In a setback for progressive peace forces, J Street—the liberal Jewish alternative to AIPAC—has decided to oppose United Nations recognition of a Palestinian state this month. J Street is also urging President Obama to veto the statehood bid if it comes to the UN Security Council.

The normally rational and liberal New York Times takes the same position, making an inflated claim that the UN vote would somehow be “ruinous.” With Israeli-Palestinian talks chronically stalemated, however, it is difficult to understand what would be ruined by bringing the Palestinians further into the global diplomatic process. The Times and J Street describe the tensions as alarming, but offer no evidence that continued negotiations will be productive. If the UN vote proceeds, the Israelis and many in the US Congress are warning that hundreds of millions in funding for the Palestinian Authority will be terminated. The default position of the liberals at the Times and J Street is their belief that the funding cutoff would be counterproductive.

The progressive Jewish American community is crucial to providing support for evenhanded or pro-Palestinian initiatives by the White House or Congress. Therefore the J Street position, reinforced by the New York Times, effectively shuts down any American maneuverability as the UN decision nears. As a result, the United States is likely to be sidelined and isolated at the UN session. US opposition to any UN recognition will further unite the Arab world in its suspicion of Washington as a possible ally. Turkish Prime Minister Recep Erdogan and Turki al-Faisal, the former director of Saudi intelligence services, are the latest powerful leaders to weigh in. The Saudis are threatening to refuse recognition of the US-backed Maliki regime in Iraq and “might part ways with Washington in Afghanistan and Yemen as well.”

J Street’s decision means there is virtually no dissent in the mainstream American Jewish community from the intransigent positions of AIPAC and the right-wing Netanyahu government. Congressional support for any alternatives is effectively muzzled.

The Obama administration has had to retreat in the face of the so-called Israel Lobby. Initially, the administration had nominated an independent critic of the Israelis, Chas Freeman, to a high intelligence assessment post, and the widely respected George Mitchell as a special representative for the Israel-Palestine talks. Both are gone. Obama’s initial conflict with Netanyahu over settlements has receded as the 2012 elections approach. The neocons, the Christian right and AIPAC may be taking brinksmanship over the cliff.

The Obama administration is frantically trying to prevent the Palestinians from exercising their UN option. There may be a last-moment development in the whirlwind of talks. But it appears that the era when the Israelis could dominate Washington, and Washington could dominate world politics, is over. Ironically, it may be only a UN recognition that will force a meaningful reassessment of policies gone stale. As former Israeli defense minister Binyamin Ben-Eliezer said, “If I were Bibi Netanyahu, I would recognize a Palestinian state. We would then negotiate borders and security. Instead, nothing is happening. We are left with one ally, America, and that relationship is strained too.” The same message was expressed by twenty Israeli intellectuals, artists and writers at a recent meeting with the Palestinian leadership in Ramallah.

Assuming the Palestinian UN bid goes forward, there appear to be two options:

1) The Palestinians seek full statehood from the Security Council, resulting in a veto by the Obama administration and unknown consequences in other capitals and on the ground. Hypothetically, the Palestinians could spare the United States such a humiliating setback in exchange for a secretly negotiated package of diplomatic and economic promises.

2) The Palestinians apply for, and receive, UN General Assembly recognition as a nonvoting observer state, a notch above their present status as a nonvoting observer entity. According to the Times, this would “pave the way for the Palestinians to join dozens of United Nations bodies and conventions, and it could strengthen their ability to pursue cases against Israel at the International Criminal Court.” Vital and volatile issues would remain unresolved between the Palestinians and Israelis, and among the Palestinians themselves. But both Palestinian dignity and Palestinian possibilities to work within international bodies would be enhanced. Most importantly, the relationship between Israel and the Palestinians would become a state-to-state relationship.

Thus a two-state solution would be achieved, with many substantive issues remaining to be negotiated. On one side, the Israelis want a veto over any Palestinian state except one they themselves approve, while some on the Palestinian side, including many American supporters, believe in a one-state solution in which Israelis and Palestinians somehow are dissolved into a single entity, which seems unimaginable.

The contradictory J Street position is that UN recognition of these two states somehow would prevent an effort to reach a two-state solution!

In fact, neither the Palestinians nor the Israelis are prepared to agree on issues of refugees and holy places, and further insistence on such a “comprehensive” outcome before statehood is counterproductive and even risks the resumption of war. By going to the United Nations, the Palestinian leadership is accepting international determination of its contested 1967 borders and the siting of the Palestinian capital in Jerusalem, with the other issues deferred. As analyst Yossi Alpher points out: “When he [Mahmoud Abbas] squares off against an Israeli leader as president of the territorially defined state of Palestine, rather than as chairman of the Palestine Liberation Organization with its roots in the refugee issue, the paradigm will have changed.”

Meanwhile, the “Arab Spring” has changed the dynamic permanently. On the Arab side, no state will be allied with Israel in clamping down on Palestinian aspirations, as Egypt once was. On the Israeli side, as many as 400,000 protesters have been staging sit-ins and marches against their government’s unsustainable priority of subsidizing settlements in the Palestinian territories while vast numbers of Israelis need affordable housing, jobs and education.