Only Israel could be pressured by the free world to release convicted killers before the ends of their sentences (something that the US, UK and others would not dream of doing), agree to do so at the start rather than the culmination of peace negotiations, and still wind up looking like the bad guy the next morning.

These were 26 horrible people that Prime Minister Benjamin Netanyahu set free overnight Tuesday. According to information released by the Israeli authorities, almost all of them were directly involved in the cold-blooded killing of innocent Israelis. These were not men being held in administrative detention on unproven allegations. They had been tried, convicted and sentenced on the basis of firm evidence.

Their releases, meeting one of three preconditions set by Palestinian Authority President Mahmoud Abbas, subvert Israel’s judicial system, betray the families whose loved ones they killed, make fools of the security personnel who risked their lives to capture them and continue to risk their lives to prevent more such killings, and reassure future potential killers they will not rot in Israeli jails.

Netanyahu capitulated to Abbas’s immoral demand for their freedom — in a disgraceful agreement brokered by US Secretary of State John Kerry — only because he could not bring himself to accede to either of Abbas’s other two preconditions, and dared not allow himself to be portrayed as the recalcitrant Israeli prime minister thwarting the secretary’s indefatigable efforts to revive peace negotiations. To have done so would have been to alienate the Obama administration, whose support Israel needs in the effort to stop Iran’s nuclear weapons drive.

Netanyahu the opposition leader would have assailed another Israeli prime minister for having ordered these murderers released. Remember his relentless critique of the Labor leadership that gave the Palestinians guns in the early years of the Oslo process? Yet Netanyahu, invoking (just as prime ministers Yitzhak Rabin and Shimon Peres did) the wider “good of the nation,” has now set free men demonstrably ready to use such weapons to kill Jews.

To anyone but an Israeli prime minister seeking to maintain a largely hawkish coalition, and refusing to buck precedent and declare once and for all which territories Israel insists on maintaining and which it could relinquish in a fair and viable accord, Netanyahu’s actions are not merely self-defeating but incomprehensible. Why pick the prisoner-release option when Abbas’s two other demands — a settlement freeze and an agreement to negotiate the contours of a Palestinian state on the basis of adjusted pre-1967 lines — represent no real concession at all?

A settlement freeze could be easily reversed if, or rather when, the negotiations fail, as the prime minister himself demonstrated in September 2010 — ending the 10-month moratorium he had imposed at the request of the United States. And like it or not, Israel is negotiating with the Palestinians on the basis of the pre-1967 lines, since these are the only contours of sovereign Israel that are recognized by the international community, Israel’s best friends included. Even former US president George W. Bush, in indicating sympathy for an expanded Israel, was nonetheless looking at the Jewish state from the perspective of those pre-1967 lines.

But for Netanyahu, keeping his pro-settlement coalition together is an understandable imperative — especially since Labor’s Shelly Yachimovich insistently rebuffed his entreaties to join it. And in refusing to come clean and publicly declare which areas of the West Bank Israel is prepared to relinquish, the prime minister is only maintaining the dismal short-sightedness of all his predecessors these past 46 years.

How much money might Israel have saved if it had budgeted only for Jewish housing in West Bank areas it had determined were essential to its future? How many families might have been spared decades of uncertainty? How many lives might have been saved? How much more credibility and support Israel might have accrued internationally? How much more legitimacy might its own citizens have felt?

Ironically, Tzipi Livni, the self-regarded heroine spearheading the inevitably ill-fated new bid to cut a deal in nine months — with a Palestinian leadership that instinctively delegitimizes Israel’s very existence in its media, its schools, even its summer camps — is hugely complicit in Israel’s ongoing failure to declare its territorial red lines. Had her hubris not prevented her from internalizing that she had lost the 2009 elections, even though her Kadima won one seat more than Netanyahu’s Likud, she could have joined him as an only slightly junior partner in a coalition enjoying broad national consensus, a coalition that could have adopted consensual positions on the settlements.

As the years go by, the consequences of that selfishly missed opportunity only grow more obvious. And never more so than this week, when Israel accompanied the Kerry-pleasing, appalling release of Palestinian murderers with declarations about further building over the 1967 lines. The new housing will be in East Jerusalem and in the major settlement blocs — areas that most Israelis regard as integral to the country. But since Israel has never maturely confronted the settlements dilemma, and never definitively told itself or others where its vital borders must run, most people don’t bother to look closely at the new building specifics.

They don’t see an Israel that, in an act of supreme good faith in a partner who does not deserve it, on Tuesday night set free the murderers of its own people. They see an Israel that grudgingly released 26 heroic Palestinians to the welcoming arms of their loving families. They do not see an Israel providing homes for its people in its self-circumscribed tiny territory, on the western edge of a phenomenally unstable and threatening land mass. They see Israel viciously grabbing more Palestinian land.

Netanyahu is seeking the best of both worlds — trying to keep the international community onside, and not alienate the Israeli right. But he’s getting the worst of both worlds. He’s lost the EU, and he’s losing control of the Likud. Seeking to curry favor but refusing to make vital strategic choices, this week he has again contrived to subvert Israel’s own interests, and still wound up looking like the bad guy.