Even before Israel announced it was not going to continue the 10-month settlement construction freeze it imposed in September 2009, the Palestinians were threatening to withdraw from newly started peace talks, insisting that settlements are an obstacle to peace. The Obama administration has also repeated this canard and George Mitchell is now pressuring Israel to extend the moratorium. In fact, contrary to this conventional wisdom, the settlements are actually a stimulus to peace.

Consider this inconvenient truth: In 1977, Israel first offered the Palestinians an opportunity to govern themselves in what would inevitably have resulted in the establishment of a Palestinian state, but the Palestinians rejected the autonomy plan out of hand.

It would take another 16 years before the Palestinians agreed to even recognize the State of Israel. At that point, Israel again offered them self-government and, this time, the Palestinians were prepared to negotiate. What had changed?

In 1977, fewer than 6,000 Jews lived in the territories. It would have been relatively easy to evacuate most or all of them and the Palestinians would have lost little of the territory they claimed in the West Bank and Gaza Strip

By 1993, however, the number of settlers had grown to more than 120,000. Communities were scattered all over the disputed territories and larger communities were going to be difficult if not impossible to uproot. “The Palestinians now realize," Bethlehem Mayor Elias Freij said in 1991, "that time is now on the side of Israel, which can build settlements and create facts, and that the only way out of this dilemma is face-to-face negotiations."

Still, the Palestinians were unwilling to abandon their armed struggle even after Israel withdrew from 80 percent of the Gaza Strip and about half of the West Bank, with promises to trade more land for peace. The escalation of Palestinian terror against Israelis finally killed the Oslo process in the late 1990s. By that time, the number of settlers had grown again to nearly 200,000.

After Yasser Arafat rejected Israel’s offer at Camp David in 2000 to withdraw from 97 percent of the West Bank, all of Gaza, dismantle most settlements and establish a Palestinian state with East Jerusalem as its capital, most Israelis did not believe there was anything they could do to satisfy Palestinian demands. As Freij had predicted a decade earlier, Israel created facts that changed the parameters for negotiations. “In light of new realities on the ground, including already existing major Israeli populations centers,” George W. Bush said in 2004, “it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949.”

The harsh reality for the Palestinians is that the longer they wait, the more territory they are likely to lose and it therefore behooves them to negotiate. After the settlement population grew to about 270,000, Palestinian President Mahmoud Abbas decided to negotiate with Israeli Prime Minister Ehud Olmert, who offered him a deal similar to the one Arafat had turned down. Abbas was similarly short-sighted and rejected the opportunity given to him to win independence for his people.

Some Palestinians remain convinced that time is on their side. Some believe the demographic trend is in their favor and they can overcome Israel by the sheer weight of their numbers. Others believe the Iranians or Arab states will build nuclear weapons that will allow them to finally have the military capability to destroy Israel. 

The one factor, however, that prevents the Palestinians from sitting back and waiting for the demographic and atomic bombs to go off is the growth of settlements, which forces them to question whether there will be any territory left for a state if they wait too long.

You might think the Palestinians would be more anxious to reach a peace agreement; however, they may not feel sufficient urgency to coexist beside Israel because the actual area the settlements cover is very small -- roughly two percent of the West Bank. 

But if Abbas walks out of the talks with Israel, the Palestinians will again have no one to blame but themselves when they look at a map and see Israeli communities sprouting throughout the land and existing settlements expanding.

Mitchell Bard is a foreign policy analyst whose latest book is "The Arab Lobby: The Invisible Alliance That Undermines America's Interests in the Middle East (HarperCollins Publishers)."

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Mitchell Bard is the author of "The Arab Lobby: The Invisible Alliance That Undermines America's Interests in the Middle East" (HarperCollins 2010) and "Israel Matters" (Behrman House 2012).