Success in the current Israeli-Palestinian negotiations will depend on active bridging by the third party, the United States. At the same time, we should not forget the destructive role played in the past and present by spoilers on both sides, as well as others further afield. As the US secretary of state, Hillary Clinton, stated last month, "the enemies of peace will keep trying to defeat us and derail these talks".

Regionally, Iran is pressing ahead with its nuclear programme. In the words of its foreign minister, it will continue to enrich uranium despite receiving Russian fuel for its nuclear reactor. This has become a high priority strategic concern for the US and its allies, who believe Iran's real intention is to build nuclear weapons.

Zalman Shoval, a former Israel ambassador to the US who is close to power circles in Jerusalem, remarked that "the Obama administration felt that progress on the peace process would set the stage for an effective regional coalition against Tehran. The Israeli approach was the exact opposite, stressing that if Iran's nuclear programme were neutralised, then that would set the stage for a real peace process, since that would weaken the most radicalised elements in the Arab world who sought to actively undermine any prospects for peace, especially Hamas, Hezbollah and Syria."

This linkage is further complicating the situation. Most of Binyamin Netanyahu's coalition partners, and even members of his own Likud party, view this linkage as a double nightmare. Strong indications that Israel is preparing unilateral, surgical air strikes against multiple Iranian nuclear facilities darken this bleak picture. Not only would such an operation be militarily difficult to carry out, it cannot achieve Israel's ultimate objective of eliminating the Iranian threat. As the US defence secretary, Robert Gates, has warned, at best it will postpone the development of a nuclear strategic capability.

We – an Israeli and a Palestinian – believe there's a way out of this tangle. As the risks grow, so do the benefits of bold thinking. We teach our students at the University of Maryland: "The Israelis and Palestinians are doomed to live together." This summer, we added to this formulation, "… or are doomed to die together". This state of affairs demands a striking paradigm shift, through which an Israeli-Palestinian peace agreement could actually neutralise the Iranian nuclear peril. This kind of linkage may be the only way to achieve results in which all the parties – Israelis, Palestinians, Americans and Iranians – can "win".

With a peace agreement in hand, the Palestinian president, Mahmoud Abbas, could then address his Iranian counterpart, and pointedly ask: "Mr Ahmadinejad, have you been developing a nuclear weapons capability to stand against Israel in solidarity with the Palestinian people?" – and then add, "I am the president of the Palestinians and I say to you now, 'No thanks'. We have made peace with our neighbours and need to move on to a new constructive era."

The international community understands that Iran has provided weaponry and monetary support to non-state actors such as Hezbollah in Lebanon and Hamas in Gaza, undermining progress towards regional peace. If Abbas can offer a credible alternative, it offers excellent prospects for trumping the rejectionists' appeal.

Historical Jewish fears of another Holocaust have been aggravated by the growing nuclear threat from an unpredictable government, by the recent terrorist acts of suicide bombers, and the new long-range rockets that move the front from the borders of Israel to homes all over the country. These realities make the price of trading territory for a peaceful future a goal that many Jews in Israel still find worthwhile.

At the same time, the Palestinians have come to appreciate that a militarised uprising cannot guarantee their independence or put an end to their own traumatic experience of occupation. The Palestinian Authority has slowly, but progressively, supported the concept and practice of nonviolent action. In the West Bank areas that are under Palestinian control, police now provide credible security, even though Israel has not fully reciprocated by removing checkpoints and ending nightly army incursions.

If the Israeli government declares support for the 2002 Arab Peace Initiative, this may secure diplomatic relations with the 22 members of the Arab League and may even lead to the establishment of normal ties with all 57 Muslim countries that have endorsed the plan. Notably, Iran is still among those signatories.

Concluding a regional peace with Israel would minimally allow for the long-term possibility of making the Middle East a nuclear-free zone, Israel included. We believe this approach is congruent with President Obama's, as set forth when he won the Nobel peace prize, and can deliver its expected fruit. Perhaps, then, we could coin a new phrase for our class: "Israelis and Palestinians are blessed to be neighbours."