Angry Jewish settlers and their supporters demonstrated overnight outside the home of Israeli prime minister Benjamin Netanyahu, objecting to the recently announced moratorium on new settlement construction in the West Bank. As the BBC reports, the crowd, estimated at about 8000, was “less than the tens of thousands which their leadership had predicted — but still enough to fill the streets outside the prime minister’s official residence”.

Netanyahu is probably used to hostile demonstrations by now, but even if he weren’t he would be unlikely to be upset about this one. Settler anger plays into his hands, strengthening his resolve to avoid further concessions and contributing to the illusion that he is a moderate statesman steering a course between the extremists on both sides, rather than a card-carrying extremist himself.

The protest, however, serves as a reminder of just how intractable the problem of the settlements has become. Netanyahu’s freeze is well short of what Barack Obama had demanded, and indeed well short of what Israel had previously committed to under the “road map”. Yet even that is enough to unleash settler anger.

How on earth, one might wonder, will Netanyahu — or any other Israeli leader — ever be able to actually evacuate substantial settlements? Yet without that, the prospect of reaching agreement with the Palestinians on a two-state solution is approximately zero.

That’s not to say that the settlers enjoy strong public support in Israel; on the contrary, many Israelis regard them as self-righteous troublemakers. But a significant minority, when it’s as determined and well-organised as this one is, can still play havoc with public policy.

The settlers and their ideology of “greater Israel” have formed the backbone of Likud for decades. Ariel Sharon, who contributed to that as much as anyone, found he could no longer remain within Likud once he started to question them. Now Netanyahu, willingly or not, is their prisoner.

Witness the official Israeli outrage last week against a draft EU report that threatened to recognise the necessity for East Jerusalem to become the capital of a Palestinian state. The EU toned down the draft slightly before releasing it  on Monday, after which Israel dismissed it as “containing nothing new” and “not contribut(ing) to the renewal of negotiations”

Israeli policy seems to be stuck in a sphere of unreality where a two-state solution is officially proclaimed as the goal, but there is a taboo on any discussion of measures — dismantling settlements, partition of Jerusalem, negotiations with Hamas — that are self-evidently necessary for reaching that goal.

Presumably, Netanyahu’s objective is to keep playing out the charade, and to hold off American exasperation and international intervention until his retirement, or at least until the next election. But there is surely a limit as to how long this tactic can work. Meanwhile, the demographic “facts on the ground” render the whole idea of a two-state solution less and less plausible.

But if the two-state solution recedes (further) into the background, no one knows what might follow. While it’s easy to devise two-state schemes on paper that have some plausibility, getting a one-state solution onto the table even in theory seems a mammoth task.