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The peace process, intended to advance Israel's main strategic interest by achieving a two-state solution, is in deep crisis. Efforts by U.S. special envoy George Mitchell to renew negotiations on a final-status agreement have reached an impasse. Palestinian President Mahmoud Abbas has announced his intention to retire from political life; over the weekend he called for "resistance" along the lines of the protests at the West Bank towns of Bil'in and Na'alin. The dispute focuses on the expansion of settlements in the West Bank and the Jewish neighborhoods in East Jerusalem. The international community, led by the United States, supports the Palestinian demand that Israel stop creating facts on the ground in the territories during the negotiations.

The approval of the plan to build 900 housing units in Gilo over the Green Line does not conform to Prime Minister Benjamin Netanyahu's call to renew talks. The demolition of Palestinian houses in the village of Isawiyah in East Jerusalem does not improve the murky atmosphere characterizing Abbas and Netanyahu's relationship. Israel's unilateral steps in Jerusalem corroborate Hamas' claim that the Oslo process was a mistake and strengthens Hamas' call for violent opposition to the occupation.

The Israeli claim that there is no difference between Gilo and the central Jerusalem neighborhood of Rehavia only throws sand in our eyes. Although the Knesset has extended Israeli law to annexed areas east of the Green Line and has defined them as part of Jerusalem, Israeli governments have committed themselves to negotiate the issue of sovereignty in these neighborhoods. Two prime ministers, Ehud Barak and Ehud Olmert, even discussed the issue with the Palestinians.

In his first term as prime minister, Netanyahu acceded to Bill Clinton's tough demand to use his authority to evacuate Jewish settlers from the heart of Palestinian neighborhoods in East Jerusalem. Netanyahu said he had agreed to do so out of a desire to push the peace process ahead and maintain calm in the capital. These explanations are still valid, even more so. If Netanyahu is dedicated to a solution that will ensure Israel's future as a Jewish, democratic and safe country, as he says he is, he must immediately order a halt to construction and demolitions in East Jerusalem. His claims that he did not know and cannot intervene are not persuasive, and they are being interpreted as a lack of leadership.