Have you been following the twists and turns of the crisis-laden fallout that has followed the revelation that Barack Obama and Nicolas Sarkozy recently regaled each other with disparaging remarks about Bibi Netanyahu? Do you think Netanyahu was right to demand a public apology, failing which he would withdraw Israel's ambassadors from France and the USA?

You haven't? You know nothing of any demand? Well, don't worry. There is no crisis, and no apology has ever been demanded - nor ever will. Indeed the significance of the now-famous gaffe is that it has resulted in precisely nothing. Netanyahu, Obama and Sarkozy are still very much on speaking terms. Any hopes that the Arab world might have nurtured that the revelation would drive a wedge between the USA, France and Israel have turned out to be baseless. Between Paris, Jerusalem and Washington it's business as usual, which tells us much about the present state of peacemaking in the Middle East.

You will recall that during the G20 summit in Cannes at the beginning of this month, on headsets that were about to be used for the translation of a news conference, journalists were startled to hear Sarkozy tell Obama that he could not 'stand' Netanyahu, whom he then called 'a liar,' and that in reply Obama intimated that although Sarkozy might well be 'sick' of him – Netanyahu – he (Obama) had to 'deal' with him 'every day.'

These candid remarks were heard loud and clear by French-speaking journalists present at the news conference on November 1. But not one of them reported them. The story - which by rights ought to have been front-page news the following day - was only made public on November 9, when it appeared on the French news website Arrêt Sur Images. The French media have a habit of being much more respectful of privacy than the British, and a Paris contact suggested to me that the very powerful private office of the French president simply and effortlessly "sat" on those journalists who overheard the embarrassing dialogue. If so, that in itself is noteworthy.

What's much more noteworthy is that no heads have rolled. I don't say that there will be no repercussions. There will. Obama has made a comprehensive mess of his relationship with Netanyahu and, once the gaffe story had broken, Republicans lost not a moment in bringing it to the attention of the US electorate. This is the electorate that in less than 12 months will have to decide whether to give Obama a second four-year term. If Obama really does want that second term he will clearly have to offer Netanyahu something by way of contrition; a promise, perhaps, to cease referring in negative terms to Jewish towns and villages in Judea and Samaria.

What is newsworthy is that no heads have rolled

I don't know what Netanyahu's precise reaction was when news of the gaffe reached him. He was fully entitled to indulge himself in a jolly good laugh. Publicly he has decided to react in the lowest of keys. Relations with France and the USA are too important to be influenced by loose talk. What Sarkozy and Obama think of him at a personal level is of little importance. What is important is that the Palestinian Arab juggernaut, which seemed but a few weeks ago to be moving with unparalleled momentum, has now come to a screeching halt. President Abbas knows that he cannot muster enough votes on the UN Security Council to obtain its endorsement of Palestinian statehood. UNESCO's decision to admit "Palestine" as a member has led precisely nowhere. And any agreement between Fatah and Hamas on the formation of a "unity government" will require Abbas to sacrifice his Prime Minister, Salam Fayyad, one of the very few "moderate" Palestinians who is taken seriously in the west (it is of course his very "moderation" that has caused Hamas to demand his resignation).

Where does this leave the peace process? The fact is, there isn't one. Netanyahu will not give way on settlements. Neither Hamas nor Fatah are prepared to recognise Israel as a Jewish state. My advice to the Quartet, to Blair, Obama, Sarkozy and the rest is to tell the Palestinians that the world has other more pressing matters to attend to (which indeed it has), and that, for the time being, Israeli-Arab peace negotiations must be adjourned sine die.