John Kerry's relentless pursuit of an Israeli-Palestinian peace agreement may not deliver the goods but it will answer a key question. Is Israeli Prime Minister Benjamin Netanyahu truly committed to a two-state solution? The answer to that question will dramatically reshape the Israeli-Palestinian conflict and how the world sees it.

Netanyahu is on the record supporting a two-state solution but many assume he prefers the status quo. If Netanyahu pursues a peace agreement in good faith, he'll lose his right-wing base and risk losing a significant faction in his coalition. It's no surprise he's done little to move the talks forward. 

Kerry's proposed framework agreement will outline fixed, defined parameters to guide final status talks. The most important final status issues are final borders; the future of Israeli West Bank settlements; whether Jerusalem can be a shared capital for both states; water rights; the Palestinian demand that refugees have the right of return to their former homes in Israel; and the vexed question of security: when and how Israeli forces will withdraw from the West Bank, and how long they may stay on in the Jordan Valley.

Then there's Netanyahu's additional demand that Palestinians recognise Israel as a Jewish state. Neither Jordan nor Egypt were asked to do so when they signed peace agreements with Israel. So far, Palestinian president Mahmoud Abbas seems unlikely to accede to that demand.

If either leader categorically objects to any principle outlined in the agreement, the talks could be stillborn.

To ensure that doesn't happen, Kerry has offered the leaders some wiggle room. Speaking to the Washington Post, the Secretary of State said he wants to allow each side to express its reservations about the framework. This, he says, is 'the only way for them to politically be able to keep the negotiations moving'. It's probably safe to assume Kerry's framework has been met with significant hostility behind the scenes. No surprises there.

Neither Netanyahu nor Abbas want to be blamed for the collapse of talks. And for good reason, as the stakes couldn't be higher. By appeasing the ultra-right faction in his coalition, Netanyahu will open the floodgates to economic boycotts that are already gaining momentum. A 'medium-range scenario' prepared by Israeli Treasury shows the Boycott, Divestment and Sanctions movement (BDS) shaving up to 11 billion shekels (US$3.4 billion) off GDP each year. Israel's GDP was $287 billion in 2011, according to the World Bank. 

Abbas on the other hand risks losing legitimacy with his people for failing to deliver an agreement. After numerous attempts and decades of talks, the Palestinian population desperately wants to see an end to the Israeli occupation. With no deal, the Palestinian Authority would face a crisis and according to one extreme scenario, could even collapse. 

Kerry has worked meticulously and he's managed to keep the talks largely secure from leaks. Alongside this radio silence Netanyahu and Abbas have been floating ideas and demands to test domestic audiences. Last week Abbas proposed a security plan for the West Bank, in which Israeli forces would withdraw within five years, to be replaced by a US-led NATO force. On Netanyahu's part, he's rejected the 'right of return' for Palestinian refugees and their desire for a capital in East Jerusalem. Yet at the same time he floated a contentious proposal for some Israeli settlers to remain in the West Bank under Palestinian rule. 

This led to heated showdown between Netanyahu and his ultra-right Economic Minister and coalition partner Naftali Bennett, who condemned the idea saying Netanyahu was experiencing 'ethical insanity.' In turn, Netanyahu threatened to sack him unless he apologised. The move was interpreted by some as the PM moving away from the strident pro-settler movement whom Bennett represents within his coalition.

Bennett and his Jewish Home party are widely viewed as the spoiler force in these talks and they do not support a two-state solution. Their alternative is Israeli annexation of most or all of the West Bank and partial or full naturalisation of the Palestinian population. 

However, signs that Netanyahu might sacrifice Bennett and make a politically pragmatic move toward the centre were soon quashed. The following week Netanyahu told his party that he laughs at such suggestions. 'I have no intention of engineering a big bang', he told them. 'I don't intend to forgo my tribe'. 

If Netanyahu is true to his word, it's almost impossible to see how talks will succeed. But failure will usher in more boycotts and an increasingly isolated Israel. The Prime Minister knows a centrist government is more acceptable to the world and a two-state solution is ultimately more stable. How he balances his political heart with his pragmatic head will soon reveal if Bibi really is a believer in the two-state solution.

Photo courtesy of the White House.