The following is the transcript of my Press TV (Iranian English-laguage station) interview about the new Israeli announcement of 900 new settlement housing units in the area called Har Homa. The transcript was re-edited by me for greater accuracy. The original video and a not fully-accurate transcript can be seen here.

Press TV: Could it be that these housing crisis protests turn into a bad thing for Palestinians, and any prospects of peace? 

Ibish: I don't think the protests themselves have any particular ramifications on the peace process, it is an internal Israeli matter but it is being used as an excuse by [Israeli] Interior Minister Eli Yishai for the 900 housing units in Jebel Abu Ghneim, the settlement which the Israelis call Har Homa. You have to understand that it is not exactly in Jerusalem as such. It is in the extreme south-west corner of what Israel redefined in 1967 as municipal Jerusalem. I mean, Jerusalem under the Ottomans, the British and the Jordanians was really the city but Israel made the first of its major land grab by extending the boundaries of municipal Jerusalem deep into the West Bank what. 

What we are talking about here is a Jewish settlement that is right on the border of Bethlehem, deep into the West Bank and what is significant about this new housing project is that it will create a new ridge in this Har Homa settlement which, which, if it is finished, will cut the Bethlehem off from East Jerusalem which will make it much more difficult to ever have a Palestinian state with its capital in East Jerusalem alongside an Israeli state, which is the only peace agreement. 

So it's a very dramatic, significant thing and I expect it will meet with significant international opposition. The US has been deeply opposed to this and the whole international community has been deeply opposed to it so this is an announcement that is made in the context of the housing crisis, with the Israeli right saying, well, we just have to make more settlements as if the cost of living bubble, the housing market bubble were connected to some kind of housing shortage and as if the only land available to build houses in Israel was Palestinian occupied land; it is all ridiculous but it is the argument that is being made by people who are determined to entrench the occupation and never allow the Palestinian their freedom. 

Press TV: Israel's largely claimed that settlements are approved years in advance. Is it possible that trust it at this juncture, especially, as mentioned, in Netanyahu's reputation, due to these protests isn't doing well? 

Ibish: I think that is right, he is in bad shape and I don't think this is particularly going to help him out, the protesters in the tent city and the middle class, who have their cost of living rising, are not going to be impressed that the settlement movement is using their housing price and cost of living protest to advance the settlement project. 

In fact I think there are a lot of people in Israel who are wondering about the financial cost of occupation, this is not a cheap thing, taking people's lands away, taking these settlers there, giving them generous subsides, because many Israelis have moved to settlement in and around Jerusalem because they have to been subsidized to do so, becuase it is a good deal for them and the settlers get all kinds of benefits that ordinary Israelis, like the ones who are protesting, do not 

I don't think this is going to help [Israeli Prime Minister Benjamin] Netanyahu domestically and I think he is in a lot of trouble over this; increasingly the settlement activity is not going to get him out of it. 

What it will probably get him into is another argument with the US. It is true the veto the US has cast at the end of the last year at Security Council on the settlement resolution kind of killed the issue and I think it was a miscalculation on the Palestinian part to push forward knowing the US was going to veto a resolution that used the word “illegal” even though the US agrees it is illegal. They would have been willing to have said “illegitimate.” 

The Palestinians pushed the issue for many different reasons, both because it is true and for the domestic political reasons, but they paid a heavy price because from then until now the settlements have been gone forward without any comments. I think this may be different, I think really you might see some pushback from the US, from the Europeans, etc, on this because if it is completed, it would really cut Bethlehem and other parts of the West Bank off from East Jerusalem and make the eventual border much more difficult to draw. 

You are right about these announcements, the Israelis announced them and they always say these decisions were made previously and then they are going to be completed sometime in advance and this project has been one that has been discussed since 2000 and it has not been completed because it is so sensitive. 

I think there is a very good chance, especially if there is an appropriate amount of international pressure, that there will be another of these announcements that doesn't eventually get completed. This is an extremely crucial area, this is not another annex to another settlement like Maale Admumim that probably will be part of a land swap. It's a dagger aimed at the heart of a peace agreement.

Press TV: With the building of settlements pretty much the status quo at this point, where does this leave a two-state solution, the Palestinian-statehood-bid at the UN, etc.? 

Ibish: It is in grave jeopardy, it really is, and nothing could threaten it more than a settlement project like Har Homa. There are plenty of settlement blocks which if the Israelis build more buildings in them wouldn't really change the strategic equation, it will still be a violation of international law and it would be bad and increase the number of people who don't want to make a deal. But this is very strategic, this totally changes the strategic landscape so this really undermines the very the prospect of a two-state solution, which is really the only solution that would actually work. 

The Palestinian statehood initiative at the UN, if it happens and depending on the form it happens, is not really going to be connected to this except in so far as it is an expression of how stuck diplomacy is and how desperate the Palestinian people are, people who are living under occupation and who cannot afford to wait and let these things sort themselves out and come back to this in a year or half or two years time, they don't have that luxury. 

I really don't think a confrontation at the UN is a great idea from anyone's point of view and I think there needs to be very urgent work here to figure out a compromise that can avert any kind of explosion on the ground or a major diplomatic fight that would harm everybody and particularly the weakest party always ends up losing the most and in this case it unfortunately is, again the Palestinian people again.