Few noticed that last Thursday, June 14, was the third anniversary of Prime Minister Benjamin Netanyahu's speech at Bar-Ilan University during which he declared, for the first time, his willingness to accept "a demilitarized Palestinian state side by side with the Jewish state."

Since most of the international community and large parts of the Israeli public had already decided the two-state solution was inevitable, they didn't view Netanyahu's remarks as exceptional. But for Netanyahu, who for years had opposed a Palestinian state, it was a significant statement.

Netanyahu came to the Bar-Ilan speech after a "reassessment" of the Palestinian issue, which led him to the same conclusions, more or less, as those former Prime Minister Ehud Olmert and former Foreign Minister Tzipi Livni arrived at. En route to Bar-Ilan, Netanyahu had managed to anger the Americans and raise suspicion among the Palestinians and Arabs; he tried to restart the negotiations, with the Palestinians holding to their pre-conditions of halting all settlement construction and basing talks on the 1967 borders.

During the three years since, there have been arguments in Washington, Ramallah, in European capitals and even in Jerusalem over whether Netanyahu really meant what he said; whether this was a strategic decision and a new Israeli government policy or merely a good public diplomacy speech written under American pressure.

Many on both the right and left argue that Netanyahu didn't really mean what he said, noting that to this day there has been no cabinet decision affirming the contents of his Bar-Ilan speech. Nor has the Likud party platform been changed to include a readiness to accept a Palestinian state.

Remarks by Minister Benny Begin three months ago during a conference at Hebrew University sowed more doubt about the Bar-Ilan speech's relevance.

"It's no coincidence that there was no such cabinet decision," Begin said, according to recordings obtained and published by the Makor Rishon daily. "It was not brought to the cabinet nor will it be brought to the cabinet. It's not the government's position, which is what enables a person like me to be a member of the government, out of an understanding that there's no such reality as two states."

Education Minister Gideon Sa'ar has also made statements that totally contradict the Bar-Ilan speech.

"Israel must place question marks about the readiness to establish a Palestinian state," Sa'ar said in Ariel in December 2011. "Establishing a Palestinian state is a process with multiple risks. ... We will not put Israel's security at risk on the basis of unrealistic wishes."

But Netanyahu aides involved in the drafting of the Bar-Ilan speech rebuff the doubts. They claim that it was suggested that Netanyahu bring the speech to a cabinet vote, but that he said that it was unnecessary.

"There's no question that the Bar-Ilan speech was a very significant change of direction for Netanyahu," a senior official in the Prime Minister's Office said. "He wasn't saying those things for public diplomacy reasons. Even today, he stands by every word that he said then."

Netanyahu confidants note several occasions since the Bar-Ilan speech during which he seemed to move even further toward dividing the land.

In early April, at a press conference marking the start of the fourth year of his term, Netanyahu said clearly that he fears Israel turning into a binational state. Three weeks ago, at a speech at the Institute for National Security Studies, he said, "A peace arrangement between us and the Palestinians is crucial, first and foremost, to prevent a binational state, and to strengthen Israel's future as a Jewish and democratic state."

Despite the evolution Netanyahu's position on the Palestinian issue went through – his remarks are hardly translated into actions. Netanyahu understands that braking away from the Palestinians is in Israel's best interest, still he sometimes acts against it, for example with respect to settlement construction. He's trapped avoiding the perception that he is sucker.

A Israeli official with whom Netanyahu consulted on the Palestinian issue stressed that Netanyahu understands the strategic damage the hiatus in the peace talks is causing Israel and wants to advance the peace process but only under conditions that make this impossible.

"There is a disconnect between what Bibi understands analytically with respect to the Palestinian issue and what he internalizes and does," the Israeli official said."If he doesn't have a sword to his throat, he won't budge. Bibi wants to be safe from all directions – his coalition, the American safety net, Palestinian commitments – but in policy making you can't wait for all the stars to align for you in the sky."

No small amount of blame for the paralysis can be attributed to Palestinian Authority Chairman Mahmoud Abbas, who described the peace process this week as "clinically dead."

He blames Netanyahu for burying the two-state solution, but he has no clear policy, either. One day he's playing with setting up a national unity government with Hamas, the next day he's pursuing unilateral moves at the United Nations, while from time to time he weighs resuming talks with Israel - if his preconditions are met.

"We haven't resumed talks because of [Abbas'] preconditions," said a Netanyahu adviser. "We know he has political problems and we've tried to give him [opportunities], but for him, if it wasn't 100 percent, he wasn't interested. Every time we got closer he ran even further. We're willing to do a lot, but not at any price."

The exchange of communiqués between Netanyahu and Abbas a month ago was unable to restart the negotiations, but in the past few days, after Kadima joined the government creating a giant coalition of 94 MKs, the U.S. and Jordan have been trying to resuscitate the dying peace process.

Despite everything, efforts to restart the moribund talks continue. Jordanian Foreign Minister Nasser Judeh met with U.S. Secretary of State Hillary Clinton last week in Washington and asked her to try yet again to restart peace talks even before the U.S. presidential election in November.

After that, Judeh spoke at the Carnegie Institute and made surprisingly positive remarks about Netanyahu, calling him "the most powerful prime minister in the history of Israel," adding: "He is able and is enabled to do things. He has the mandate."

Despite American skepticism about the readiness of the two sides to talk, Clinton invited both Netanyahu special envoy Isaac Molho and chief Palestinian negotiator Saeb Erekat to Washington, meeting with each of them over the weekend. She also spoke by phone to Netanyahu and Abbas. So far, no results.

Clinton will be meeting this week with Vice Prime Minister Shaul Mofaz, who is trying to arrange a meeting with Abbas. Mofaz would like to make it look as if Kadima's joining the government led to some diplomatic movement. "The vote on the Olpena exemplifies that significant political action can be passed in the Knesset even with 30 dissenting votes," Mofaz said. "Time isn't on our side – a two-nation state is more dangerous than Iran. We can't continue occupying the Palestinians and go around telling people around the world we want peace."

Despite these efforts, however, nearly everyone in Jerusalem and Ramallah sees the next few months as garbage time. Change, if any, will only come after America's November elections. Barack Obama is interested in jumpstarting the negotiations between Israel and the Palestinians if he is reelected for a second term but will not get personally involved in the issue unless he is sure Netanyahu wants a deal.