If you go by President Barack Obama's rhetoric, Israeli Prime Minister Benjamin Netanyahu has single-handedly sunk the Israeli-Palestinian peace process. The United States has been forced to "re-assess our options," the commander in chief has said, including supporting Israel at the United Nations, on the basis of Netanyahu's election-eve statement opposing a two-state solution.
The Israeli leader has already walked those comments back. In any case, he held almost exactly the same view in 2009, when he reasoned that since a Palestinian entity wouldn't have all of the trappings of sovereignty - control of airspace, a fully-equipped army, etc. - it could not really be a state. But the truth is that the Palestinian cause was sunk years ago, and by the Iranians, not the Israelis.
The heart of the Palestinian problem - the reason it's so intractable - is that the radicals have always been more influential than their popular support would indicate. Opinion polls showed that majorities on both sides generally supported a peace agreement, but the Palestinian extremists could veto a deal without consequences.
The radicals, like the Palestinian Liberation Organization until 1993 and Hamas afterwards, were so powerful because there was always an Arab state willing to back them. For most of the Cold War, the Palestinian cause was used by countries like Egypt and Libya to shore up support for their own sclerotic regimes. The Palestinians were thus lied to. They were told for decades that theirs was a holy cause, that the right of return was sacred and that their land would be liberated, even if it took a thousand years. So they incorporated maximalism into their demands and militarism into their national movement, to the point where no moderate would ever give them the unvarnished truth: that Israel would stay, and they were never going home. This balance held as long as there wasn't an existential threat to the survival of the shaky Arab regimes of the Middle East on the horizon.
But things have changed. Today, the Sunni Arab states, like Israel itself, aren't talking about the Palestinians. They're talking about Iran.
In truth, they have been for some time. In the decade since the overthrow of Saddam Hussein's regime in Iraq, the region has seen the emergence of a consolidated bloc of Shia states (Iran, Iraq, Syria and Lebanon) that is at least an equal to the Sunni bloc and is quite possibly stronger. With the unfolding negotiations over Iran's nuclear program, and the growing possibility of a deal that might leave the Islamic Republic's atomic effort largely intact, this state of affairs has become a full-blown crisis.
Iran, of course, has itself been a sponsor of the Palestinian cause, as well a major proponent of Palestinian radicalism since the 1979 Islamic Revolution. But today, the regime in Tehran has bigger dreams. Like the Obama administration, Iran's ayatollahs are invested in a nuclear deal - one that promises not just to lift economic sanctions against them, but also to remove the U.S. as an active opponent in the region, allowing them and their Shiite allies to dominate the Middle East. In that calculus, support for Palestinian "resistance" is liable to be seen in Tehran as a decidedly disposable endeavor, since a major threat to Israel is one of the few factors that could reignite U.S. opposition.
Without the Sunnis, and without Iran, the Palestinian cause is finished for now, regardless of Netanyahu's politicking. The Palestinians just don't know it yet.