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U.S. Secretary of State John Kerry arrives in Amman, Jordan on Wednesday, June 26, 2013. During his stay in Jordan, Kerry plans to have meetings on the Israeli-Palestinian peace process.Jacquelyn Martin/The Associated Press

U.S. Secretary of State John Kerry arrives in Israel Thursday on his fifth, and possibly final, attempt to resuscitate the Israeli-Palestinian peace process that has lain dormant since 2010.

At first glance there is reason for optimism, as both the Israeli and Palestinian leaders appear to have moderated their positions, making negotiations more likely.

However, a new obstacle has arisen in the form of a challenge to the direction Israeli Prime Minister Benjamin Netanyahu is taking his Likud party.

Where the Israeli leader stands

He seems genuinely keen to restart talks and has emphasized in recent days that it is his "fervent hope" that negotiations for a two-state solution can resume. He also said he's prepared to negotiate in a "peace tent" between Jerusalem and the West Bank city of Ramallah for as long as it takes to reach a conclusion. And he has mapped out 21 issues to be discussed, with weekly meetings and a year-long timetable.

Mr. Netanyahu has not raised his sometimes-stated demand that the Palestinians first recognize Israel as the "Jewish state" and has quietly restrained new construction in settlements outside Jerusalem and the four major settlement blocs. The Israeli newspaper Maariv reported that he is also prepared to release a limited number of Palestinian prisoners if the Palestinian leadership agrees to enter negotiations without conditions.

Where the Palestinian leader stands

Palestinian Authority President Mahmoud Abbas has softened his conditions for renewing negotiations with Israel. He no longer insists that Mr. Netanyahu publicly announce a settlement moratorium, but appears willing to accept restraint from Israel.

He still wants negotiations on creating a Palestinian state to be based on the borders that existed between the two sides prior to June 5, 1967, with agreed land swaps. But he is willing to take a U.S. assurance – and not necessarily an Israeli assurance – that will be the case.

The spoiler

Danny Danon, the deputy defence minister in the coalition government, is threatening to blow up any prospects for successful peace talks. Mr. Danon, a leader of the extreme right wing of the Likud, was elected Tuesday as president of the party's upcoming convention. He rejects many of Mr. Netanyahu's policies, a two-state agreement with the Palestinians in particular.

And Mr. Danon is not alone. Mr. Netanyahu's supporters have become so outnumbered that the Prime Minister did not run for convention president to avoid an embarrassing defeat. Mr. Danon now is expected to be elected chairman of Likud's central committee, with like-minded extremists capturing other influential party posts. While the Prime Minister speaks for the government, he may not be able to carry a vote in his own party caucus on the subject of a Palestinian state.

Mr. Kerry's hope

He is hoping to launch face-to-face negotiations between the Israeli and Palestinian leaders as early as next week in the Jordanian capital, Amman. While no quick agreement is foreseen on refugees or the status of Jerusalem, it is conceivable they could agree in principle on the borders between the two states. And though the Hamas leadership, representing a large proportion of Palestinians, would not be part of the process, success on defining borders could give a much-needed impetus to the final status negotiations.

The long shot

With Mr. Danon lurking in the Likud wings, any success at the negotiating table could be dashed on the political altar. In such a case, Mr. Netanyahu has another card to play – one he saw played by his predecessor in Likud, Ariel Sharon.

In 2005, Mr. Sharon faced enormous resistance inside the party to his plan to withdraw all Israelis from the Gaza Strip. Arguing it was in the country's best interest, he went ahead and then resigned from the party, taking some supporters and members of other parties with him. His Kadima party won the subsequent election. Many Israeli observers see things unfolding that way for Mr. Netanyahu. He could take Yisrael Beitenu, a secular party supporting a two-state solution and willing participants from centrist parties and perhaps Labour, create a new bloc, jettison the extremists and then run in an election on a platform of what's best for the country.

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