A US announcement on Tuesday, admitting Washington's failure to persuade Israel to renew a three month moratorium on illegal settlement construction in the occupied Palestinian territories, has generated much Arab consternation and Israeli back patting.

Leading Israeli settlers claim that the US announcement is proof that Tel Aviv's mission to derail talks was a success.

Ghassan Al-Khateeb, spokesman for the Palestinian government in Ramallah, said the US “is now trying to make us regress by encouraging indirect talks between the PA and Israel, in the hope that conditions will eventually be conducive for negotiations.”

Speaking to Ahram Online, Al-Khateeb stressed that Washington’s announcement is proof that Israel was never serious about achieving peace based on an end to occupation. He urged the world to seek alternatives to resolving the conflict and guarantee a comprehensive end to Israeli occupation.

“Although Obama’s administration has said it is unable to make Israel commit to freezing settlements, we are declaring our commitment to negotiations as the means to resolve the conflict,” Al-Khateeb stated.

“Meanwhile, we are busy preparing for independence and building state institutions and occupied with developing international recognition for a free and independent Palestine.”

Al-Khateeb noted that the US’s failure in coercing Israel to adhere to international law has created a new reality in which the international community, the US included, must consider new routes to peace -- forsaking direct talks.

“The international community is unanimous in saying that the only choice to end the conflict is direct negotiations,” he said. “But if it is unable to change the US’s position, then it should assist the Palestinians in finding other solutions.”

According to Al-Khateeb, the Palestinian leadership will now consult with the Arab League follow-up committee before taking a final decision on the US’s failure.

Yehia Moussa, the leader of Hamas’s parliamentary bloc, declared that the US’s decision forces the Palestinian leadership to revise its political track, forming a new national strategy based on revised principles.

“It is important to take a clear position towards Washington since it has become apparent that the US administration is not an impartial mediator but rather a principal partner with Israel in its aggression and occupation of the Palestinian people,” Moussa told the Ahram Online.

He warned against naively trusting that negotiations are “a means to achieve the national goals of the Palestinian people after 16 years of non-stop talks, from which the Palestinians have reaped nothing but disappointment.”

Moussa believes that the only response to the US’s announcement is to “concentrate efforts to end internal divisions and form a national plan to resist occupation.”

Israeli cabinet secretary Zvi Hauser blamed the PA for the failure of talks, describing the demand to freeze settlements as “not the proper way to end the conflict.” Speaking to Israel Radio, Hauser said: “The Palestinians must realise that they have no right to place preconditions on negotiations,” adding that the US had “gone down a dead end on this issue.”

Meanwhile, Dani Dayan, the chairman of the Council of Jewish Settlements in the West Bank, boasted that the “settlers succeeded in forcing Netanyahu’s government to adopt a policy which in the end made the US administration acquiesce.”

“Without a doubt, we have proven that when Israel stands fast, the whole world -- including the US -- will accept our positions which we form based on our national interests,” Dayan told Israel Radio.

Shaul Mofaz, chairman of the Knesset’s Foreign Affairs and Defence Committee and a leading figure in the opposition Kadima party, said that focusing on settlements was a big mistake from the beginning.

“The solution is to work on establishing a Palestinian state in a manner which protects our national interests,” Mofaz told Israel Radio, warning that maintaining the status quo means accepting that an extensive war will break out in the region.