Last chance for a two-state solution to the Israel/Palestine conflict

By Lee Marsden

Apart from the economy Barak Obama's biggest challenge on entering the White House earlier in the year has been to address the seemingly never-ending Arab-Israeli conflict. With the swearing in this week of new Israeli Prime Minister Benjamin Netanyahu the prospects for a resolution of this conflict have reached an all-time low. Netanyahu, who leads a government of national unity consisting of Likud, Yisrael Beiteinu, religious parties and Labour, has a track record of supporting settlements in the occupied territories in defiance of international law and opposing Palestinian statehood. He has appointed Avigdor Lieberman, a man who campaigned on a platform of forcing Israeli Arabs to swear an oath of allegiance to the Israeli state and the transfer of Israeli Arab towns to the Palestinian Authority, as foreign minister.

Netanyahu is not averse to peace and stated earlier in the week that peace was an "enduring goal for all Israelis and all Israeli governments – mine included. This means I will negotiate with the Palestinian Authority for peace". The problem is that he wants peace on Israel's terms or not at all. Successive Israeli governments have pursued a policy of peace negotiations based on the Palestinian Authority being responsible for preventing attacks on Israel while simultaneously changing facts on the ground by either actively encouraging or failing to prevent the increase of Israeli settlements in the West Bank and East Jerusalem.

A precondition for any meaningful dialogue with the Palestinians according to chief Palestinian negotiator Saeb Erekat is the halting of all settlement activity and a public commitment to a two-state solution. A problem compounded by Lieberman and Netanyahu's deal to build 3000 new settlements around east Jerusalem. Facts on the ground with around half a million Israeli settlers in the West Bank and East Jerusalem make a two-state solution ever less likely without significant diplomatic and financial pressure from the US government.

President Obama has been waiting for the outcome of the Israeli elections before engaging with the problem. In his pending tray when he turns to Israel/Palestine is a recent bipartisan report presented to him by the US Middle East Project which considers 2009 as the last chance for a two-state solution. The report is written by leading foreign policy specialists including Paul Volcker, Obama's senior economic advisor.

The report substitutes a land swap taking into account areas heavily populated by Israelis in the West Bank for Palestinian demands for a return to June 4, 1967 borders. There is to be no right of return for Palestinians to Israel but rather financial compensation and resettlement assistance instead. Jerusalem is to be divided into ethnically determined Israeli and Palestinian controlled areas, with special arrangements and unimpeded access for both communities to the holy sites.

The report envisages a non-militarised Palestinian state fully responsible for its own security affairs within fifteen years. In the meantime a UN mandate would authorize NATO peacekeeping force under US leadership and including Israeli, Egyptian and Jordanian forces to be responsible for security. Such a solution, it contends, offers the most realistic prospect of a peaceful resolution of conflict that allows for a viable Palestinian state while addressing Israel’s security concerns.

If such a report represents the best US thinking on a two-state solution the prospects look bleak indeed. The Israeli policy of settlement building and partition walls appears to have succeeded in Washington at least. The new Israeli prime minister will have little incentive to change policy unless Obama can be persuaded to use economic and diplomatic pressure to end Israel's settlement building programme now and commit Netanyahu to a two-state solution which removes all Israeli settlements from the West Bank and East Jerusalem. Anything less condemns the cycle of violence to continue and puts a political settlement beyond reach.