Creating an Environment Conducive to Progress in Israeli-Palestinian Peace Talks

The opening of talks between Palestinians and Israelis last Monday marks a small but important step toward resuming the hard work of a long-held U.S. policy goal: two states for two peoples, Palestine and Israel. Since becoming secretary of state, John Kerry has held multiple meetings with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas in the effort to bring the two sides back to the negotiating table. While much work still lies ahead, Secretary Kerry’s efforts underscore the importance of the two-state goal for U.S. interests in the region, as well as the urgency of the moment—just getting the two sides to agree to talk to one another presents an opportunity that must not be squandered.

The challenges to achieving an agreement are well known. The Palestinians are divided, both geographically and politically, between the Fatah-dominated West Bank and Hamas-ruled Gaza Strip. While the Palestine Liberation Organization, or PLO, remains the internationally recognized representative of the Palestinian people, the Palestinian Authority has not held elections since 2006. The Israeli occupation and the continued growth of the Israeli settlements that it facilitates, as well as the ongoing blockade of Gaza, considerably inhibit Palestinian economic growth.

Prominent members of Fatah have said that the two-state solution is no longer viable and have begun speaking in favor of the creation of one democratic binational state for Arabs and Jews in all of Israel-Palestine. There is also a growing movement among Palestinians in the West Bank, Gaza, and internationally to boycott, divest, and sanction Israel. This movement opposes any engagement with Israel as long as the occupation continues.

On the Israeli side, while polls show that the Israeli public continues to support the creation of a Palestinian state, memories are still very much alive of the violent Second Intifada Palestinian uprising that resulted in the deaths of many Israelis and Palestinians. Israelis are understandably wary of withdrawals that could lead to a return of terrorism in Israeli cities or more rocket attacks, such as the ones they periodically experience from Gaza. The Israeli government is internally divided on the question of a two-state solution, with the settler movement ever-more entrenched in key positions of power and members of Prime Minister Netanyahu’s governing coalition—even his own Likud Party—now openly opposing the goal of two states.

Amid ongoing regional upheavals, some have suggested that the uncertainties surrounding the Arab awakenings throughout the Middle East and North Africa make this a particularly inopportune moment for peacemaking. But the opposite is true. As Secretary Kerry said in a recent speech to the American Jewish Committee, “The dawn of a new era in the region is exactly the kind of time to recast Israel’s relationships, to change the narrative with a new generation that is starting to make its voice heard.”

Others have asked why, given the various ongoing crises in the region, Secretary Kerry is focusing so much on resolving a conflict that has frustrated previous administrations. The answer is that the Israeli-Palestinian conflict is one in which the United States still has considerable leverage with both parties. As stated in various ways by officials from multiple administrations, the irresolution of the conflict undermines U.S. influence and inhibits the United States’ ability to achieve its goals in the region. Speaking recently, former U.S. Central Command, or CENTCOM, Chief Gen. James Mattis described the impact the lack of a solution has had on his work and why it underscores the importance of Kerry’s efforts:

I paid a military security price every day as a commander of CENTCOM because the Americans were seen as biased in support of Israel. … Moderate Arabs who want to be with us can’t come out publicly in support of people who don’t want to show respect for the Arab Palestinians. So [Kerry] is right on target with what he’s doing.

Given the extent to which the Israeli-Palestinian conflict continues to feed resentment across the region, the payoff for the United States of successfully brokering a just outcome could be tremendous. In a period of radical uncertainty in the Middle East, the conflict is one in which the United States retains the ability and the responsibility to help shape a positive and sustainable outcome.

The effort to restart direct talks is only one of several areas of focus for Secretary Kerry. Recognizing that talks are not an end in themselves, he has been moving on several fronts to create a context that is more conducive to productive negotiations and to tee up efforts to quickly capitalize on any progress that is made. This issue brief examines the key components of Secretary Kerry’s efforts.

Getting both sides to the talks

Since negotiations broke down in 2010, PLO Chairman and Palestinian Authority President Abbas had consistently declined to rejoin talks unless Israel met its 2002 Road Map commitment to freeze settlements. In a recent interview, Ambassador Maen Areikat, the Palestine Liberation Organization’s representative in the United States, also said that the Palestinians would not begin negotiations without clarified terms of reference based on the 1967 lines as a starting point—as articulated in President Barack Obama’s May 2011 speech on this issue—and that the release of Palestinian prisoners would also be necessary.

On the Israeli side, Prime Minister Netanyahu has repeatedly insisted that he is ready to begin talks without “pre-conditions,” but also stressed that Israeli security concerns and the recognition of Israel as a Jewish state must take prominence in discussions.

