starting to realise that, and a few groups are getting their act together to change the course. They say: we are Israeli, Jewish and Zionist, and refuse to apologise for it.

Finally, the peace negotiations are not just a series of meetings and talks, photo-opportunities and summits. There is an urgent need to condition the respective constituencies for peaceful co-existence. It is necessary to begin to restore confidence between the two societies. In the long run, reconciliation between the Arab world and Israel will require healing collective wounds, amending relationships, and building bridges by forgiveness. The Arab peace initiative might provide the basic framework for that.