The flurry around John Kerry’s comments in Munich on the consequences for Israel of failure in the current round of negotiations with the Palestinians totally misses the point. At issue is not whether the U.S. Secretary of State threatened Israel when he said that “there are talks of boycotts and other kinds of things” or whether he voiced concern for Israel’s future should the discussions break down (in all probability, the latter), but what is happening to Israel’s standing in the global arena.

For years, the country has averted paying a serious price for its ongoing control (and settlement) of Palestinians territories. That is no longer the case. As the second decade of the 21st century progresses, Israel is becoming increasingly isolated from the western support base which safeguarded it in the past. The cost of maintaining the status quo is skyrocketing. This trend should provide the impetus for Israel’s current leadership to do what it (and its predecessors) has avoided for far too long: initiate a historic compromise with the Palestinian people.

The first signs of impatience against ongoing Israeli policy took place in the academic and cultural fields. Pressures for an academic boycott of Israeli centers of higher education, which originated a few years ago, gathered momentum in recent months with the decision of the American Studies Association to rebuff Israeli institutions and the major debate in the much larger and more influential Modern Language Association to follow suit. Subtle forms of discrimination against Israeli scholars are apparent in their treatment by major academic journals, in the dispersal of fellowships and post-docs and in attendance at conferences held in Israel. Culturally, too, the number of stars who now regularly bypass Israel is notable. One Scarlett Johansson cannot erase Roger Waters and many others who have expressed their displeasure with Israeli policies by simply staying away.

Much more palpable is the stepped-up pace of economic measures against settlement products and Israeli firms operating in the West Bank. Unlike the global BDS movement, which calls for a complete boycott of Israel in its entirety, recent actions taken by major European firms and governments pointedly target the occupation. The directives of the European Union in this regard are indicative of a much broader trend. Ask anyone doing business with Europe, talk discreetly with leading financial analysts, and consult with the major bankers: they are all seriously disturbed with what they see and what they are experiencing.

It is beyond facile to suggest that alternate markets can make up for the slack now apparent in the West. China and India may offer opportunities for more Israeli trade; they hardly compensate for the damage wrought by current patterns in the industrialized world. When over a hundred of the top industrialists and financiers in the country call upon the government to cement a deal with the Palestinians, as they did just a few weeks ago under the umbrella of the “Breaking the Impasse” initiative, then decision-makers should take note. The people responsible for Israel’s prosperity and growth are saying that the economic crunch is on.

The diplomatic outlook is not much better. Reams have been written on the rising tension between the Obama and Netanyahu administrations. It is useful, in this context, to simply reiterate the well-known fact that Israel has disagreed with virtually every American move in the region during the past year, from the decision to negotiate the destruction of chemical weapons in Syria and the aid freeze to Egypt after the Sisi takeover, to the signing of the interim agreement with the Rohani government and the partial lifting of sanctions in return for an Iranian slow down in its nuclear program. The verbal sparring that has accompanied each one of these events has contributed little to improving the atmosphere.

The United States, as has been repeatedly highlighted by key members of past and present Israeli governments, is Israel’s single most important strategic asset. Constantly locking swords with Washington does little to cement this relationship. To the contrary: should the pattern of vocal confrontation and substantive disputation proceed apace, the strategic connection in its entirety might begin to unravel, especially given the amount of energy and attention invested by Washington in seeking a just and lasting resolution to the Israeli-Palestinian conflict and its centrality for achieving a modicum of stability in the region.

The strains in U.S.-Israel ties are symptomatic of a much broader unease with Israeli policy in the democratic world. With few exceptions, Israeli positions on realizing the two state option are seen to be at odds with those of leading governments in the West; now, however, their leaders are articulating their displeasure more openly. This may be a result of shifts in the global arena and a growing concern with rapidly expanding jihadist threats. It may also be an outgrowth of rising impatience. In either case, the ethical rejection of occupation and all that it entails is central to the position of even Israel’s closest allies.

Indeed, no democratic country today can understand Israel’s continued rule over another people against their will. The period during which Israel could pursue the settlement enterprise with impunity while denying the basic right to self-determination of the Palestinians is coming to an end. Attacks on the Palestinian leadership, on their credibility, on their inability to curb incitement and on the substance of their proposals cannot obviate this fact. Nor do charges of anti-Israel behavior verging on the anti-Semitic dispel the moral unease of free societies when confronted with Israel’s ongoing overrule in territories acquired in 1967.

Israel’s position in the international arena is rapidly eroding. It is one thing to blame certain foreign leaders for this situation or to decry their intentions as a way of dismissing the shifting currents and ignoring their ramifications. It is quite another to internalize that the country’s isolation is not merely a threat—it is becoming a reality that can imperil Israel’s being. Israel does not have the luxury of ignoring this message as it is painfully apparent that time is not on its side. No amount of bravado involving the repetition of worn slogans such as “the whole world is against us” and “we can only rely on ourselves” can today cover over what may sadly prove to be a self-fulfilling prophecy.

The creation of a Palestinian state alongside Israel is now, more than ever before, an existential imperative for Israel. The cost of keeping the status quo in place is becoming too high; the two-state option must be put in its stead. Israel has it in its power to do what it has avoided for too long—to take the initiative in agreeing on the terms of ending the conflict with the Palestinians. If it fails to do so, it will fail itself.