Leading article: Unpeaceful gridlock

Two thousand Jewish and evangelical Christian extremists gathered on the West Bank at the weekend to count down the end of Israel's moratorium on the building of settlements on occupied Palestinian land. Next day bulldozers began levelling land, and cement mixers pouring concrete, in symbolic gestures which most of the international community regards as illegal.

The move threatens to undermine the Middle East peace talks only weeks after they were launched with great fanfare at the White House. It leaves Mahmoud Abbas in an almost impossible position. If the humiliated Palestinian President pulls out of the talks he will be accused by the Israelis of scuppering the Washington initiative; if he stays in he will be accused by hardline Palestinian groups, including Hamas, of selling out. He has pronounced that Israel must choose "either peace or settlements" but, wisely, has deferred any decision until he has had talks with the 22 leaders of the Arab League in Cairo next week. There is no rush after nearly two decades of on-off talks in one of the world's most intractable conflicts.

All parties to the dispute are, or can claim to be, gridlocked. Mr Abbas's position is weak; his democratic mandate has run out; yet the overdue elections cannot be held because of the feud between his Fatah party and Hamas. The Israeli Prime Minister, Benjamin Netanyahu, faces heavy pressure within his right-wing coalition to resume construction of the settlements in which as many as half a million Israelis now live. And the broker of the talks, a weakened Barack Obama, is facing elections in November in which he is reluctant to provoke the disfavour of the pro-Israeli lobby.

Behind the scenes Mr Obama is pressing Mr Abbas to remain at the talks despite the refusal by Mr Netanyahu to extend the moratorium on new settlements. He should be putting pressure on the Israelis too to renew the moratorium agreed by Israel in November 2009 under urging from Washington. For Mr Netanyahu is not so boxed in as he maintains. Previous Israeli prime ministers negotiating peace deals had Mr Netanyahu himself always to their right threatening to sabotage their work. There is no comparable figure of stature to Mr Netanyahu's right. There is nothing preventing him from breaking with the right wing of his coalition and bringing the centrist Kadima party into government if he wants to make concessions.

The truth is that he is unwilling. Washington needs to assert some leverage here, privately reminding him that Israel's $2bn annual military aid, and its consistent vetoing of critical resolutions at the United Nations, are not unconditional. Mr Netanyahu should not simply be allowed to refuse to extend the moratorium for another three months – as he should do – without it being seen that there will be significant political cost for his refusal. Even if Mr Netanyahu is unwilling publicly to extend the moratorium for another three months he could, in practice, curb any large-scale new construction, refusing new permits, and hinting to banks and developers that they would be unwise to commit to new building projects. He should also continue the unofficial de facto construction freeze on settlements in east Jerusalem, the sector of the city that the Palestinians claim for their future capital.

Palestinian negotiators are to meet in Ramallah tomorrow. If they can be convinced that the extent of construction in the West Bank will be limited, it might be enough to keep them at the table in Washington. That would be a fudge but it now looks the best hope of keeping the talks going at all. The settlements are only the first of a whole host of thorny issues which will require shaky compromise and creative ambiguity as the talks continue. But keeping on talking is better than the alternative.