When it voted to upgrade Palestinian statehood status from “observer entity” to “non-member observer state”, the United Nations General Assembly (UNGA) wanted the enduring Middle East conflict to come full circle. But it failed to take into account the Israeli Prime Minister’s opposition to a state of Palestine that isn’t on his terms.

Sixty-five years back, on Nov. 29, 1947, the UNGA voted in favour of the division of the British Mandate of Palestine into two states – one Jewish; one Arab. Jewish leader David Ben-Gurion accepted the Partition Plan which, six months later, led to the birth of Israel. But the Arab ‘No’ at the UN resulted in the stillbirth of Palestine.

Last week, it was Israel’s turn to say ‘No’ to President Mahmoud Abbas’s plea that the world’s forum grants Palestine its “birth certificate”. In effect, Israel said ‘No’, not only to Palestine, but to the world’s idea of Middle East peace based on a two-state solution. Israel was never so isolated.

Yet, so long as Israel refuses to end its occupation of the “State of Palestine” (and not merely of “Palestinian territories”, as the UNGA vote now seems to imply), not just real independence for Palestine but the end of the conflict will remain a forlorn vision.

The second plank of the Palestinian UN application for non-member status did refer to “the urgent need for the resumption and acceleration of negotiations within the Middle East peace process.”

And it went on “Reaffirming its commitment (…) to the two-state solution of an independent, sovereign, democratic, viable and contiguous State of Palestine living side by side with Israel in peace and security on the basis of the pre-1967 borders.”

And yet, no one really expects a full-fledged Palestine or a resumption of peace negotiations any time soon.

At the beginning of his term, Netanyahu seemed to come to terms, albeit reluctantly under U.S. pressure, with a future Palestinian state. There was no explicit ‘No’ in Netanyahu’s vision of Palestine, but there was a big ‘If’.

“If the Palestinians recognise Israel as the Jewish state,” he declared in June 2009 during his only meaningful peace policy speech, “we’re ready to agree to a real peace agreement, a demilitarised Palestinian state side by side with the Jewish state.”

Apart from a ten-month moratorium on settlement construction, Netanyahu’s verbal “readiness” never translated into tangible policy. Rather, he insisted on negotiations without pre-conditions – synonym for ‘Let’s start it all over again’ without acknowledging progress made by his predecessor Ehud Olmert.

Two onslaughts on Hamas in Gaza – one in 2008-9 by Olmert; the other by Netanyahu last month – have framed four years of diplomatic paralysis, and almost unabated settlement activity.

The peace front briefly revived in 2010 when, three weeks before the end of the settlement freeze, Abbas agreed to renew negotiations with Israel. In spite of joint U.S.-Palestinian insistence that Netanyahu maintain the suspension, expansion resumed. Talks collapsed.

Although meant to censure Netanyahu’s settlement policy, the UNGA upgrade of statehood status is primarily intended as recognition of the need to bolster Abbas’s status in Palestinian eyes, especially in the wake of Israel’s military operation against Hamas.

In a sense, the rival nationalist and Islamist camps are now even. While Hamas is locked in its refusal to recognise Israel’s right to exist and argues that only armed resistance can force it to wrap up its occupation, Abbas comes back to Ramallah with a message to his people – non-violence and diplomacy pay.

Like Hamas, Israel likes to point out that post-statehood bid Abbas still rules a state without territory and borders; rules neither the Gaza Strip (under Hamas rule) nor the West Bank and East Jerusalem (under Israeli occupation).

Israel is oblivious to the new diplomatic order created by the historic vote. In a reaction reminiscent of the refusal by Arab leaders to admit Israel’s victory during the 1967 war, deputy foreign minister Danny Ayalon called the vote “a historic defeat for the Palestinians.”

“Abbas called for peace – but not with us,” was minister of strategic affairs Moshe Ya’alon’s response to Abbas’s “unilateral maneuvering”.

Other ministers accused the Palestinian leader of violating signed accords. They threatened to take punitive measures “at the proper time” were the Palestinians to decide for instance to use their newly-acquired right to pursue Israel in the International Criminal Court for its own infringements of past agreements, like settlement expansion and suspected war crimes.

That could happen sooner than expected.

Less than 24 hours after the UNGA vote, a senior official confirmed that the Israeli government’s inner cabinet of senior ministers responded by approving the construction of 3,000 housing units in existing settlements.

It also vowed to further planning procedures for thousands of additional units in and around East Jerusalem, especially in an area designated as “Project E1”.

If implemented, “Project E1” would sever East Jerusalem from the West Bank and thus would make the establishment of the capital of the Palestinian state in the holy city virtually impossible.

“This is a meaningless decision that won’t change anything on the ground,” declared Netanyahu about the UNGA vote. He knew what he was talking about.

Less than two months to go before they go to the polls, most Israelis seem in harmony with Netanyahu.

Barely 300 left-wing Israelis demonstrated in support of Palestinian statehood in front of Tel Aviv’s Hall of Independence where Ben-Gurion declared their state’s independence.

After having stood so strongly beside Israel at the UN, the U.S. might feel betrayed by Netanyahu’s settlement decision.

But Netanyahu has no intention of letting the smallest margin of error disprove polls which steadily suggest that he is ensured to succeed himself at the head of an ever more right-wing coalition. And, he has no intention of letting the Palestinians spoil his own vision of a state of Palestine.

Pierre Klochendler is a contributor to Inter Press Service.