All through the night of January 15, 1997, the Israeli cabinet was in agonizing debate. Prime Minister Benjamin Netanyahu, barely six months in office, was asking his cabinet to approve giving up Hebron. For its entire history, the Likud party had rejected the idea of giving up any part of the Land of Israel. And this was not just any land. After Jerusalem, Hebron is the holiest city in Judaism. (By the peculiar logic of the Middle East, the Arab claim to Jerusalem -- Islam's third holiest city, it is said -- is considered natural and just. Israel's claim to Hebron, Judaism's second holiest city, is deemed eccentric, indeed aggressive.)

Netanyahu's case was clear. Like it or not, the country had been committed to the Oslo peace agreement, and there was no way to turn back. Hebron had to be relinquished. His cabinet understood full well what that meant. Netanyahu was proposing an ideological earthquake. It was Hebron today and much, much more tomorrow. It meant that in "final-status" negotiations with the Palestinians, even larger pieces of territory would have to be given up.

But the immediate problem for the cabinet that night was what lay between Hebron and the final-status talks. Yes, they would clench their teeth and give up Hebron. Yes, they would prepare for even larger final-status concessions. But under Oslo, Israel was committed to further unilateral withdrawals during the "interim period" leading up to final status. Who would determine those withdrawals?

Under Oslo, the extent of the withdrawals ("further redeployments" or FRDs in diplospeak) was up to Israel. And the Clinton administration had assured Israel in the Hebron negotiations that this remained the case.

That night, however, the ministers were uneasy. They did not want to find themselves a few months down the road stampeded into giving away more land -- Israel's bargaining chips -- before even having reached the final-status talks. They wanted an unequivocal written reaffirmation from the United States that it would honor the Oslo agreement to leave the size of these FRDs to Israel.

At 11:00 P.M. they got it. U.S. ambassador Martin Indyk sent the cabinet secretary an urgent fax laying out the official U.S. position: "Further redeployment phases are issues for implementation by Israel rather than issues for negotiation with the Palestinians." A subsequent letter of assurance from Secretary of State Warren Christopher made clear that the "further redeployments" were an Israeli responsibility. A few hours later, in the small hours of the morning, the cabinet voted to withdraw from Hebron.

Fast-forward sixteen months. Indyk has climbed the greasy pole and is now assistant secretary of state for Near Eastern Affairs. Madeleine Albright is secretary of state. Israel has withdrawn from Hebron. And it has offered an FRD surrendering a further 9 percent of the West Bank to Arafat. Yet on May 5 in London, Albright tell Netanyahu that 9 percent is unacceptable and demands 13 percent -- no, 13.1 percent. She warns of unspecified consequences if Israel does not accede to this ultimatum.

Indyk's midnight fax is less than a memory.

This dispute has been portrayed by the Clinton administration, and echoed in a compliant press, as an Israeli squabble over 4 percent (actually 2 percent: Netanyahu has indicated that he might go to 11 percent). It is nothing of the sort. What is at stake is, first, whether Israel gets to decide what is required for its own security, and, second and perhaps even more important, whether the Clinton administration's assurances to Israel can be believed.

Why are these principles so important? Because the land Israel is now giving up is as close to its major cities as Bethesda is to Washington, as close as Kennedy airport is to Manhattan. Israel is surrendering to its historic enemy -- an enemy still committed to Israel's destruction -- what are essentially the suburbs of its major cities. To deny Israel at this stage the right to decide which hill or pass or wadi it can safely surrender is to summon it to an assisted suicide.

Furthermore, from the days of Henry Kissinger and the Sinai withdrawals, the United States has encouraged Israel to take territorial risks by offering concrete compensation -- jet fighters, early-warning stations, diplomatic commitments -- to try to make up for the security assets being relinquished. If these assurances can be voided cavalierly, then every Israeli withdrawal becomes nothing more than an exercise in unilateral retreat.

Accordingly, London did not go well. Netanyahu cited the Christopher assurance and told Albright no.


The State Department is not very pleased with Netanyahu. Things were so much easier with Shimon Peres. Peres considered the very notion of bargaining chips and reciprocal obligations to be a remnant of "old thinking," obsolete and unnecessary in the new Middle East of peace and brotherhood that he and his partner Yasser Arafat had ushered in.

So determined was Peres to let nothing stand in the way of his peace process that in 1996, for example, he welcomed a sham revision of the Palestinian National Charter as "the most important ideological change that has occurred in the Middle East in the past 100 years." (The Palestine National Council left the revision to a committee; the committee never met.) Peres would blithely have given up the bulk of the West Bank to Arafat in interim FRDs and entered the final-status endgame quite naked of bargaining chips.

