I’ve got to hand it to Bibi – in spite of the very difficult political hand that he’s been dealt, I think he’s played his cards very well.
His latest move, to invite Abbas for Peace Talks without pre-conditions was brilliant. It is pretty clear that the PA is not interested in striking a deal with Israel, they are probably working on the assumption that the longer they wait the more pressure Obama will put on Israel to make concessions – i.e., the Palestinians believe that they can get everything they want (settlement freeze, American financial support and military training, removal of checkpoints etc) without having to take even minimal steps in return.
By inviting them to direct talks, Bibi is clearly putting the ball in their court. If they refuse to hold talks (which is likely), Bibi can rightly say that he is doing everything he can to strike a deal, but there seems to be no one to talk to on the other side.
Should Abbas surprise everyone and show up for Peace talks, Bibi can say that they can discuss anything they want as soon as they meet their Road Map obligations (disarm terrorists, stop incitement against Israel etc.)
There is almost no way that Abbas has the will or the ability to meet these obligations, but showing up at talks with Israel would highlight how poorly he’s met his own obligations.
In the mean time, as long as it is Israel that is calling for peace talks and the Palestinians who are rejecting it, hopefully the State Department and the Obama administration (not to mention the Europeans) will take some of the pressure off Israel and put it back on the Palestinians.
I doubt that his move will really soften the stance of the current US administration, but it’s probably the best option that Bibi has right now.