I spent the past summer living and working in a UNWRA Palestinian refugee camp in Bethlehem. The last conversation I had before leaving the West Bank to spend time in Israel was with a very nice taxi driver named Fadi. We were discussing the prospects for Palestinian statehood. He told me not to worry…that Abu Mazen wouldn’t be foolish enough to shove a forlorn hope down the throat of the General Assembly. Otherwise, he was optimistic about his future, equally disgusted with Fatah and Hamas but altogether ready for a generational change.

Likewise, the time I spent in Israel was instructive. It was apparent that many Israelis had internalized the fact that demolishing the Palestinian economy and government does not make Israel safer; it makes it less safe. With that said, the PA’s government and economy  — which grew at a blistering 9 per cent clip last year — are heavily leveraged on donor aid from the US and EU. A statehood declaration will cut off the flow. Donors, such as the United States, will drop out, and Israel, which already controls the PA’s purse-strings, will block financial support.

Now, the PA is set to make its statehood pitch first to the UN Security Council, where the US will veto it. The PA will probably then take the proposal to the General Assembly, where a two-thirds majority in favor of recognition is tremendously likely. This will ensure a second US veto.

In the process, Israel will be further isolated at the international stage. Palestine will not receive statehood, and its unpopular government will be unable to control popular outcry. The United States will surrender a broad measure of the waning influence it still has in a region where we are no longer feared or respected.

In other words, Palestine’s statehood bid is a bad deal for everyone.

However, when President Abbas discussed his push for full Palestinian statehood at the U.N., he has remained suspiciously open to meeting with Prime Minister Netanyahu. The Palestinian foreign minister elsewhere noted that the Palestinians would be willing to resume negotiations if Israel accepts “certain terms.” His statement came in response to Netanyahu’s call for a meeting in New York this week with Mahmoud Abbas, the Palestinian president, to reestablish “direct negotiations.”

As Aaron Goldstein remarked this morning, one must question whether Abbas is bluffing. We better hope so, for everyone’s sake.

I’m just praying my cabbie was right about this whole mess.