The world is too embarrassed to admit it, but the idea of creating two states within the Palestine mandate — created 90 years ago last month when what is now Jordan was removed from the territory to be encompassed by the Balfour Declaration — is dead.

It finally expired in May 2011 when President Obama declared a future Palestinian state should be based on the borders that existed before the June 1967 war. This had been the key assumption supporting the two-state plan openly backed by Washington since 2003 and implicitly by US governments for at least three decades. But it was crudely rejected by Israel’s Prime Minister Benjamin Netanyahu the next day to mindless shouts of approval from US legislators.

It had been a lingering death. The first proposal to split the mandate was contained in the UK government’s 1937 report following the start of the Palestinian rising against British rule. It was accepted by Jewish settlers, rejected by Arabs and shelved.

Partition was proposed by the UN in 1947, but the first Arab-Israel war ended hopes for a negotiated agreement for a generation. Arab states refused to accept the war’s outcome and demanded undivided Palestine should be ruled by the majority: the Arabs whose land it rightly was.

Wars in 1967 and 1973 encouraged a fresh approach; the UN majority has consistently since then supported the creation of an independent Palestinian state on the West Bank. In November 1988, the Palestine Liberation Organisation (PLO) voted for a Palestinian declaration of independence. It was a painful admission that partition was the sole option.

The high tide for an independent Palestinian state came at the Arab-Israel peace conference in Madrid in October 1991. Fulfilling promises made to win Arab support for the war to expel Iraq from Kuwait, US President Bush threw his support behind an initiative that, it was hoped, would clear the way for a Palestinian state at last.

It’s been downhill ever since. Bill Clinton won in 1992 promising to stop pressing Israel for concessions. He focused on bilateral deals and undermined Madrid’s multilateral principles. The 1993 Oslo accords produced agreements between Israel and the PLO and Jordan. But the assassination of Israel’s Prime minister Yitzhak Rabin in October 1995 removed the only leader capable of winning Israeli support for a deal the Palestinians might consider. Netanyahu, rejecting a Palestinian state, was elected prime minister in May 1996. The hardliners have made most of the running in Israel ever since.

Sunni Muslim radicalism is the issue of the moment, not Palestinian rights

Negotiations finally collapsed with the second Palestinian intifada (uprising), which started in September 2000 and lasted almost five years. By then, a new Middle East had emerged. The US occupation of Iraq shattered US credibility in the Arab world, fuelled Sunni-Shiite sectarianism and left Israel as America’s only uncritical ally. When Israel unilaterally pulled out of Gaza, Hamas and Palestinian militants took power. Already ideologically divided, the Palestinian national movement has since been geographically split as well.

Israel’s attack on Gaza in the winter of 2008-09 made heroes of Hamas hardliners. For Palestinian Sunni Muslim populists, richer pickings were meanwhile emerging in Egypt and other Arab states.  Israeli elections in 2009 produced a right-wing coalition with Netanyahu as prime minister. He allowed fresh settlements in the West Bank and killed President Obama’s peace initiative that year at birth.

The Palestinians’ ultimate pressure point on US policy was the argument that the two-state solution was the sole alternative to more regional war. But Israel’s military superiority deters anything other than pinprick guerrilla attacks that incur massive retaliation. The Arab world has moved on as well. In January 2011, risings started that brought down three Arab leaders and led to war in Syria. Israeli inhumanity in occupied Palestine paled in comparison with the slaughter of Arab civilians in Libya and Syria. Fearing contamination and in despair about Palestinian divisions, Saudi Arabia and other GCC states have been forced to change priorities. Sunni Muslim radicalism is the issue of the moment, not Palestinian rights.

Whoever takes the White House next month therefore can gain little from promising Middle East peace. Should Mitt Romney win, it’s possible he will recognise Jerusalem as Israel’s capital, something no Palestinian leader can accept. If it’s Obama, he’ll again face Netanyahu, expected to win Israel’s January parliamentary poll. West Bank settlements and settlers will increase whatever Washington says.

Reading the writing on the wall, Palestinians leaders are conceding sovereignty in the West Bank is no longer feasible. But the alternative, Palestinian equality in a bi-national Israeli state in the whole of the Palestine mandate, isn’t credible.

The end of the dream of independent Palestine is the death of a cause that won the support of fair-minded people familiar with the Palestinian tragedy. But the memory of the men and women who suffered in its service will endure. The price that will haunt the world forever is lasting bitterness in the Arab and Islamic world.