With the Palestinians already threatening to walk away from the Middle East peace talks unless Israel renews its partial ban on West Bank settlements, the unveiling of 238 new homes for Jewish settlers in East Jerusalem could well kill off the negotiations.

The new plans were approved by Prime Minister Benjamin Netanyahu who apparently could not wait for the settlement moratorium to end, for he is the winner no matter what. Look at the extraordinary basket of incentives Washington offered Israel for a one-off, 60-day extension of the freeze. They include a US pledge to support an Israeli Army presence in the Jordan Valley even after a peace agreement is signed; a veto on any UN Security Council resolution criticizing Israel for the duration of negotiations; an upgrade of weapons not covered in previous arms deals; and a promise not to ask for another moratorium beyond the extension. This by a country that grants Israel $3 billion a year in military aid. An extraordinary package for essentially nothing: Should Netanyahu agree to a moratorium extension of just two months, he will get all this. If he does not, he will probably get even more.

It’s not clear what assurances Obama offered the Palestinians. For nothing in return, the Arab League, including the Palestinians, agreed at the Sirte summit to give the Obama administration 30 days to get Israel to adhere to the basics of the peace process, including pressuring Israel to renew the freeze on Jewish settlements. However, this one-month hiatus is aimed more at unburdening the Obama administration of the task of confronting Israel during the midterm US Congressional elections rather than seeing any concrete results from any renewed American efforts at reactivating an exhausted and unpromising peace process.

What the Palestinians want is an explicit statement by Obama that the 1967 borders will be the baseline for any final-status negotiations on a Palestinian state. But even if Obama were to endorse a Palestinian state on the 1967 borders, it would have no more traction than his call for a settlement freeze unless Israel also recognizes them as a basis for negotiations. With Netanyahu at the helm, this is highly unlikely. His offer to extend the freeze in return for Palestinian recognition of “Israel as the National State of the Jewish people” was made only because he knew it would be refused. No Palestinian official would agree to recognize Israel as a Jewish state which is linked to the Zionist plan to expel most or all Arabs who have Israeli citizenship and who constitute around 25 percent of Israel’s overall population.

The PLO formally recognized Israel’s right “to exist in peace and security” in an exchange of letters before the signing of the 1993 Oslo Accords. What is the connection between settlements and the national character of Israel? The real issue threatening peace talks is settlement activity that continues with or without a moratorium. According to Israel’s own statistics, in the first half of 2010 — the period of the “freeze” — the West Bank settler population grew by 8,000, almost the same rate as 2009 and triple the average population growth inside Israel.

The new East Jerusalem project is part of a larger announcement allowing developers to bid on thousands of housings contracts across Israel. As such, for its duration and any period to come, the moratorium was and is a sham, much like the negotiations themselves.