The standoff over Iran’s nuclear program is headed for a critical point next year, according to one of US President Barack Obama’s closest Middle East advisers.

“When you look at where we are today, I’d say that 2013 is going to be the decisive year — one way or another,” Dennis Ross, a former special envoy to the Middle East, said Thursday in Jerusalem.

Ross, who last year left the White House after two years as a senior director of the National Security Council, also called on Israelis and Palestinians to take concrete steps to restore confidence in a two-state solution, and urged Jerusalem to stop building outside the major settlement blocs.

“Once the president [Obama] adopted a position that our objective was prevention [of Iran’s capabilities to build a nuclear weapon], it puts you on a certain glide path. If diplomacy fails, then inevitably it moves you to the use of force,” Ross said.

Before the Obama administration would resort to a military strike on Iran’s nuclear facilities, it would likely try diplomatic means and possibly another set of crippling sanctions on the regime’s financial and economic sectors, he added.

“Roughly a year from now, if the current pace of the Iranian nuclear program continues unabated, we will likely reach a point where the combination of the lower and medium enriched uranium they have, and the numbers of centrifuges they have, will be such that it’ll be difficult for the US to know for certain whether we could act quickly enough to prevent the Iranians from presenting the world with a fait accompli when it comes to these programs.”

Obama has repeatedly vowed to prevent Tehran from acquiring nuclear weapons, and while he prefers to solve the conflict through diplomacy and sanctions, it has not taken any option off the table.

“Make no mistake: a nuclear-armed Iran is not a challenge that can be contained. It would threaten the elimination of Israel, the security of Gulf nations, and the stability of the global economy,” Obama said in a speech to the United Nations General Assembly in September.

According to Ross, who today serves as a counselor for the Washington Institute for Near East Policy, the West-Iran face-off will come to a close soon because the sanctions are increasingly pushing the regime into a corner.

Oil exports, which make up some 85 percent of Iranian government’s revenues, have been down from 2.5 million barrels in 2009 to less than a million. The Iranian currency is weakening and discontent is growing among the population.

“On the one hand, you have the pressures building on them [Iranian leaders], and there are a few of them. On the other hand, you have the march of their program and you have the positions of the US, which is one of prevention and not containment,” Ross said. “Somehow I see those elements coming together during the course of [next] year.”

Iran is likely to be “a very high national security priority” for Obama during his second term, Ross estimated, adding that Jerusalem and Washington are more or less in sync on the issue. “Will we agree on every detail, will we have the exact same view on timing? Perhaps not, although what we’ve also seen is ongoing conversation between the United States and Israel on the full array of what it is we’re doing as we approach this strategy.”

Speaking at a conference co-organized by the Jerusalem Center for Public Affairs, Ross also addressed the Israeli-Palestinian conflict, outlining several steps each sides should take to restore belief in the possibility of a two-state solution.

According to Ross, the Palestinians should stop inciting against Israel and start recognizing its historic ties to the land; adopt the language of “two states for two people;” place Israel on maps in textbooks; and strengthen the rule of law in the Palestinian Authority.

Israel should act in the West Bank to enhance Palestinian economic activity; decrease the number of military incursions into Palestinian-controlled areas; and start offering financial compensation and building alternative housing options for settlers who are willing to relocate from outposts into Israel proper or the major settlement blocs.

“Build only in the blocs,” Ross urged. “The blocs are everything to the west of the [security] barrier, and it sends a signal. Everything west of the barrier is eight percent. That means you’re not building on 92 percent of the West Bank.”

By restricting construction to Israel proper and to those settlements Israel expects to keep under any future peace agreement, the government would send the unmistakable message that it values the idea of an independent future Palestinian state.

“It would send an immediate message: ‘Look, we’re serious. We’re building in what should be our state. We’re not building in what will be your state.’ I think it will also send a message internationally to those you focus a great deal on this issue.”

In recent days, Israel has come under heavy international pressure against its plans to expand construction in several East Jerusalem neighborhoods and other areas beyond the Green Line.