The first elephant in the living room is Hamas and Gaza... with Hamas in control of a big part of the Palestinian population and clearly at odds with Abbas' PLO faction, it would be appropriate to ask how does Abbas plan to get the Gazans to abide by whatever agreement he cuts with Israel. Hamas is receiving support from Iran, which also opens up the question as to how can you keep the Iranian situation off the table...especially when they also control Hezbollah and have strong influence in Syria and by extension Lebanon.
Second elephant is the Israeli electorate. Israelis are weary of any negotiations because of years of frustrations following the 1993 Oslo agreement; frustration which have moved the Israeli electorate ever to the right on issues of security and the relationship with the Palestinians. Any agreement that Netanyahu reaches with Abbas is likely to open up a National debate and will very probably destabilize the ruling coalition, forcing a realigment of political forces which will delay any possibility of real agreement. Most likely outcome: Netanyahu dumps the more intransigents of his right wing coalition members and brings in Kadimah (Center) to ensure the stability of the government. This move might also force on Netanyahu concessions that might be unpopular even with members of his own Likkud party.
Third elephant is the fact that the internal Palestinian civil war is far from over. While Israelis will have to go through a complicated negotiation process to realign the political landscape, they will eventually get there. Abbas has no chance of gaining credibility as representative of all Palestinians without resolving the Hamas-PLO feud first, and with Hamas insisting on the destruction of Israel as a starting point, any agreement with the Jewish state looks like a moot point.
Fourth elephant is that while western observers believe that what it takes for the Palestinian grassroots to accept Israel is improving their economic situation - and Fayyad has been doing a wonderful job in that score - for most Palestinians the issue of resolving the conflict is about pride and recognition according to Palestinian polls. If every Palestinian becomes rich overnight, they will still feel that Israelis need to compensate them for what their families lost in 48' because it is not about money but about feelings and pride.
The expectations are so low indeed that Avigdor Lieberman, Israel's Foreign Minister, openly said "The more we lower expectations, the healthier it is". Not even most diplomats give the process much of a chance, with the exception of Tony Blair and George Mitchell.
What is then the whole point of this exercise? In the immortal words of Golde in "Fiddler on the Roof" - the hope that the Bride and Groom will "Learn to love each other". Or you can say that the parties are coming to the table "Because daddy asked us to" where Daddy is, of course, the US and Obama.
So if we are to understand the meaning of this upcoming talks, we need to look at them in the context of US policies. Neither Israelis nor Palestinians are ready to tie the knot, but the US is pressuring them into coming under the Chupah.
The US is understandably worried about several issues when it comes to their Middle East strategy. There is the Russian gambit of trying to solidify a military alliance to counterbalance NATO with participation of a number of Muslim countries in Central Asia and the Middle East. While Erdogan's about face on the Mavi Marmara incident appears as a partial victory for the West, there is as well the problem of Russian-Iranian ties and the Syrian participation in the group. There is of course the Iranian Nuclear threat itself, which recently became more urgent with the Russian supply of Nuclear fuel to Iran and the Iranian announcement of the establishment of additional Uranium enrichment facilities. There is also the failure in eliminating the Taliban threat in Afghanistan and the withdrawal from Iraq. On top of all this there is the very real threat of a fragmented Islamist terrorist enemy that is very difficult to fight precisely because of its fragmentation, and the threat posed to the American Arab allies by both, Islamism and Iran. America needs to eliminate the Israeli Palestinian conflict from the equation to have any hope of addressing effectively any of the other issues.
So what is the possible deal? I see three possible scenarios:
First scenario: Israelis and Palestinians surprise the world by actually reaching a mutually accepted agreement. To this agreement follows political instability in Israel, a realignment of political forces and an eventual ratification of the agreement by the Knesset. On the Palestinian side, the agreement provokes an open confrontation between Hamas and the PLO with open warfare between the sides, with three possible outcomes: First, a formal secession of Gaza from the Palestinian Authority that leaves the agreement valid only with the West Bank and leaves Israel with the problem of dealing with Gaza. Second, a bloody civil war in Gaza and expanding to the West Bank that will not only have a high price tag in Palestinian bloodletting but will also increase terrorist activity against Israel. Third, Abbas violently takes over Gaza with Israeli support, leaving Abbas with control over a disgruntled population and forcing him to establish a highly repressive regime not very different from the Hamas led administration Gazans have now.
Second scenario: America weights in with the Arab Peace Plan proposed by Saudi Arabia, modifying it to eliminate the demand on the Right of Return that would spell the end of Israel as a Jewish State. Both sides are forced to accept it reluctantly and both leaders - Netanyahu and Abbas - need to deal with political instability and social unrest in their own sides of the eventual line, opening the possibility of splinter groups utilizing terrorism as a weapon.
Third scenario: The conversations fail, casting a negative light on America and the Obama administration and further undermining America's image in the world stage. On the ground, this would bring about a further radicalization of Palestinian society and an increase of the power of the right wing coalition partners in Israel, moving the sides further apart rather than closer.
In the meantime, Iran waits in the sidelines, ready to fill in the vaccum of power in the Middle East (with Russian help).
My opinion? Israeli-Palestinian Peace can only be achieved through direct negotiations, but the preparations for it need to include more person-to-person contacts between Israelis and Palestinians on the ground to demystify "the other". Only when Israelis and Palestinians can look into each other's eyes and each acknowledge their own failures in the relationship can the conversation work. There is no need to resolve every single difference of opinion at once, but it is necessary to create an environment in which people can talk - something that today doesn't exist. Creating that environment should be the focus of the process, Maybe then Bride and Groom can come willingly under the Chupah and tie the knot.