Israeli security forces gather at the scene following a shooting on an Israeli car near the West Bank city of Hebron
By Luke Baker
JERUSALEM (Reuters) - Ahead of the release last week of a report on the Israeli-Palestinian conflict by the Quartet of Middle East mediators, the word from diplomats was that it would be hard-hitting, especially on Israel and its settlement building.
The United States, the European Union and the United Nations were fed up with Israel's consistent violation of international law, which views all settlements on occupied land as illegal, diplomats said. While Russia, the fourth Quartet member, might be more restrained, Israel was set for a serious ticking off.
Those concerns reached Prime Minister Benjamin Netanyahu's office. Officials briefed that he was determined to talk the Quartet down. He flew to Moscow to see President Vladimir Putin, and met U.S. Secretary of State John Kerry and the EU's foreign policy chief, Federica Mogherini, in Rome.
In the end, after weeks of delay, the report was mild in the extreme. Israeli settlement-building was criticized but not called illegal. The prime focus was on Palestinian incitement. One regional analyst described the overall impact as "banal".
Palestinians were outraged. Chief negotiator Saeb Erekat said the Quartet had attempted to "equalize the responsibilities between a people under occupation and a foreign military occupier". The international community had given in, he said.
Among a number of American, European and U.N. diplomats, there is a fair degree of sympathy with that view.
"There's just no appetite to go toe-to-toe with Israel and deliver a really harsh indictment," said one European ambassador. "No one sees the upside to it."
Privately, diplomats raise a host of concerns about Israel's actions: its restrictions on Palestinian movement, security clampdowns they say amount to collective punishment, the demolition of attackers' homes, the blockade on Gaza, and settlements. But in public, there is far more restraint.
Statements from European Union foreign ministers and U.S. officials often express concern about all those issues, but they fall short of threatening action or concrete censure. It is usually much more about carrots than sticks.
While the European Commission has taken steps to more clearly delineate between Israel and the territories it has occupied since 1967, issuing guidelines on the labeling of settlement goods, officials say Mogherini does not want to go further, favoring a similar approach to her predecessor.
Many EU member states have good and growing relations with Israel. Like Turkey, which last week agreed to restore diplomatic ties with Israel after a six-year hiatus, they see a future of expanding business, trade and energy ties.
Whereas a few years ago Israel mostly had to rely on Germany, Britain and the Czech Republic to defend its interests in the EU, now it can count Italy, Greece, Cyprus, Austria, Hungary and a handful of others among potential allies.
At the same time, Netanyahu has bolstered relations with Russia, talks regularly about a "new horizon" with Egypt, Saudi Arabia and the Gulf, especially when it comes to confronting Iran, and plays up Israel's high-tech links to China, India and Africa, where Netanyahu is on a four-day visit.
"Israel is effective at pulling the strings," said an American official who has worked on Palestinian issues for the past three years. "However much frustration you feel on the ground, it doesn't lead to action from the top."
Late last year, looking for ways to apply pressure on Israel over settlements, officials in the U.S. State Department examined the possibility of suspending loan guarantees, a step last taken by the first Bush administration in the early 1990s.
But they realized pulling the guarantees offered little leverage -- because of low interest rates and Israel's increased economic strength, the country wouldn't have a problem raising funds cheaply on international markets.
It's not only better diplomatic ties and economic levers that have helped Israel counter criticism. The Palestinians have done little to win friends and influence opinion at a time of rising Islamist insurgency across much of the Middle East.
With Palestinian President Mahmoud Abbas, 81, now 11 years into a four-year term and showing no sign of holding elections, there is frustration over the democratic deficit. Polls show 60 percent of Palestinians want Abbas gone.
There are also stark divisions between Abbas's Fatah party and the Islamist group Hamas, which controls Gaza. As long as Palestinians are unreconciled, talk of negotiating a two-state solution with Israel will remain remote at best.
France's plan to hold a Middle East peace conference later this year has irritated Israel, which argues such efforts relieve the Palestinians of responsibility to negotiate directly, but the initiative is not expected to lead to change.
The European Union -- via funds from individual member states and the Commission's budget -- continues to be the largest donor to the Palestinians, plugging holes in their deficit and providing development. But overall, support is being cut, and USAID has reduced funding, too.
The Gulf states, Saudi Arabia and Turkey contribute large amounts of aid, but it is mostly aimed at keeping the idea of Palestine afloat -- it does not come with diplomatic influence that shapes decisions in major capitals. Palestinians themselves tell pollsters they feel abandoned by their Arab allies.
The most outspoken voice left is the United Nations, a body Israel constantly criticizes yet one that can only really bring pressure to bear if the Security Council decides to act.
In an op-ed sent out immediately after the Quartet report, the U.N.'s special coordinator for the Middle East, Nikolay Mladenov, appeared to express frustration that the Quartet's report had not been harder hitting.
"Most Palestinians have lived with the humiliation of occupation all their lives," he wrote. "They do not need the Quartet to tell them about the devastating impact of the illegal settlement enterprise on their lives, their economy and their legitimate aspirations for an independent, sovereign state."
Notably, Mladenov's passionately argued piece was not widely picked up, appearing on the U.N. website and a handful of regional newspapers.
(Writing by Luke Baker; Editing by Dominic Evans)