ישראל נאמן | Lectures, Articles, Tours: Israel | Mideast onTarget | Elliot Chodoff & Yisrael Ne'eman | From Economic Peace to Two State Solution

From Economic Peace to Two State Solution

10 February 2010

By Yisrael Ne'eman

Riveted by the Iranian race to develop nuclear weapons Israelis are completely focused on the need to halt Ahmedinejad & Co. Whether the supposedly tough sanctions to be imposed by the West and Russia will work is yet to be seen. President Obama is aware of the Iranian threat to world security and is taking action, even if belatedly. Whether he will lead a military strike against Iranian targets should sanctions fail, no one knows. But once the Iranian crisis ends Israel will return to business as usual, meaning confronting Palestinian issues, tussling over conflict resolution and the implementation of the "two-state solution".

Should the great Iranian distraction be neutralized to the satisfaction of Israel and the West, the Palestinian challenge will be next on the list. And even should there not be a full resolution to the Iranian crisis one can expect a diplomatic push on the Palestinian front. Time does not stand still. Not only has Israeli Likud (supposedly right wing) PM Benyamin Netanyahu spoken about an economic peace with the Palestinians as a first step in solving the conflict but Palestinian PM Salam Fayyad has taken him up on the deal. During 2009 the Israel removed the vast majority of roadblocks in the West Bank, terrorism and Hamas have been contained to the point of close to zero attacks against Israelis as a result of joint security cooperation and the Palestinian economy is booming (estimated growth somewhere around 7% or higher). Netanyahu is implementing a construction freeze in Judea and Samaria (West Bank) and even though not total, it is stricter than anything seen in previous years.

Stage I of the famous Bush "Road Map" is coming to fruition. The Palestinians halt terrorism (with help from the IDF) and Israel ceases settlement construction. Taking a full chapter out of the Zionist playbook Fayyad wrote up his game plan for the establishment of a Palestinian State in August of last year in his 37 page document entitled "Palestine: Ending the Occupation, Establishing the State". It is finally realized that statehood is built by civilians from the bottom up. Within two years (beginning August 2009) he envisions a two-state solution based on the 1949-67 armistice lines and encompassing all the West Bank and Gaza with East Jerusalem as the Palestinian capital. Reviling the "occupation" but realizing the inability to win militarily he advocates jettisoning the armed struggle in favor of massive economic development throughout the entire West Bank while living alongside Israel. As an economist he is confronted with a stark reality: Israel's GDP for 2009 was approximately $200 billion while the Palestinian Authority economy is worth $12.6 billion. The Israeli population (incl. 1.5 million Arabs) is 7.4 million and the Palestinian about 4 million. On a per capita level Israel's economy is more than 8.5 times larger than the Palestinian and in absolute terms is almost 16 times greater.

Concerning economic development Fayyad, Netanyahu, the EU, the US and all others interested in stability are in favor of this first step. Although PM in a Fatah government, Fayyad, known as a moderate and pragmatist, faces opposition from within the regime. There are those advocating refugee return such as Pres. Mahmoud Abbas (Abu Mazen) while others on the right wing still speak of an "armed struggle" if all their demands are not met. Hamas, the Jihad and other Islamists are all violently opposed to a two-state solution but are holed up in Gaza facing increasing restrictions as the Egyptians continue building an above and below ground barrier to halt the flow of weapons and other military contraband into the Strip.

The time of reckoning has arrived in Israel and many would be grateful there is a right of center government in power since they can cut the deal with little official opposition. Echoing the now defunct Israeli Left, the "intransigent", "extremist", "right wing" Netanyahu announced in June his acceptance of the two-state solution, and as usual with the conditions of demilitarization of the Palestinian entity.

With the Iranians seriously contained or even defeated the door will be thrown wide open for world scrutiny and involvement in ending the conflict. But of course "the devil is in the details". All will be parachuted into Stage II of the Road Map delineating a temporary Palestinian State developing state institutions and an economy, yet without permanent boundaries. Israel is to gain further security cooperation.

One can expect Netanyahu to hesitatingly move the process along in the West Bank. His underlying motivation will be two fold – to avoid falling into a bi-national state and to ensure US/EU support leading to continued Israeli economic development. Today Jews are no longer a majority in the Land of Israel or what had been the Palestine Mandate from the Mediterranean Sea to the Jordan River. Both Jews and Arabs (Palestinian and Israeli) comprise a population of 5.6 million each. In the middle are several hundred thousand Eastern Europeans of non Jewish background who arrived in Israel during the Russian immigration in the 1990s. Israel's waning diplomatic position and economic development are intertwined, especially when it comes to Europe as Israel's largest trading partner. Add to that the Obama administration's focus on the need for rapprochement with the secular regimes in the Arab/Muslim world and it appears everyone is on the same page in working towards the two-state solution.

The sharpest internal issue in Israel will be how to handle those Jews living in the West Bank and outside whichever new borders will be drawn. For instance, one assumes the settlement blocs around Jerusalem will remain in Israel in a land swap with the Palestinians but at the minimum some 80,000 Jews (out of a population of a quarter million) will find themselves in the newly established Palestinian State. In July PM Fayyad, in answer to a question in Aspen, Colorado, announced that under his plan all Jews could remain in the Palestinian State, the same way the same way there is an Arab minority in the Jewish State. This was a welcome opening to solving the issue of the "settlements" only to be swept aside this past January when Fayyad speaking in Arabic in Ramallah nullified such a possibility. No government in Israel has the ability to remove such a large number of families and resettle them. Not only will Israeli/Jewish society be shredded but the financial burden will be unbearable. The hope is that Fayyad's former commitment overrides what he said just recently.

Jerusalem is a central issue. Most likely a borough system with Arab neighborhoods belonging to the Palestinians and Jewish neighborhoods being included in Israel will provide the beginning of an answer. A solution as to who controls the Old City (or is it split?) and the holy sites is a stickier issue, one which may be resolved with international involvement.

The other major issue for Israel is security - with the Jordan River serving as a natural boundary. Israel does not trust the UN or anyone else to ensure its security. When war threatens peace keeping troops have a tendency to flee or bunker down under ground. Israel will need a permanent military presence along the Jordan River, even if in conjunction with other forces (US, EU, Palestinian, etc.).

Whether one likes it or not, the moment of truth is arriving and not just on the Iranian front. The Fayyad Plan is certainly worth a starting point for discussions, although it should not be taken only at face value. Yet tough negotiating remains ahead. Israel must remain a physically secure Jewish and democratic state. Any other alternatives would undermine the original Zionist vision of Jewish national liberation.