Recent reports in the Israeli media suggest Benjamin Netanyahu is about to present a diplomatic initiative, probably accompanied by a partial, limited time, settlement freeze. It is unclear whether this plan is coordinated with the US administration and the European Union.

UPDATE: 30 minutes after I posted this item, Haaretz's headline declared Netanyahu about to bring limited settlement freeze before cabinet.

Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak seem to be thinking that the diplomatic stalemate is beginning to cause them damage, both on the domestic and international levels. Barak runs the real risk of a split in Labor if the government fails to come up with some sort of initiative soon. Netanyahu is worried about other plans being put before the public by rival politicians. But the real threat for both Barak and Netanyahu is the two contradictory ideas the Palestinians are discussing: a unilateral declaration of independence and the dismantling of the Palestinian Authority.

According to Yossi Beilin, Netanyahu will soon announce a settlement freeze that will not include existing projects, the so-called "settlements blocks" and East Jerusalem. Then he will invite the Palestinians to renew the negotiations. UPDATE: Alex Fishman reports in Yedioth that the IDF is already preparing for a construction freeze.

Maariv's Ben Caspit revealed last week that Barak and President Shimon Peres are working on a way to make the two sides come to the table. According to this new idea, both Israel and the Palestinians will receive official letters from the US administration addressing their main concerns. Israel will get a paper acknowledging the Jewish nature of the state and a promise that the Palestinian state will be de-militarized; the Palestinians will be promised that the negotiations will be limited in time and that the territory they will get at the end will be equal in size to the West Bank and Gaza.

According to Netanyahu's idea, by the end of a certain time frame, the Palestinians will be able to declare independence on temporary borders (roughly the territory they hold now), and a time table for a permanent deal will be set.

Haaretz reports that Uzi Arad, the head of the Israeli National Security Council and the top advisor for Benjamin Netanyahu, said today that the government hopes to resume negotiations with the Palestinians "within the next few weeks", and that a move forward with the Palestinians is more important right now than the Syrian front (Chief of Staff Gabi Ashkenazi is said to be pushing for an agreement with Syria, and there are many indications that the Syrians are more than ready to reach a deal. On the other hand, no Israeli leader is willing to commit to a complete withdrawal from the Golan Heights).

Netanyahu has already begun to preapre public opinion for negotiations. Last week Aluf Benn, Haaretz's diplomatic correspondent, described a surprising phone call he received:

I could hear the prime minister's familiar voice on the telephone. "I want to advance a peace agreement with the Palestinians. I am capable of achieving an agreement. I have the political will inside me," Benjamin Netanyahu told me. He repeated this message during his speeches at the General Assembly of Jewish Federations in Washington and at the Saban Forum in Jerusalem: great concessions, generosity of spirit, territorial compromise, let's start negotiations and surprise the world, he said.

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ANALYSIS: "I believe him," says Benn of his conversation with the prime minister (read his reasons here). And while I doubt Netanyahu's motives and capability, I also think he understands that negotiations are in his interest right now. The problem is that nobody is willing to pay the political price for it. Just as Obama is careful not to put the heat on the Israeli government and cross a line that will hurt him with the Jewish community, Netanyahu doesn't seem to be able to confront the Right flank of his government (he knows why: on his last term, it cost him his seat). Like someone who's about to jump in the water on a cold day, he hesitates and hesitates, and while doing so, gets even colder. Starting negotiations would have been easy in April. But since than we had the Goldstone Report and Abu Mazen's "resignation" with all the bad blood it brought, so now there is just too much hostility and uncertainty in the air for the leaders to even meet.

I agree with Yossi Beilin that if Netanyahu announces a partial freez and the US takes that as "sufficient effort" for renewal of negotiations, it will be a disaster. Israel will see and use this as recognition to its claims to the settlements blocks and East Jerusalem. Not even the most pragmatic Palestinian leader can - or should - accept that. If the administration backs Israel here, it stands the risk of doing more damage than George Bush did in his eight years in office.

A temporary state - or rather, a permanent one on temporary borders - is a bad idea as well. Basically, it's Oslo all over again - the one thing everyone agrees didn't work. So why is Israel pushing it again? The answer is simple: the whole idea behind Oslo was to postpone the evacuation of the settlements, the most difficult task for an Israeli leader. But as we learned over the last decade, there is never "a right moment" to deal with the settlements. There is only a question of political will. Just as a Palestinian leader will have to find the will to confront his people on the issue of the Right of Return.

There is, however, one idea worth looking at: an American commitment to giving the Palestinians the whole territory at the end of the process. This could bring back some trust between the two sides, and if it the Americans recognize Israel as a Jewish state in return, it won't force the Palestinian president to betray the Arab minority in Israel.

But here is my basic concern regarding the whole process: The Geneva Initiative details a plan of withdrawal from the West Bank by which Israel gets to keep most settlement blocks and the Jewish neighborhoods of East Jerusalem, much like what Israel asks for now. Yet this plan was rejected by the entire Israeli leadership - from Likud to Kadima. It's just like Israel's wish to negotiate with Syria "without preconditions," even though we already had several rounds of negotiations, and both sides' positions are well known.

There isn't really a lot to negotiate. The solution is known, the offers are on the table, and the price is set. As I said, it's just a question of political will and determination. I suspect both the Israeli government and public are not quite there - and lately, I'm beginning to doubt if they will ever be.

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