Omar did not expect his family to be so distraught and despondent when he came home Friday to his home in the town of Al-Khedr on the outskirts of Bethlehem. His father’s health took a sharp blow after occupation forces seized large sections of family land to expand the Jewish settlement of Nogdeem, where Israeli Foreign Minister Avigdor Lieberman lives. Omar, a university student and an activist in Al-Shebiba movement, the on-campus student arm of Fatah, was one of thousands of Palestinians who welcomed Palestinian President Mahmoud Abbas upon his return from New York, in an expression of support of what he said in his speech to the UN General Assembly.

Omar, whose family is in shock, believes that Abbas should now insist on refusing to return to the negotiating table if Israel does not freeze settlements in the West Bank and Jerusalem. Also, that he should reject the suggestion by the Quartet to resume talks with Israel. Omar’s position represents a majority of Palestinians who believe that Abbas’s address at the UN signaled the end of negotiations with Israel if Tel Aviv does not commit to freezing settlements. This is something that the Palestinian Authority (PA) has finally realized.

Complicating matters further for the PA is the fact that the Israeli government announced at the end of last week a plan to build 1,100 new residential units in the settlement of Gilo in occupied Jerusalem. Yasser Abed Rabbo, member of the Executive Committee of the Palestine Liberation Organization (PLO), said that it was impossible to combine settlements on Palestinian land and continuing negotiations with Israel.

Meanwhile, Israel declared that it accepts the general guidelines of the Quartet statement. Israeli Prime Minister Binyamin Netanyahu said that his cabinet can live with the statement, since it did not call for an end to settlements, or indicate a specific frame of reference for negotiations. While Netanyahu is demanding that the Palestinians do not place any prerequisites, such as freezing settlements, he himself is demanding a series of preconditions for the Palestinians. Most prominently, conceding beforehand the Ghor region of the Jordan Valley, which represents 30 per cent of the West Bank. Essentially, Netanyahu is asking the Palestinians to surrender 51 per cent of the area of the West Bank before restarting talks.

The Palestinian position does not seem to be rejected by Israel but by the U.S., which criticized the Israeli decision but at the same time believes there should be a response to the Quartet proposal. U.S. Ambassador in Israel Dan Shapiro said that Obama’s administration rejects the Palestinian demand to halt settlement building before the Palestinians agree to restart talks. “On principle, the U.S. does not support preconditions that state that a freeze on settlements is a prerequisite for negotiations,” Shapiro was quoted in the Israeli newspaper Yediot Aharonot as saying. “Keep in mind we have objected to Israeli settlements in the West Bank for a long time. What we have always said is that we believe that direct talks is the only way to resolve the conflict, and it cannot be solved except by the parties themselves through talks that begin without preconditions.”

Washington not only adopted Israel’s position, but even began exerting economic pressure. The U.S. Congress decided to freeze the transfer of $200 million in aid to the PA, which will affect the latter’s ability to meet its financial commitments towards tens of thousands of government employees in the West Bank and Gaza Strip. Gaza will especially suffer because the PA announced that in light of the U.S. decision, it will not be able to pay the cost of fuel for the sole power plant in the Gaza Strip.

While Washington is directly defending Netanyahu’s position, some Israelis are strongly criticizing him and holding him responsible for the freeze in negotiations. Haaretz newspaper described his cabinet’s policies of continuing settlement building, especially in the West Bank, as “open provocation.”  In an editorial on Sunday, the newspaper argued that Netanyahu’s settlement policy is an obstacle to achieving a two-state solution based on the 1967 borders. It added that Netanyahu’s insistence “to challenge the world and continue settlement building in East Jerusalem undermines his call to restart talks, and could in fact result in serious ramifications for Israel.”

Palestinian sources confirmed that Arab parties have agreed to the U.S. demand and began pressuring the PA to reverse its refusal of the Quartet proposal and immediately return to the negotiating table with Israel. Several Palestinian officials told journalists off the record that countries such as the United Arab Emirates, Morocco and Jordan are putting pressure to relaunch talks and not continuing the gamble on Palestinian statehood at the UN.

One of the main reasons behind the Palestinian refusal of the Quartet’s positions and why Palestinian leaders now view the group suspiciously is because of the actions of Quartet envoy Tony Blair, who is accused by many Palestinian political figures of being entirely biased to Israel and purposefully not conveying Palestinian views to Quartet members.

MP Bassam Al-Salhi, secretary-general of the Palestinian People Party who attends Palestinian leadership meetings, said that Blair has “lost all credibility among the Palestinian leadership and there is extreme caution in dealing with him since he has become a junior employee of the Israeli government.” In a news conference in Ramallah, Al-Salhi added: “An increasing number of Palestinian officials are demanding a boycott of Blair because he did not accurately convey Palestinian positions to international parties and is clearly biased towards Israel and its outlook. Several members in the Palestinian leadership have called for a boycott of Blair and not welcoming him in the Palestinian territories. Blair has lost his credibility and is not impartial as he should be in this post.”

Al-Salhi emphasized that criticism of Blair’s actions is no longer confined to leadership circles in the PA but now includes civic society, noting that there are calls for a boycott by the public. He also warned that if Blair continues as the representative of the Quartet his influence will become even weaker.

The clash between the Palestinian leadership and Israel about the Quartet proposal did not end tensions between the PA and the leadership of Hamas in the Gaza Strip, which continued to criticize Abbas for going to the UN to ask for membership for a Palestinian state. Fatah, which is headed by Abbas, was especially troubled by continued criticism by Gaza Prime Minister Ismail Haniyeh of Abbas, and emphasis that creating a Palestinian state on any part of Palestine is acceptable as long as it does not recognize Israel.

Fatah spokesman Ahmed Assaf described Haniyeh’s statements as “political ignorance.” “Haniyeh’s position means that Hamas approves the creation of a Palestinian state within temporary borders, in the same manner that Israel wants,” Assaf asserted in a written statement. “Statements by Haniyeh and other Hamas leaders about the creation of a state on any land is political ignorance resulting from their lack of political and national experience. They are satisfied to just rule Gaza through force, and in this way justify detaching and removing it from the Palestinian dynamic, as witnessed these days.”

Meanwhile, a number of young Hamas leaders continued to support Abbas’s recent plan. Sources told Al-Ahram Weekly that former Deputy Prime Minister Nasreddin Al-Shaer and former Planning Minister Samir Abu Eta, both members of Haniyeh’s tenth cabinet, visited Abbas on Saturday at his home in Ramallah. The two men expressed their appreciation and support for “the courageous position expressed in Abbas’s historic address to the UN General Assembly in the name of the Palestinian people.”   Al-Shaer and Abu Eta described Abbas’s position as “an honest expression of the ambition of the Palestinian people and their aspiration to achieve freedom and independence.”

The Palestinian leadership currently faces a difficult test of credibility. While Abbas believes that returning to negotiations under the shadow of settlements would be political suicide for him on the domestic front, at the same time rejecting the Quartet proposal and continuing on the UN path to statehood would precipitate more economic sanctions by the U.S. at this critical time.