Reports following the announcement of talks last week indicate that Secretary Kerry had offered assurances to the Palestinians that talks would be framed on the basis of the 1967 lines. The Israeli government also announced that it would release a number of Palestinian prisoners as a good-will gesture: On July 28, 2013, the Israeli cabinet approved a request to release 104 Palestinian prisoners. In a statement, Prime Minister Netanyahu recognized how difficult this decision was for many Israelis to accept, but that this was a moment “in which tough decisions must be made for the good of the country.”

For their part, the Palestinians agreed to hold off on further efforts to build upon their successful bid to upgrade Palestine’s status from “non-member observer entity” to “non-member observer state” at the United Nations in 2012 and achieve recognition in other international bodies for the duration of the negotiations. Palestinian officials seem to understand that the U.N. bid ultimately produced more costs than benefits, particularly in regard to the withholding of U.S. aid. But while the Palestinians have agreed to hold off on these efforts for the time being, there is a strong likelihood that if talks do not produce tangible goods for the Palestinian people, these efforts will continue as a matter of political survival for the Palestinian Authority leadership.

The European Union has been supportive of Secretary Kerry’s efforts and is aiding the Palestinians monetarily in key areas. The European Union, for example, has given €10 million to Palestinian communities to address housing and poverty concerns. The European Union has also helped make up the Palestinian Authority’s salary shortfalls, putting €19.2 million toward the payment of the May salaries and pensions of nearly 75,000 Palestinian civil servants and pensioners in the West Bank and the Gaza Strip.

The European Union has also begun to take its own steps, however, particularly in regard to the settlement issue. In 2010 EU foreign policy head Catherine Ashton said that the European Union might use its trade ties with Israel as leverage to pressure Israel into renewing peace talks with the Palestinians. On June 30, 2013, the European Union adopted new guidelines, stating that future agreements between the European Union and Israel must exclude settlements in the occupied West Bank. The directive covers all areas of cooperation between the European Union and Israel, including economics, science, culture, sports, and academia. A U.S. official told Israel’s Haaretz newspaper that if talks did not begin soon, further EU measures could follow. “The Europeans are giving us the time and allowing us to try and get the talks going,” the official said. “But if we don’t succeed, they would want to go in other directions and take steps. The Israelis know it very well.”

Contradicting critics who suggested that the European guidelines would undermine Secretary Kerry’s efforts, both U.S. and Israeli officials told Haaretz shortly after the resumption of talks was announced that the EU measures had the opposite effect. President Abbas reportedly felt that the EU measures affirmed his position and made it possible for him to give up on his demand for a settlement freeze, whereas Prime Minister Netanyahu “feared that Israeli public would blame him personally for Israel’s isolation.” Both sides were thus incentivized to re-enter talks.

Reviving the Arab Peace Initiative

Cultivating regional support has been a vital element of Secretary Kerry’s efforts. In late March 2013, shortly before President Obama’s Middle East visit, Israeli media reported that Secretary Kerry would seek to revive the Arab Peace Initiative as a starting point for future talks. In early April it was reported that the Obama administration had informed the Palestinian Authority that the new U.S. approach to peace negotiations would be based on the Arab Peace Initiative (see text box) and that President Obama had discussed the matter with the Palestinian leadership during his March visit to Ramallah. Palestinian sources later said that, in discussions with Secretary Kerry, the president had proposed two small changes to the initiative to make it more palatable to Israel: The 1967 lines could be modified through mutual agreement, along with stronger security guarantees for Israel.

After meeting in Washington in late April, the Arab League agreed to support limited, mutually agreed-upon land swaps as part of a peace deal. “The Arab League delegation affirms that agreement should be based on the two-state solution, on the basis of the 4th of June 1967 line” with the possibility of a “comparable and mutual agreed minor swap of the land,” said Qatar’s then-Foreign Minister Sheikh Hamad bin Jassim al-Thani, speaking on behalf of the Arab League.

Moreover, al-Thani told reporters that the Arab League delegation understood that “peace between the Palestinians and the Israelis is … a strategic choice for the Arab states.” Shortly thereafter, the Fatah Central Committee accepted the Arab League’s proposal on land swaps and welcomed U.S. efforts to revive peace negotiations with Israel.

Ismail Haniyeh, Hamas leader in Gaza, rejected the move, saying the Arab League was not authorized to make such concessions on behalf of Palestinians. “The so-called new Arab initiative is rejected by our people, by our nation and no one can accept it,” Prime Minister Haniyeh said. “The initiative contains numerous dangers to our people in the occupied land of 1967, 1948 and to our people in exile.”

Israeli leaders reacted cautiously to the initiative when it was first introduced in 2002, claiming that it put the onus for peace entirely on Israel. Then-Foreign Minister Shimon Peres recognized the Arab Peace Initiative as an important step but one “liable to founder if terrorism is not stopped.” Other Israeli leaders rejected what they saw as the non-negotiable nature of the proposal. “If the Arab initiative is take it or leave it, that will be a recipe for stagnation,” Foreign Ministry Spokesman Mark Regev said in response to the initiative’s readoption in 2007.

