You may have been wondering exactly what Kadima leader Tzipi Livni has been doing for the past 12 months, having apparently spent much of the time on the sidelines of Israeli politics.

The answer, it seems, was sharpening up her vision of what direction Israel should be taking - as her speech to the annual Herzliya conference on Monday demonstrated.

Livni was a far more assured figure than the somewhat diffident woman of last year. Now she appears to have the bit between her teeth. Her speech was a passionate exposition, not just of the political urgency of reaching a settlement with the PA, but, strikingly, of the moral necessity of a deal.

She spoke of how it was central to her conception of Judaism, in much the same way as she referenced it in her remarks to me this week about the obligation of diaspora leaders to speak out when they felt Israel was taking a wrong path.

Livni was the clear star of this year's conference. But she had little competition. For years, Herzliya in February has been a must for anyone with an interest in Israel's security. But this year neither the Prime Minister, the Foreign Minister or the Defence Minister graced the gathering.

There is a definite Kadima feel to Herzliya these days, so it is important not to extrapolate too much from a gathering whose overall mood was concern at the lack of any form of peace process. But it is certainly true that, for much of the elite of Israel's security policymakers, time is running out on a two-state solution.

Livni's focus on closing a deal is even confirmed by Ahmed Qurei (Abu Ala), a Fatah leader and a former prime minister of the PA. He was lead negotiator in the last serious talks with Israel - the 2008 process, which was the subject of the leaked Palestine Papers. "From experience, I think it's clear she wants to reach an agreement," Abu Ala said of the potential Israeli prime minister.

You do not survive at the top of Palestinian politics for two decades without being an operator. I met Abu Ala in his office in Abu Dis, near Ramallah. Strikingly, his desk is in front of a large picture of Jerusalem. And that, he knows, is how any possible agreement with Israel will be judged. As he asks: "Which Palestinian wants an agreement without Jerusalem?"

He agrees that "we achieved some progress with Mr Olmert". But he dismisses the idea that a deal was almost done, only to be wrecked by the election of Benjamin Netanyahu: "We were unable to close even one file out of the 14 files necessary for a permanent status agreement."

His direct talks were conducted with Livni when she was Foreign Minister. She was, he says, "a tough negotiator".

But he also says something unusual for a Palestinian leader; he does not attach all blame to the Israelis: "We all should be blamed, because it is possible to reach an agreement."

Balanced words - but the Palestinians may now be able to afford to play a long game. Wait, and wait, and wait, and wait some more; and then they will have a one-state solution - and the Jewish state will be no more.