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As soon as Prime Minister Binyamin Netanyahu announced that Israel would build 3000 homes on ''East One'' (E-1), the last piece of land connecting East Jerusalem with the West Bank that is not already covered with Jewish settlements, the ritual condemnations started to flow. Even United States Secretary of State Hillary Clinton said that ''these activities set back the cause of a negotiated peace'', and others went a lot further.
The British minister for the Middle East, Alistair Burt, warned that ''the settlements plan ...has the potential to alter the situation on the ground on a scale that threatens the viability of a two-state solution''.
France called in the Israeli ambassador and told him that ''settlements are illegal under international law ... and constitute an obstacle to a fair peace based on a two-state solution''.
Even the Australian Government summoned the Israeli ambassador and told him that Israeli plans to build on the land in question ''threaten the viability of a two-state solution''.
UN Secretary-general Ban Ki-Moon said that the plan would be ''an almost fatal blow'' to the two-state solution, as if it were still alive. And Mr Netanyahu, secure in the knowledge that they wouldn't actually do anything, just stonewalled and smiled.
In almost all the media coverage, the Israeli announcement is explained as an angry response to the United Nations General Assembly's vote last month to grant the Palestinian Authority permanent observer status at the UN, which is tantamount to recognising Palestine as an independent state. As if Mr Netanyahu were an impulsive man who had just lost his temper, not a wily strategist who thinks long term.
Building in the ''E-1'' area, which covers most of the space between the Jewish settlements that ring East Jerusalem and the huge Jewish settlement of Maale Adumim in the Palestinian West Bank, is definitely a game-changer. It effectively separates the West Bank from East Jerusalem, the city that the Palestinians see as the capital of their future state. It also almost cuts the West Bank in two. But it's not a new idea.
The Israeli government declared its intention to build on this land 14 years ago, when Mr Netanyahu was prime minister for the first time. The plan was frozen in response to outraged protests from practically all of Israel's allies, who had invested a great deal of political capital in the two-state solution. But it was never abandoned.
Successive US presidents were assured by various Israeli governments that construction would not proceed there, but most of those governments went on preparing for the day when a pretext to break the freeze would present itself. The land is still deserted today, but there are street lights, electric cables and water mains.
Now a pretext has arisen, even if the UN General Assembly's recognition of a Palestinian state makes little practical difference. Mr Netanyahu has seized the opportunity, as he undoubtedly always planned to. And you can't kill the ''two-state solution''.
To Mr Netanyahu's considerable satisfaction, it is already dead.
Creating two independent states, Israeli and Palestinian, separated by the ''green line'' that was Israel's border until it conquered the West Bank and the Gaza Strip in the 1967 war, was the goal of the 1993 Oslo Accords. That's what the ''peace process'' was all about, but it was really doomed when Yitzhak Rabin, the prime minister who signed the Oslo deal, was assassinated by a right-wing Jewish fanatic in 1995.
Mr Netanyahu was elected prime minister after Mr Rabin's death, and spent the next three years stalling on the transfers of land and political authority to the Palestinian Authority that were required under the Oslo Accords. Meanwhile, he supported a vastly expanded programme of Jewish settlement in the West Bank, although it was obvious that this would ultimately make a Palestinian state impossible.
After a two-year interval when the Labour Party under Ehud Barak formed a government and seriously pursued a final peace settlement with the Palestinians, the Israeli right recovered power in 2001 and has relentlessly pursued the project of settling Jews on Palestinian territory ever since.
The number of Jews living in the West Bank has doubled in the past 12 years, and they now account for one-fifth of the population there. Jewish settlements, roads reserved for Jewish settlers, and Israeli military bases and reservations now cover 40% of the West Bank's territory. But to retain US support, Mr Netanyahu still has to pretend that he is really interested in a two-state solution.
That's why he had to wait for the right excuse before building on ''E-1'' and sealing East Jerusalem off from the West Bank. But he always intended to kill off the ''peace process'', and in practice he succeeded long ago.
Why do his Western allies in the United States and elsewhere put up with this fraud? Because they cannot think of anything else to do.
• Gwynne Dyer is an independent London journalist.