The Israeli response to the amended initiative in March was mixed. Prime Minister Netanyahu insisted that the conflict is not about land but instead about the Palestinians’ refusal to accept Israel’s right to exist. Former Israeli Prime Minister Ehud Olmert, on the other hand, criticized the Israeli government’s failure to embrace the Arab Peace Initiative. “We are speaking of an opportunity that must be seized to renew the diplomatic process. … It’s a very important development,” he said, urging Israeli leaders to “stop making excuses.” Israeli Labor Party leader Shelly Yachimovich likewise called on Prime Minister Netanyahu to pursue the initiative, as did Justice Minister Tzipi Livni, who officially handles the Israeli-Palestinian negotiations.

On July 17, 2013, Secretary Kerry received the Arab League’s support for restarting negotiations, an important step in two regards. First, it gave President Abbas needed political cover for re-entering talks, about which many of his own Palestinian constituents have grown skeptical. Second, it demonstrated to skeptical Israelis that there is regional support for negotiations, which is necessary for any agreement to be seen as legitimate and sustainable. The Arab Peace Initiative underscores this, offering normalization and regional integration in exchange for an end to the Israeli occupation.

Economic-development assistance for the Palestinian Authority

At the World Economic Forum conference in Jordan in May, Secretary Kerry announced $4 billion in economic-development assistance for the Palestinian Authority. Developed by a group of international and regional experts, the goal of this aid is to increase Palestine’s gross domestic product by 50 percent and cut unemployment from 21 percent of the workforce to 8 percent in three years. “The intention is not just to make it transformative, but to make it different from anything ever seen before,” Secretary Kerry said, noting that $4 billion can make an enormous difference in a relatively small area with a population of 4 million people.

A group of 300 Palestinian and Israeli business leaders, led by Palestinian billionaire Munib al-Masri and Israeli venture capitalist Yossi Vardi, also announced a “Breaking the Impasse” public-relations campaign around the aforementioned economic initiative, designed to convince skeptical leaders that there is a constituency for restarting negotiations and tackling the tough issues.

A coordinated easing of travel restrictions will be necessary for this plan to succeed. Restrictions resulting from the continued occupation of the West Bank—including control of 60 percent of the West Bank designated by agreement as being under Israel’s military and civilian control, classified as “Area C” under the Oslo II Accords—hamper economic growth, the efforts to build Palestinian Authority institutions, and urban planning.

While Secretary Kerry discussed the broad contours of the economic-development plan, its details have been largely kept under wraps. Palestinian leaders have cautioned, however, that economic efforts cannot take the place of achieving Palestinian statehood. “The Palestinian leadership will not offer political concessions in exchange for economic benefits,” said Mohammad Mustafa, chairman and CEO of the Palestine Investment Fund, shortly after Secretary Kerry announced the economic plan.

Under the leadership of Middle East Quartet Representative Tony Blair, the plan is understood to have targeted eight sectors for growth: construction/housing, building materials, tourism, light manufacturing, agriculture, energy, water, and information technology. Over the past several years, cuts in donor aid have led to a severe financial crisis for the Palestinian Authority, leaving it unable to pay the salaries of its government employees. Unemployment in the West Bank is predicted to reach 24 percent this year, and in Gaza, it is currently 31 percent.

“The objective here is to leverage the private sector into making very, very significant investments into the West Bank and also to Gaza Strip,” said a senior State Department official. The official cautioned, however, that “[t]his will only work in the context of a two-state outcome.”

Security coordination

In late May Gen. John Allen, former commander of NATO forces in Afghanistan, was named as a special advisor for the secretary of defense focusing on security in the context of Middle East peace. Security is a top priority for the Israelis, and Gen. Allen’s work will focus on coordinating with Israel on the security arrangements and guarantees that would accompany the establishment of a Palestinian state and the withdrawal of Israeli forces from the West Bank.

Gen. Allen’s work complements the efforts of the U.S. security coordinator, or USSC, a position established in 2005 to reform, train, and equip the Palestinian security forces that is currently filled by Vice Adm. Paul Bushong. This serves the dual purpose of creating a professional security corps that enhances the Palestinians’ readiness for statehood while also addressing Israeli concerns about the capabilities of security forces postwithdrawal of Israeli soldiers.

While the development of an effective Palestinian security service is understood as a necessary element of a sustainable peace agreement, the use of these security forces to suppress dissent has the opposite effect, undermining the legitimacy needed for such an agreement. Given that the reform and training of Palestinian security forces has been done under U.S. auspices, this is an area in which the United States is particularly implicated. Additionally, as with the economic component, security in the West Bank must not be seen as an end in itself, but rather as supportive of the political goal. Security coordination between all parties will benefit from progress on the political front and will be harmed by a lack of progress.

