First came Brazil. In a public letter addressed to Palestinian Authority President Mahmoud Abbas last week, Brazilian President Luiz Inacio Lula da Silva said his country "recognizes a Palestinian state on the 1967 borders." The statement came in response to a personal request from Abbas, it said.

Next came Argentina, which announced Monday that it would join Brazil in its decision, which U.S. lawmakers had protested as "severely misguided."

The time has come "to recognize Palestine as a free and independent state," said Argentine Foreign Minister Hector Timerman, explaining that the move reflects deep frustration over the lack of progress and failure to achieve the goals of the Middle East peace talks started nearly two decades ago.

More neighboring countries are expected to follow suit, and Israel isn't impressed.

Although Israeli officials Monday called the move a meaningless and virtual declaration, the Jewish state is keen on nipping this trend in the bud and is beginning to hold low-profile talks with Latin American leaders, Israeli news reports said. Foreign Ministry spokesman Yigal Palmor was quoted in the news media as saying, "This is a very disappointing step that will contribute nothing to furthering the peace process." Moreover, it goes against the Oslo accords whereby "a permanent solution can only be the result of negotiations."

Indeed, this is the logic behind the Oslo process and the governing principle for decades. But lately, observers are increasingly coming to the conclusion that this is no longer tenable.

In a recent talk with the Times, Menachem Klein, a veteran analyst from Bar-Ilan University and past peace talks advisor, said the Oslo logic is simply irrelevant to today's reality. The notion that if both sides only sit down they can reach an agreement on borders within three months, or a year, is naive, as is the thinking that the ball can just be rolled back to Camp David and the process restarted from that point. The current situation calls for a serious retreat and rethinking, in order to find a new course of action.

Klein said that the Americans are more interested in conflict management than resolution, and that the Israelis are content with the status quo. The Palestinians are looking for ways to break through the status quo without breaking the game rules entirely, he said, trying "to stay on the political track but not that of direct negotiations," which aren't working. One such possibility is the avenue of international institutions or the United Nations.

What Klein calls the "Oslo logic," Gidi Grinstein calls "the permanent status paradigm." And according to him, it's history. Grinstein, president of the Reut Institute and onetime secretary of the Israeli negotiation team, said the concept of a linear process continued until a permanent status agreement is reached has governed the process since the Camp David accords of 1979.

The breaking point, however, came in 2006 with Hamas' victory in Palestinian Authority parliamentary elections, which resulted in a legitimization crisis for both leadership and peace process. "After that, the permanent status paradigm was dead," Grinstein said. Nonetheless, he added, it still holds water in Washington. He talks of a more realistic approach, "coordinated unilateralism."

Yet others suggest that attempting to pursue the process in its traditional format is in itself becoming counterproductive, as it constantly aggravates the old stumbling blocks like East Jerusalem or produces new ones, such as the issue of recognizing Israel as a Jewish state.

The talks opened festively early September. But the show ran only a few nights until Israel's freeze (which morphed into a "moratorium" and then a "suspension") of settlement construction expired. The argument over the freeze seems to have taken the process down a side alley, where it smacked into a wall.

Meanwhile, no word yet on the "letter," in which Israel expected the U.S. to put in writing understandings said to have been reached orally in return for extending the freeze. Two weeks ago, Israeli sources said they were still "nailing down the specifics."

In addition to the much-discussed F-35 fight-jet deal reportedly among the understandings, another strategic boon for Israel was to have been an American commitment to veto any U.N. resolution recognizing a unilaterally declared Palestinian state -- though Palestinians are looking for ways to circumvent this.

Which brings things back to the top.