As the new government convenes this week, the Likud will be missing its leading advocate for peace, the two-state solution and curbing settlement activity. Dan Meridor, the outgoing deputy prime minister and minister of intelligence and atomic energy, was unceremoniously dumped by his party as it took a hard turn to the Right for the recent elections.

Once one of the rising princes of the Likud, Meridor has long been among Israel’s most respected political leaders.

But as the settlers, ultra-religious and nationalists gained influence, moderates like Meridor were increasingly marginalized and replaced with hardliners like Moshe Feiglin, an outspoken far-right opponent of any compromise with the Palestinians.

Peace with the Palestinians was barely mentioned in the latest Knesset campaign and doesn’t appear on Prime Minister Binyamin Netanyahu’s agenda for his new government, according to a JTA report which said his new coalition’s “priorities will be to prevent Iran from acquiring nuclear weapons, enact budget reform, expand Israel’s mandatory military conscription and lower the cost of living.”

The peace process is at a juncture and Israel needs to make a choice: pursue a final-status agreement or seek interim partial agreements, Meridor said in a conference call from Jerusalem sponsored by Israel Policy Forum.

“Something needs to be done,” he said, and President Barack Obama’s upcoming visit may be “a good opportunity to discuss what and how it may be done.”

The president will not be bringing an American initiative because the parties themselves are not ready, and when they are, it will be up to them to take the lead, not Washington, he told Jewish leaders at a White House meeting last week.

Netanyahu has never shown much enthusiasm for the peace process and while it may not be on his agenda, it is on the president’s – after Iran, Syria, security issues and the Arab uprisings. Obama will not be repeating his firstyear demand for a settlement freeze, but he said he still considers settlements a critical issue.

Meridor agrees. He wants to freeze all settlement activity beyond the security fence and confine growth to the major settlement blocks adjacent to Israel’s border, an area constituting about 6 percent of the West Bank. He said a construction halt should not be to accommodate the Americans, the Palestinians, the Europeans or anyone else, but “because it is in Israel’s best interest.”

His persistent calls for stopping settlements and concentrating efforts on peace negotiations “may be one of the reasons why I’m not in the Likud party now,” he said.

Israel faces increasing international isolation and a threat of sanctions, particularly from its important European trading partners, because of its settlements policy, he said. “Israel is supported around the world on Iran, Syria, Hizbullah, Hamas, but on one issue, Judea and Samaria, we don’t have that support,” Meridor said. He echoed reported views of Yaakov Amidror, Netanyahu’s national security adviser, who has been quoted telling colleagues that Israel’s deteriorating international standing is attributable to its settlement activity, particularly beyond the fence.

Asked what he would do if he were in charge, Meridor said the first thing Israel should do is change its settlement policy, and that he would offer full negotiations with the Arab League and the Palestinians.

“We need to... change the course on which we are now,” he said. Israel needs to have a border, and it should be based on the 1967 lines with “mutually accepted changes.”

“We want a Palestinian state. We want the blocs to be a part of Israel,” he said. “This is a major decision. It will indicate our sincerity, our seriousness.... Israel can’t build settlements all over the place and say it wants a two-state solution.”

While Netanyahu has said several times that he supports the two-state solution, he has never taken that policy to his cabinet or his party for endorsement, Meridor noted.

Israelis and Palestinians have discussed border changes and land swaps in prior talks, but not since Netanyahu came to office. Negotiators made considerable progress during the previous government. “[Then-prime minister Ehud] Olmert offered everything and got no affirmative response,” he said.

Olmert’s foreign minister and peace negotiator, Tzipi Livni, will handle talks with the Palestinians for the new government. It is unclear how much latitude or backing Netanyahu will give her.

Meridor opposes unilateral withdrawal from the West Bank, citing Gaza, where Hamas took control and turned the area into a launching pad for terrorism, rockets and missiles into Israel. There must be an agreement on security and a demonstrated Palestinian ability to govern the area, he said. Meridor fears that without adequate preparation Hamas could try to overthrow Fatah, as it did in Gaza, “and there could be a bloodbath” between the two rival factions that could drag Israel into another war.

“I think we still have an interest in helping as much as we can the PA, the Palestinian Authority, to survive and control the West Bank. We are willing to talk to the Palestinians; whether they will talk with us is an open question,” Meridor said. He believes a vast majority of Israelis and Palestinians “are ready to make the compromises needed to end the conflict” but the big stumbling block is the leadership, not public opinion.

Neither side is ready to negotiate final borders, and he questions whether the Palestinian leadership really wants peace because that would require them to agree to absorb all Palestinian refugees in the Palestinian state and to declare and end to the conflict.

He does not want to see an interim agreement, but if the Palestinians are not ready for final-status negotiations, including resolving Jerusalem, refugees and declaring an end to the conflict, that may be necessary.

In that event, Israel should not stop negotiations or resume construction beyond the fence and the blocs, he said.

If Israel continues its present course with no negotiations and no clear borders there will be one binational state from the river to the sea, and that will be a threat to the Zionist dream of a Jewish state, he warned. “We need to change our course and do what is right.”