Strategic communications

A key element of the Obama administration’s efforts has been to call on people to push their leaders to make the tough choices necessary for peace. “Speaking as a politician, I can promise you this,” President Obama said in his speech in Jerusalem in March, “political leaders will not take risks if the people do not demand that they do. You must create the change that you want to see.”

Understanding the importance of U.S. domestic politics to Middle East policy, the administration has initiated outreach to U.S. groups invested in the issue. Secretary Kerry echoed the president’s Jerusalem speech in his own speech to the American Jewish Committee on June 3. “Send the message that you are behind this hopeful vision of what can be,” he said. “Let your leaders and your neighbors alike know that you understand this will be a tough process with tough decisions, but that you’re ready to back the leaders who make them.”

On July 12, the Jewish Council for Public Affairs, or JCPA, and American Task Force on Palestine, or ATFP, announced a joint lobbying effort, with representatives of both groups meeting with staffers for the foreign-relations committees in the U.S. House of Representatives and Senate. “We are making the case together and trying to represent the win-win aspect of negotiations,” said Ben Suarato, a spokesman for JCPA. “We supported the two-state solution and the commitment of the U.S. government, the indispensable partner, to stay engaged,” said Ziad Asali, the president of the ATFP. “We thought it is useful to have a Palestinian and Jewish American statement that it is not a zero sum game.”

Conclusion and recommendations

While the images of a U.S. secretary of state shuttling back and forth from the Middle East may seem familiar on the surface, Secretary Kerry’s efforts to create movement on a range of fronts marks a shift in strategy for the administration. While still acknowledging direct talks between Israelis and Palestinians as the necessary arena for final status negotiations, Secretary Kerry’s approach is based on the understanding that certain steps can and must be taken in order to give the talks a greater chance of success.

There is a growing sense among many Israeli leaders that the time for a two-state solution is running out. In a recent op-ed, Yuval Diskin, former head of Israel’s Shin Bet security service, wrote, “This is a matter that requires national responsibility of the highest order. It requires taking advantage of what may be the last opportunity to extricate ourselves from the deadly clutches of our conflict with the Palestinians, clutches which we have tethered to ourselves.”

These warnings echo Secretary Kerry’s views from his June speech. “The difference is that what happens in the coming days will actually dictate what happens in the coming decades,” he said. “We’re running out of time. We’re running out of possibilities. And let’s be clear: If we do not succeed now—and I know I’m raising those stakes—but if we do not succeed now, we may not get another chance.”

While the Israeli-Palestinian conflict is only one of a number of regional challenges for U.S. policymakers, it is one in which the United States is uniquely engaged, by virtue of our “special relationship” with Israel and by the so-far failed efforts by multiple U.S. administrations to broker a lasting peace deal. As stated by former U.S. Ambassador to Israel Daniel Kurtzer, “It’s not the biggest problem in the region, but it is the issue on which perception of U.S. power is largely formed.” Ending the conflict won’t make other problems in the region simply go away, but by removing a core issue of instability, it will make addressing those problems easier. It will also serve as an important demonstration of American leadership at a moment when many in the region are questioning its value.

Recommendations for the Obama administration as it navigates these peace talks are as follows.

Continue to voice support for an agreed-upon frame of reference based upon President Obama’s May 2011 speech

While it may be necessary to keep the terms of talks vague at the outset, multiple U.N. resolutions and a strong international consensus support the use of the 1967 lines as a starting point for negotiations. While both sides understand that Israel will not return to the pre-1967 lines, the lack of an agreed-upon starting point has undermined negotiations in the past.

Increase engagement with all sectors of American, Palestinian, and Israeli society

President Obama should reiterate to Congress and to the American public why this effort is being undertaken and why it is in the U.S. interest to do so. The U.S. ambassador to Israel and consul general should also continue to look for opportunities to engage with the Israeli and Palestinian publics and amplify the president’s message from March 2013. All sides should know that the United States is in this for the long haul.

Keep a record of private commitments by parties and hold them to those commitments

Opportunities for breakthroughs have often been undermined by offers made and retracted in negotiations. While keeping the details of negotiations secret, the U.S. mediator should keep track of commitments made in order to continue to push the talks forward. The mediator should also ensure that once a commitment has been made, he or she enforces the terms of that pledge and holds the parties accountable.

Work to end the separation of the West Bank and Gaza

Palestinian unity is essential for any genuine, lasting peace between Israelis and Palestinians. The division between Gaza and the West Bank undermines the possibility that an eventual agreement will be sustainable or seen as legitimate by all sectors of Palestinian society. While the United States should be cautious about empowering Hamas, it should work with Israel and with European and Arab partners to end the economic separation between the West Bank and Gaza by allowing greater exports from Gaza to the West Bank as a first step.

Matthew Duss is a Policy Analyst with the National Security and International Policy team at the Center for American Progress.