Yossi Mekelberg: This is an important step on the road to political reality

It is, of course, much less than full recognition. On the other hand, Britain is a far more important player

There are those in Israel who believe that the world is against them. Their reaction to the news that Britain intends to grant diplomatic mission status to the Palestinian delegation in London will be thatit is just further proof of their belief.

But others will perceive it as a result of the impasse to which the Israelis have made a major contribution. They will say: this is because of our own failure to resolve this conflict. And, they will add, if we don't bring it to an end ourselves, then eventually the steps will be dictated to us.

Only on Sunday, Labour Minister Binyamin Ben-Eliezer warned that more recognition for the Palestinians would be the inevitable consequence of continued Israeli intransigence on the peace process. He even said that the US could recognise a Palestinian state within a year. That is not fanciful: in recent weeks Brazil, Argentina, Bolivia and Ecuador have done precisely this. But the British move is different. It is, of course, of a much lesser order than full recognition. On the other hand, Britain is a far more important player. The change chimes in with some unease in Jerusalem after Mr Hague's recent visit, over some of his comments and some of the Palestinian leaders he met. The two countries have had such a close relationship for so long, but there have been a lot of strains on the relationship recently – in particular the scandal over the use of British passports in the assassination of a Hamas operative by an apparent Mossad team. And there is a growing feeling from the likes of Mr Hague that Britain, as a major EU country, should be taking a more proactive role.

Remember: the EU is Israel's major trade partner. That gives it tremendous leverage. And so any change like this from a key EU player will naturally make Jerusalem nervous. At the moment, Israel has a lame-duck Prime Minister whose negotiation of his own continued position takes more of his time and seems more important to him than the peace process, and so naturally things have stalled.

It's possible that this will be part of a process that could help nudge Mr Netanyahu towards being more proactive himself. There are still those in Israel who believe that if the country waits long enough, it will get its way by default – and the relatively successful recent spell internally has only helped that point of view gain traction. Actions such as Mr Hague's are the only way of telling those people: the status quo is not sustainable. And if you're not going to do anything to change it, someone else will.

The author is an Associate Fellow at Chatham House and International Relations Programme Director at Regent's College