Israel is at a dramatic crossroads for its national security.

The threat of Iran going nuclear, the shifting sands of the Arab Spring, the total stalemate in the peace process and the ongoing delegitimization of Israel in the world – all these are not plagues from the heavens, but characterize the region in which we live, technological developments and a world not accepting the occupation of another people.

And what is the government’s answer to these challenges? A multitude of irresponsible press briefings and interviews and a total lack of policy initiative. A stagnant government in a stormy situation.

Regional threats are not new in the Middle East. I was fortunate to serve as Israel’s peace negotiator in the Rabin-Peres government, and I remember well the deliberations leading to initiating a peace process vis-a-vis the Palestinians and Syria.

The discussions, held together with our security establishment, were not mainly about the PLO or Hafez Assad, but about the wider periphery of the region, mainly the threat of Iran opting for a nuclear option.

It was clear to our leaders then that because of the more existential threats to our national security, we have to create a buffer between us and Iran, then also Iraq, and to strengthen our position among the nations, first and foremost, with the United States. This in turn created the process with the Palestinians, the peace with Jordan, the renewal of normalization with Egypt and a dramatic improvement of our international relations, above all with then-president Bill Clinton.

The Arab world and the international community were with us, sharing the view of a dangerous Iran.

This rationale is true today as well. To deal with Iran militarily would amount to nothing short of a non-conventional regional war. The response to the Iranian challenge must be led by the international community, headed by the United States. As for us, we must recreate the cordon sanitaire around us, starting with the Palestinians, rescuing our peace with Egypt and Jordan, improving our relations with Turkey and strengthening our international posture and the strategic alliance with the United States.

With such challenges, dangers and opportunities on our national agenda, what is the only policy decision the government took last week? The establishment of 2,000 new housing ing units beyond the green line.

We seem to deserve a Nobel Prize in the field of “self-inflicted political damage.”

What the government needs to do, most urgently, is make a realistic offer to the Palestinian Authority that will ensure the renewal of the peace process, i.e., propose direct negotiations on borders and security, based on Barack Obama’s Washington speech and a settlement freeze for six months.

It is high time that the government make a choice between the advice of Gush Emunim’s leadership and that of the heads of our security establishment, who almost to a man advise embarking on a viable peace process, given the volatile situation in the region. So far the government’s choice is clear: a government of the settlers, for the settlers. In the West Bank there are today 330,000 settlers, who inhabit 10 percent of the territory. The government has made this its first priority. On education, the government spends 30% more on settlers than on Israelis within the Green Line. The only affordable housing for Israelis today is in the West Bank.

We must understand that for the Palestinians, the settlements are not an excuse to avoid negotiations, but a direct challenge to their desire to establish a contiguous Palestinian state within the 1967 lines, with mutually agreed land swaps. Take for instance the new settlements, the “outposts” – 80% of them are fully or partially on Palestinian private land. The same is true for the bigger settlements – 35% of Ariel for instance is on private Palestinian land.

Sixty-five percent of the new construction in settlements is east of the security barrier. For the Palestinians it is clearly a matter of settlements or a state; for us, it is settlements or peace.

The settlements policy of the Netanyahu government is the litmus test for its willingness to take difficult decisions on the way to peace. On the issue of settlements, it’s Israel against the whole world, without a single exception – 193 countries, including the United States. A continuation of the settlement policy will lead us to a catastrophe – it will put an end to the two nation-state solution; it could even lead to a violent uprising from the West Bank; it will push Fatah closer to Hamas; it will alienate Egypt and Jordan, and possibly put our peace treaties with them at risk; it will harm our political and economic relations with the European Union; it is already putting arms purchases at risk, as seems to be the case with one of Israel’s greatest friends, German Chancellor Angela Merkel; it places us on a collision course with the administration in Washington; it harms our internal cohesion – as this is not a consensual issue within Israel; and paradoxically it puts even the settlements at risk, as we want to secure the settlement blocs within Israeli sovereignty, which is possible only through negotiations.

I do not blame the settlers although I oppose entirely their messianic, sometimes racist ideology.

I blame the government, which is led by them. It is almost too late; we may have a brief window of opportunity in which secret talks with the Palestinians should lead to a formula for renewing negotiations:

• A settlement freeze for six months.

• Negotiations for six months on borders and security – A statement that the negotiations will lead to an end of conflict and all claims.

• An end to all unilateral actions, from both parties.

I hope that in the deliberations occurring now within the inner sanctum and cabinet of our decision- makers in relation to our position in the Middle East, given the turmoil around us and the Iranian nuclear option, wisdom and courage will prevail. The alternative will endanger our national security. It seems the government is frozen in its thinking process and its ability to initiate policy. Instead it should freeze the settlements now and ask in return for the Palestinians to freeze their unilateral and futile actions at the United Nations.

We have just marked the 16th anniversary of the assassination of Yitzhak Rabin. It is time to continue his security legacy, which is based on accommodation with our immediate neighbors, a strong alliance with the United States and an understanding that the dream (or nightmare) of “Greater Israel” is over.

This would lead to the most effective answer, alongside the United States and possibly many within the region, to the Iranian nuclear threat.