Does John McCain owe John Kerry an apology? Or does Jonathan Pollard owe McCain a thank-you card? Two days after McCain scolded Kerry over his refusal to “recognize reality” and give up on the Israeli-Palestinian peace process, al-Arabiya reports that the US has kickstarted the effort back to life — by trading Pollard to Israel in exchange for a new Palestinian prisoner release and a moratorium on settlement expansion:

Palestinians and Israelis have reached a deal to extend peace talks beyond an April 30 deadline, Al Arabiya News Channel reported on Thursday.

The deal will see an unspecified number of Palestinian prisoners released from Israel jails and a freeze on settlement construction in the West Bank.

In exchange, the Palestinians will suspend their plans to join 15 international bodies and treaties and the United States will release jailed Israeli spy Jonathan Pollard, according to sources.

The Pollard trade has come up so often in Kerry’s negotiations that it was almost inevitable that it would hit the table eventually. By producing it now, Kerry keeps the Palestinians from progressing on their quest for de facto recognition and the Israelis for building more housing units. For now. In fact, all Kerry appears to have bought is just a deadline extension past the end of this month, and one last serious attempt at talks before that deadline approaches at all.

The intelligence community won’t be pleased, if this turns out to be true, but Pollard has probably outlived his usefulness in prison. If the US can get something substantive for his release, then after twenty-seven years, it would be a good call. This probably just buys Kerry a little face-saving time rather than anything substantive, though. If talks collapse later, the US will have traded its hole card for nothing. And nothing in the current talks suggest that we’re moving toward any resolution of the conflict between the Israelis and Palestinians, because the Palestinians still want the right to live in Israel while the Israelis want Israel to remain a Jewish state.

Yahoo’s Olivier Knox reports that Kerry might demand that apology from his old friend after feeling “betrayed and surprised” over the criticism:

Secretary of State John Kerry felt “betrayed and surprised” by Republican Sen. John McCain’s withering and highly personal criticisms at a congressional hearing, a senior administration official told Yahoo News on Wednesday.

Kerry “felt betrayed and surprised to see McCain so angrily rooting for failure against one of the most internationalist members of the administration,” said the official, who is close to the secretary and requested anonymity to speak candidly about the top diplomat’s reaction.

The key word there might be “internationalist.” Republicans long openly contemptuous of President Barack Obama’s cautious handling of world affairs — “leading from behind,” as one anonymous administration aide once described it — had hoped that Kerry would nudge the administration to take a more aggressive approach to problems such as the civil war in Syria.

I wouldn’t demand an apology just yet. Let’s see if Pollard’s release actually does anything except get Pollard out of prison, assuming that this deal survives long enough to be implemented at all.

Update: Ynet News has a little more:

On Thursday, in a new meeting between Palestinian and Israeli negotiators, attended by US special envoy Martin Indyk took place, a Palestinian source told Ma’an the parties were set to discuss the possibility of Israel releasing the fourth and final group of prisoners in a bid save relieve tensions between the two sides the hopes of resuming talks.

According to the source Ma’an spoke with, the Palestinian negotiators will then continue to separate the release of prisoners and the extension of peace talks beyond the agreed deadline of April 29.

A PA official further claimed that a release would be secured, and would talk place by the end of the month. …

Under interim peace deals, Israel collects and transfers to the PA some $100 million a month in taxes on goods imported into the Palestinian territories. Israel has previously frozen the payments during times of heightened tensions.

Though Israel did not mention such measures on Wednesday, Palestinian Foreign Minister Riyad al-Malki said the Israeli government had “indicated” this morning it would withhold the revenues. He did not say how that message had been delivered.

I’m not sure how much optimism there is to salvage here.

Update: Jeff Dunetz’ sources in Israel says no deal has been reached yet, but a swap is under discussion:

Israeli sources tell me that while a deal is being discussed, there is no deal yet. Indeed a report in Arutz Sheva confirms what my sources said:

One US official speaking to AFP on condition of anonymity stated Thursday that the “reports are incorrect.” After initially reporting that a deal could be near, Channel 2 quoted Israeli sources close to the talks as saying “the reports on the deal are premature,” adding that the US State Department said “gaps between Israel and the Palestinians have narrowed, but there is still no deal.”There are also differing reports of what is in the deal, but generally, I have been told the items being discussed are close to the Al Arabiya, report; the remaining Palestinian prisoners that were promised will be released plus others, at least some of the applications to join international bodies will be suspended, a partial or full settlement freeze in Judea and Samaria (but not Jerusalem), the talks continue at least till end of the year, and Pollard gets out.