JERUSALEM — Tuesday was to have been the day to seal a deal on a Palestinian state alongside Israel. Instead, it became another missed deadline in two decades of negotiating failures. The gaps between Israeli and Palestinian positions remain vast after nine months of talks launched by Secretary of State John Kerry. He hasn't given up, but there's a sense the U.S. may have to change its traditional approach to brokering talks. Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas now face risky paths that could lead to a new conflagration.
WHAT WILL THE U.S. DO?
Kerry has hit the pause button. His point man left the region and the State Department says it will wait to see what the two sides decide in coming weeks and months.
WHAT IS THE NEXT DECISIVE DATE?
By the end of May, Abbas and the Islamic militant Hamas hope to establish a unity government of technocrats that is to prepare for general elections by 2015. It's the latest in a series of reconciliation attempts since Hamas seized the Gaza Strip from Abbas in 2007, leaving him with parts of the West Bank. Abbas says the new government will be bound by his political program of seeking peace with Israel. This way, he hopes to allay U.S. concerns about a partnership with militants who refuse to recognize Israel or renounce violence.
HOW LIKELY IS A UNITY GOVERNMENT?
Hamas, a branch of the pan-Arab Muslim Brotherhood, might be more open to compromise with Abbas than in the past because it's struggling financially and has lost regional backing. Hamas' troubles stem from unprecedented border sanctions on Gaza by the Egyptian military which ousted a Brotherhood government in Egypt last year. Hamas can't meet its government payroll and is eager to have Abbas take over those responsibilities. However, Hamas might balk at relinquishing authority in Gaza or deferring to Abbas' political platform.
WHY DOES ABBAS WANT A PARTNERSHIP WITH HAMAS NOW?
Last year, Abbas reluctantly agreed to negotiations with Netanyahu because he didn't want to be blamed for sabotaging Kerry's efforts. With talks formally over on April 29 and Hamas on the ropes, Abbas believes he can regain a foothold in Gaza, mend the political split and strengthen the Palestinian hand in future dealings with Israel.
WOULD THE U.S. AND ISRAEL DEAL WITH A UNITY GOVERNMENT?
The State Department says it will assess any Palestinian unity government according to its policies and actions. Key questions include who would assume command of thousands of Hamas fighters, and whether a new government will recognize Israel.
Netanyahu says he won't negotiate with any government backed by Hamas, which seeks Israel's eventual destruction and has killed hundreds of Israelis in attacks over the years. Last week, Israel broke off negotiations with Abbas because of his unity efforts.
COULD ISRAELI-PALESTINIAN NEGOTIATIONS RESUME IF THERE IS NO UNITY GOVERNMENT?
Kerry might keep trying or present his own "take it or leave it" plan to the sides.
Abbas and Netanyahu say they are still interested in negotiations. Israel, in particular, benefits from ongoing talks as a way of deflecting criticism of its policies, including settlement construction on occupied lands.
However, Kerry would have a harder time than last year to restart negotiations because gaps on the ground rules have grown. Abbas has said Israel first needs to freeze settlement building and make good on a promise to release more veteran prisoners, demands Israel rejected.
Over the weekend, the Palestinian leadership also withdrew a previous concession of agreeing to a land swap that would enable Israel to annex some "settlement blocs." It also insisted that Netanyahu recognize Israel's pre-1967 war frontier, before its capture of the West Bank, Gaza and east Jerusalem, as a baseline for border talks.
WHAT MIGHT ABBAS DO NOW?
Abbas hasn't yet reached the point of abandoning negotiations and instead challenging Israeli politically and legally in the international arena. Such a dramatic shift is fraught with risk, including tensions with the West and greater economic hardship for the Palestinians, who stand to lose hundreds of millions of dollars a year in foreign aid.
As part of a post-negotiations strategy, Abbas could seek further international recognition of a "state of Palestine," accepted by the U.N. General Assembly as an observer in 2012. Palestine could join dozens of international bodies and press war crimes charges against Israel over its settlement building before the international criminal court.
WHAT MIGHT NETANYAHU DO NOW?
Netanyahu said this week he won't accept a stalemate and will "seek other ways" to deal with the conflict with the Palestinians, but there's no sign he will deviate dramatically from his current policies. Various ideas have been floated by Israeli politicians over the years, including withdrawing unilaterally from or annexing large parts of the West Bank, but Netanyahu hasn't endorsed any of them.
Settlement expansion is likely to continue even though further settlement sprawl steadily closes the door to a partition deal. The anti-settlement group Peace Now says that in nine months of negotiations, Israel promoted plans for close to 14,000 settlement apartments, with the number of construction tenders up fourfold from previous years.
IS A NEW CONFRONTATION IMMINENT?
Neither side seems eager for an escalation, but any step could have unintended consequences.
Abbas has ruled out violence as a tactic and says he will continue security coordination with Israel in the West Bank, but could face Israeli retaliation if he succeeds in forming a unity government, for example.
Netanyahu threatened unspecified sanctions after last week's Palestinian unity deal, but hasn't acted so far. He could freeze the monthly transfer of $100 million in taxes Israel collects on behalf of the Palestinians, as he has done in the past. The next transfer is due next week. However, Israel also has an interest in the survival of Abbas' self-rule government. Its collapse would force Israel, as the occupier, to take responsibility for millions of Palestinians.
WHAT ARE THE LONG-TERM TRENDS?
If neither side adopts a radical shift in strategy, the U.S. could return to trying to manage the conflict. Israel will likely face growing international isolation and warnings — most recently from Kerry — that it could turn into an "apartheid state" if there's no partition deal. The Palestinians' push for a united strategy is being hampered by entrenched factionalism and an intensifying leadership battle in Fatah, the party of the 79-year-old Abbas.
Associated Press writers Lara Jakes in Washington and Josef Federman in Jerusalem contributed reporting.