As H.L. Mencken might have observed, no one ever went broke underestimating the abilities of the current Israeli or Palestinian leadership. But in the competition for the region's top cluelessness prize, one has to give Bibi Netanyahu the edge. After all, he has done the near impossible and edged out Mahmoud Abbas.

That's no small feat. Over the weekend a keen, very experienced observer of the region who has what would be generally viewed as a pronounced a pro-Palestinian tilt to his views called Abbas, "hopelessly incompetent, corrupt and obsessed primarily with where his next dollar is coming from." As I noted, this was a supporter. He was struggling with why Abbas might seek to take his statehood resolution to the U.N. Security Council where it will certainly be vetoed rather than bring it to the U.N. General Assembly where he is equal assured of a resounding victory when the votes are tallied. Yes, the latter path grants only observer status, but the former grants nothing at all except the chance to give a few more indignant speeches.

My friend speculated on a few reasons. Foolishness was one. A second, not much more charitable, was that he wanted center stage, a last hurrah, that might propel him into his post-political life well. If it did and that also helped the overall cause by getting some supporters on the record and highlighting divisions among the great powers, all the better. It also might be that he recognizes that actually winning in the General Assembly might then shift the focus to the hollowness of his victory if it comes, as it will, for a nation without borders its most nearest neighbor will agree upon?

Whatever the outcome and whatever Abbas' motives however, he has done one thing that his Israeli counterpart and the wise foreign policy heads within The Quartet have been unable to do. He has taken the initiative and redefined the debate. He has attempted to break out of the box of negotiations that have been going nowhere for years and in so doing he has, for the moment anyway, got everyone else scurrying around reactively to his gambit.

He has been able to do this because he has recognized that global sentiment is now so squarely behind the idea of Palestinian state and so deeply frustrated not only with the stasis in the "peace process" but with the inflammatory and counter-productive Israeli settlements policy that old rules of conduct no longer applied. In the worst case, he will cast a bright light on how many major and emerging powers support a Palestinian state, how deep the support is around the world and, by doing so in a way that flies in the face of the desires of the traditional maestros of the peace process, that registers growing global frustration with their ineffectiveness.

This is at least, partially attuned to reality.

The same cannot be said of the Israeli response or the policies that got them to that place. This fact has been driven home in the past couple days by several developments. First and least, has been the steady drumbeat of states that have said they would support the Palestinians.

More importantly, you have the evidence that the strategic ground is shifting under Israel's feet and not to that country's advantage. Some of it can be found coming from Washington. Oh sure, the Obama Administration is actively trying to forestall the U.N. vote and demonstrate its support for Israel -- although interestingly, as the recent NY Congressional election suggested, they may not get much credit for whatever they do from voters who don't believe that Obama is, in his heart, truly supportive of Israel. But the big signal this week that Netanyahu ought to take into account actually comes from an unlikely place. It comes from the President's budget deficit cutting plan announced today.

In the plan, Obama produces big "savings" by winding down the U.S. wars in Iraq and Afghanistan. Admittedly, to my view, this is a bit like one's spouse producing "savings" by agreeing not to buy a new Bentley, but that's a subject for another day. The salient point is that this announcement is the latest sign of the end of America's "war on terror" and a foreign policy built around containing Islamic extremism. It means that for the second time in two decades, the bogeyman that made Israel strategically important to America is being relegated to dramatically less significant status. It also means that America itself is planning on playing a role in the region that is dramatically reduced compared to that of recent years-one that is likely to be constrained further once deficit hawks have their way with aid budgets.

The impact of these shifts has been compounded by the corresponding rise of the promise of moderate, democratic, more secular states in the region. The recent statements by Turkish Foreign Minister Davutoglu concerning the desirability of developing a partnership between Turkey and Egypt should drive this message home to Israel and to all with interests in the region. While Davutoglu said "this will not be an axis against any other country", surely the Israelis were not comforted (nor, one hopes, were the Iranians). These two powers could, should such a relationship develop and their own internal evolution continue, become far more important to the U.S. in promoting its interests in the region than Israel ever could. That might well lead to some trade-offs and a shift in U.S. policies even were America not pulling back from the region (as it will, protests from the Administration and the Congress notwithstanding). But if we do pull back, these large regional powers will have more sway and suffice it to say, Israel's relationship with neither is improving.

So the situation on the ground includes the upheaval of the Arab Spring, the growing recognition that stability in the Middle East will turn more on the rise of moderates than it will on balance of power formulas of the past, the coming withdrawal and shifting priorities of the U.S., the rise of regional forces inclined to be more activist (like the Turks), the massive global support for the Palestinians...and Netanyahu and company are embracing policies as though it were June 1967.

They have managed to alienate their friends and make their otherwise feckless enemies look stronger. When simply accepting the Palestinians right to statehood would have given them the high ground and a better position to demand clear recognition of their own right to exist as a Jewish state in return, they have opted for an intemperate, unconstructive, anachronistic approach that has placed their country at greater risk than it has been at any time in roughly four decades. Inadvertently, Netanyahu is doing all he can to turn Abbas' swan song into his own.

Of course, that may not be such a bad thing when what the world and both countries need is new leaders who are more in tune with the new reality in the region and who see that the issue is less political than economic -- who both recognize that there is a deal to be done in which the world helps fund the transformation of Palestine into the economically thriving partner that Israel needs and should want at her borders and who are competent to bringing that deal to fruition. That's why the votes that will really matter re: Israeli and Palestinian peace will come not at the UN but at the ballot boxes in both countries...and hopefully they will come soon.