Monday’s opening of the U.S. Embassy in contested Jerusalem, cheered by Israelis as a historic validation, is seen by Palestinians as an in-your-face affirmation of pro-Israel bias by President Donald Trump and a new blow to dreams of statehood. The festive inauguration helps harden Palestinian President Mahmoud Abbas’ rejection of Washington as a future mediator in the conflict with Israel, likely ushering in a prolonged period of diplomatic vacuum in which other powers are unwilling or unable to step up as brokers. Such paralysis and loss of hope have been major drivers of Palestinian unrest. Underscoring the conflict’s volatility, thousands...