The tens of thousands of Palestinians who thronged Yasser Arafat’s grave Wednesday to mark the fifth anniversary of his death had a lot more to mourn than just their late leader.

Arafat’s dream of an independent state seems as distant as ever with the Palestinian government in deep crisis and the rival Hamas cementing its hold on Gaza. Arafat’s successor, President Mahmoud Abbas, appears to have hit a dead end, and the Palestinians are at a loss as to how to find a way out of the morass.

Abbas took office with great promise after Arafat’s death five years ago. But he is so fed up with the lack of progress that he has vowed to step down, something that could bring the collapse of the Palestinian government. He says he cannot restart peace talks with Israel until the Jewish state stops building settlements in areas where the Palestinians hope to establish their future state.

“We did what was required of us and carried out our obligations and gave peace a historic precious chance,” Abbas said at a memorial service, surrounded by supporters chanting and waving flags. “But we see Israel taking land and building settlements.”

Abbas said he would stick to his decision to leave politics after January elections, despite pleas from world leaders to remain in office. He said his government had honored its obligations to Israel to crack down on militant groups, and chastised the international community for failing to force the Israelis to honor their past pledges to stop settlement construction.

“This is international justice, the use of double standards,” he said.

One of Arafat’s most important accomplishments — holding his people together amid great hardship — is gone now.

For more than two years, there have been rival governments in the West Bank, run by Abbas’ moderate Fatah faction, and Gaza, ruled by the militant Hamas. Gaza’s rulers are unshaken by a punishing blockade and the suffering it causes their people.

The prevailing sentiment among the Palestinian leadership is that they are running out of options and it appears they have no new strategies for making progress toward statehood. Some aides advocate turning to the United Nations to put pressure on Israel.

Speaking to cheering crowds in the West Bank city of Ramallah on Wednesday, Arafat’s nephew and Fatah leader Nasser Al-Kidwa called for popular protests and boycotts against Israel’s West Bank separation barrier and settlements. He also suggested asking the U.N. Security Council to recognize a Palestinian state.

But that strategy is unlikely to amount to much since the U.S. would almost certainly veto any anti-Israel measure brought before the council.

Privately, Abbas aides question whether he will follow through on his promise not to run in Jan. 24 elections. There is a good chance the vote will be postponed, and if it is, Abbas would likely remain in office.

The Palestinian election commission is expected to make a recommendation in the coming days on whether a vote can be held. Senior officials expect the vote to be called off, though a final decision isn’t expected until December, said Fatah official Nabil Shaath.

Netanyahu has said he wants to resume negotiations with the Palestinians. But with the Israeli leader refusing to halt settlement construction, Abbas says this is a waste of time.

“It’s ended. It’s reached a dead end,” said Ibrahim Abrache, a Palestinian analyst in Gaza.

Israel accused Arafat of fomenting violence and refused to deal with him in the final years of his life. When Abbas assumed the Palestinian leadership after Arafat fell ill in late 2004, his appointment was hailed by Israelis as the beginning of a new era.

Abbas has decommissioned Palestinian militants who once fought against Israel and integrated many of them in the Palestinian security forces, which now patrol the largely pacified West Bank cities. His prime minister has won the trust of international donors by weeding out corruption that plagued Arafat’s reign.

But the loss of the Gaza to Hamas was a major setback on road to independence. The Palestinians seek both the West Bank and Gaza — territories lying on opposite sides of Israel — for their future state, with Israeli-controlled east Jerusalem as their capital. However Hamas, which seized Gaza from Abbas’ forces in 2007, rejects the peace talks with Israel that could culminate in a deal for an independent state.

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