For many months, observers of the American mediated Israeli-Palestinian peace talks have wondered whether the Obama Administration would try to link the Palestinian issue to the Iranian one. By “linking” the issues, it was meant that the Obama Administration would offer some sort of a trade to Israel whereby the US would promise to take tough action to prevent Iran from acquiring nuclear weapons in exchange for serious Israeli concessions towards the Palestinians.

Now that the Geneva Six has reached an interim accord with Iran, the idea that the US will try to link the Iranian and Palestinian portfolios is essentially moot. The US administration has decidedly shown that it will address the Iranian question based on its own political and security calculations, independent of the way Prime Minister Netanyahu or the rest of the Israeli government feels about it. It’s almost inconceivable that the Administration would turn around now to try to bargain with Israel over Iran.

Still, the idea of linkage is not necessarily totally dead. It could possibly be reincarnated with Saudi Arabia as the broker.

At no other point in memory have Israeli interests been so closely aligned with those of Saudi Arabia and the other Sunni states in the Gulf. Israeli and Sunni leaders have long understood the powerful potential of building an alliance. As I’ve written before, one of the key motivators for Rabin’s fervent push for peace with the Palestinians was to facilitate an alliance with the moderate Arab states so as to help insulate the group from Iran’s nefarious influence. The Arab Peace Initiative (aka the “Saudi Peace Plan”), which was first proposed in 2002 and offered Israel full normalization of relations with the 57 members of the Organization of Islamic Cooperation in exchange for a withdrawal to the 1967 lines, suggested that the Arab states perceived the benefits of building an alliance too.

Rightly or wrongly, there now seems to be a new sense of urgency to make this imagined alliance real.

“We’re really concerned – Israel, Saudi Arabia and the Mideast countries” about the Obama Administrations’ stance towards Iran, a Saudi royal recently told Jeff Goldberg. As Goldberg notes, this is a fairly remarkable admission of Saudi and Israeli interest convergence for a Saudi royal to make. Israel and Saudi Arabia are both panicked about Iran and feel betrayed by the United States. Logic dictates that they should want to work cooperatively to address their shared concern. But so long as the Palestinian conflict festers, they can’t.

As it stands today, the API is unlikely to offer a way around this roadblock. The API is currently structured as a “take it or leave it” deal – the Israelis permit the establishment of a fully functioning independent Palestinian state, and, in exchange, the Arab states normalize relations with Israel. Yet as we heard time and again on a recent Israel Policy Forum trip to the region, this sort of comprehensive end of claims agreement is, unfortunately, out of the question right now. The most we could hope for with this Israeli Prime Minister, we were repeatedly told, is a new “framework” agreement that would make significant progress towards two-states, but would not permanently resolve all claims.

The way to get around this constraint is to slightly tweak the method of implementing the API. The Arab League showed notable magnanimity and flexibility last spring in amending the API to tolerate “minor land swaps.” Now, with appropriate Israeli encouragement, they could perhaps be persuaded to show a drop more flexibility by permitting the deal to be implemented incrementally, in stages. Under the incremental approach, Israel would first have to take steps towards creating an independent Palestinian state and, in exchange, the Arab states would take steps towards normalization of relations in return. The parallels to the phased approach the Geneva Six has taken in its dealings with Iran are hard to miss.

There are signs that the Palestinians may be willing to go along with an incremental approach too. Writing in the New York Times on Monday, Jodi Rudoren quoted Chief Palestinian negotiator Saeb Erekat as touting the Geneva accord as a “unique precedent” and “new prototype.” “We call upon the international community to make use of the same efforts to end decades of occupation and exile for the people of Palestine,” Erekat said. Erekat is a shrewd and seasoned negotiator; if he decided to give an unqualified embrace of the Geneva accord, he is signaling that the conventional wisdom that the Palestinians will accept nothing less than a comprehensive new deal may be wrong.

As for Netanyahu, if he is as concerned about the new Iranian deal as he has indicated, which he seems to be, he should quickly explore ways of exploiting these opportunities. Publically welcoming the API and the productive role Saudi Arabia has played in the peace process would be one good place to start. Making voluntary gestures to the Palestinians such as freezing construction beyond the blocs or handing over parts of Area C would be another.

The API has been on the table for more than a decade, but so far, none of the parties have felt enough urgency to put it into a digestible and practical format. What happened last weekend in Geneva may just have changed all that. The Israeli government should take note. Let’s hope they do.