Prime Minister Benjamin Netanyahu and his cabinet colleagues are reminiscent of the families profiled on Alon Gal's series on Channel 2, who buy everything they can get their hands on in installments. At the end of the month, when the bank says they have defaulted and closes their accounts, they blame the rest of the world.

For the past year and a half, ever since his promising speech at Bar-Ilan University, Netanyahu's shopping basket has been bursting with American-made goodies: brand new fighter jets, an entry ticket into the Organization for Economic Cooperation and Development, a flak jacket against the Goldstone report on Operation Cast Lead, and a life preserver against the ripple effect of the flotilla incident. Moreover, the police chief of the free world granted his client Netanyahu free parking in the West Bank and East Jerusalem settlements, after construction there had ostensibly been frozen for 10 months.

Illustration. Amos Biderman

The prime minister was supposed to pay for all this by entering into serious talks with the Palestinians on the core issues of the conflict. Hard currency indeed; but Defense Minister Ehud Barak, Netanyahu's right-hand man, and the one who is supposed to represent the left in the government, convinced everyone that Bibi wouldn't leave without paying.

Payment time came during the spring. Over the course of the proximity talks, Palestinian Authority President Mahmoud Abbas deposited with U.S. envoy George Mitchell a detailed proposal on permanent borders and security arrangements in the territories. Netanyahu invented excuses about political liquidity difficulties and obtained more and more arrangements by which he could pay in installments.

When the time came to renew the moratorium at the end of September, U.S. President Barack Obama sent Secretary of State Hillary Clinton to Netanyahu with a bargain package: a squadron of F-35 fighter planes and a commitment to veto proposals made in international forums for unilateral recognition of a Palestinian state. All this in return for a public Israeli commitment to a three-month moratorium on construction in West Bank settlements and to avoid provocations in East Jerusalem.

After such a tempting deal failed to pass in the cabinet, the Americans finally concluded that Netanyahu was merely leading them by the nose. But they're not certain whether Barak knowingly sold them a pig in a poke, or whether he too (like President Shimon Peres ) believed the prime minister really had changed.

When Clinton recently invited Kadima leader Tzipi Livni to a private meeting, this signified an unofficial announcement that Netanyahu's account in Washington has been closed. Clinton's speech, in which she demanded that Netanyahu once and for all declare where he proposes the border should run between the two states about which he spoke at Bar-Ilan, was a public declaration of the revolution in the relations between the Obama and Netanyahu administrations.

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The American policy makers have come to the conclusion that the current government and a permanent status agreement are oxymorons. As such, they are no longer interested in hearing Netanyahu's and Barak's excuses about "coalition problems." There go the installments, discounts and bargains.

In American eyes, the resignation of the right-wing partners, Kadima joining the government and even early elections, have become necessary steps toward achieving an agreement between Israel and the Arabs. Twelve years ago, when Hillary Clinton's husband realized that Sara Netanyahu's husband had no intention of honoring his signature (on the Wye River Accord with Yasser Arafat ), that was Netanyahu's last stop before being sent back to his villa in Caesarea.

Western winds

Obama and Clinton aren't going to collect the debt themselves. The bloated liability has been dispatched to bailiffs' offices around the world. Latin America has already sent a first warning, prior to recognition of a Palestinian state along the 1967 borders. A second warning is now being issued by the European Union. A letter calling upon the EU to exact a price from Israel has been signed by 26 outstanding European leaders of the past decade - an initiative riding on the tailwind from across the Atlantic.

The European Union has already taken away from Israel the carrot of upgrading relations. If Mitchell leaves empty-handed again, it will bring out the stick.

The meeting Mitchell is expected to have this week with Arab League representatives is one worth paying attention to, as it is the first step on the new route adopted by the Obama administration after direct negotiations hit a dead end. A senior EU source explained to me yesterday that we are now seeing a combination of a return to the Madrid process - which was initiated 19 years ago by the elder George Bush - and the Arab peace initiative of March 2002. Their common denominator is the pursuit of a comprehensive peace agreement between Israel and the Arab nations on the basis of June 1967 borders.

In addition to direct and separate talks between Israel and a Jordanian-Palestinian delegation, the Syrians, and the Lebanese, the 1991 Madrid Conference also launched multilateral tracks between Israel and the countries of the region on a series of issues - among them: arms control, water, economic cooperation and a solution to the refugee problem.

Obama recently renewed his efforts to bring the Syrians into the circle of negotiations and to extract from Saudi Arabia and the Gulf states positive signals toward the Israel public. The buzz from such moves has encouraged the head of the Hamas government in Gaza and even its boss in Damascus, Khaled Meshal, to promise they won't undermine an agreement and will be content with submitting it to a pan-Palestinian referendum.

In all likelihood, these initiatives will have to wait for the next Israeli government. The Arabs, too, have lost their last shreds of trust in the current government's intentions to achieve peace. And they, too, are pinning many hopes on Livni.

Contrary to the claim made by a New York Times commentator that Abbas rejected Ehud Olmert's generous proposal, the woman who was the foreign minister in his government has said on a number of occasions that the Palestinians did not reject this proposal and that it is sitting on the shelf waiting for an Israeli partner.