There is a logic here. Who needs chips when you're talking to partners? Netanyahu and Likud, however, have another view of the peace process. They take Arafat at his word that the peace process is a struggle, a zero-sum game between adversaries, and not some magic of brotherhood and peace where Benelux breaks out in a land soaked with the blood of martyrs.

What is Arafat's view of Oslo? "The peace agreement which we signed is an 'inferior peace,'" says Arafat, most recently on April 18 on Egyptian TV. This phrase has a very specific meaning in the Arab lexicon. It refers to the Khudaibiya peace pact which the prophet Mohammed made with the Koreish tribe. Mohammed broke it within two years, attacking and destroying the Koreish. "Of course, I do not compare myself to the prophet," says Arafat, "but I do say that we must learn from his steps and those of Saladin." (Saladin made an armistice with the Crusaders, then declared a jihad and took Jerusalem.)

Because American diplomats ignore and discount such clear expressions of Arafat's disdainfully contingent view of Oslo, they are puzzled by Netanyahu's strategy, a strategy designed to engage Arafat's zero-sum strategy on its own terms. Everyone professes puzzlement at Netanyahu, always asking where he's going and whether he even knows where he is going. But his direction is not hard to fathom. His goal is to confront Oslo as it is -- not as it is imagined -- and to bring realism to the fantasists of both the hard Right and the dreamy Left.

First, he brought the Right into Oslo. Netanyahu was never a Greater Israel ideologue. As far back as the 1980s he understood that in the end there would have to be "territorial compromise." The question is how much territory and for what kind of compromise. Hebron was the Israeli hardliners' Rubicon, and Netanyahu made them cross it. It ended any serious representation of rejectionists in the Israeli ruling structure. Why, Arik Sharon, the hero of the Right and bugaboo of all correct-thinking peace lovers, is the one who came up with the current 9 percent withdrawal offer. There is practically no politician of any real authority or following in the country who is talking about anything other than how much to return for what.

This service to peace rendered by Netanyahu goes largely unrecognized and entirely unappreciated in the West. On the other hand, his second service -- injecting realism into Israel's negotiating position and, by lowering inflated Palestinian expectations, into Arafat's as well -- has earned him nothing but opprobrium from the West. By the time Netanyahu came to power, the utter casualness of Peres's concessions had led Arafat to assume that he would come out of the Oslo middle game -- the interim period, with its Israeli FRDs -- with as much as 80-90 percent of the West Bank in his pocket.

Netanyahu understood that for Israel this is insanity. Under those circumstances, Israel would enter the life-and-death endgame -- the final-status negotiations over permanent borders, Palestinian statehood, Jerusalem, water, refugees -- entirely naked. Arafat would bring in his perennial chit, peace (his threats of renewed violence are never far beneath the surface), and Israel would have already given up its chit, land.

Netanyahu's major achievement in his two years in office has been to lower Arafat's expectations. This has understandably made Arafat cross and displeased the State Department. But it has worked: Arafat now knows that he is not going to get 90 percent of the disputed territories in the middle game. The current bitter negotiations are over how close he will come to 40 percent. (He already has 27 percent.)

This achievement has come at high cost. Having rejected Peres's easy downward path of giving it all away in the middle game, Israel has suffered diplomatically and Netanyahu politically. The lovey-dovey multilateral conferences -- the tip of the hat and the handshake from the likes of Qatar and Morocco that Peres so cherished -- are in suspension. The Arab grant of legitimacy to Israel has largely been withdrawn. Critics blame this on Netanyahu's blundering. In fact, it demonstrates how flimsy and insubstantial these so easily reversible gestures were in the first place.

Netanyahu himself has been subject to personal attacks of a savagery rare even by Israeli standards. It got so out of hand that one member of the peace camp wrote a celebrated and now notorious article in the leading liberal daily, Ha'aretz, entitled "The Year of Hating Bibi." Ari Shavit argued that the hostility of Israel's Left-dominated elites to Netanyahu had reached such pathological proportions that the phenomenon could be explained only as an irrational projection onto him of all the disappointments and frustrations felt by the Left as its illusions about Oslo had crumbled.

Netanyahu is undeterred. And not just, as conventional wisdom has it, for reasons of coalition politics. Getting out of the middle game with some substantial part of the West Bank still in hand remains his considered strategy. And it is popular. Ronald Reagan used to say that in the end what counts is not critics but box office. Netanyahu, despite his critics, leads in the polls. He reflects the realism of a very realistic Israeli public.


The current impasse concerns what shape -- literally -- Israel and the Palestinian territory will have at the start of the endgame. The rub is that, whatever the extent of the current Israeli FRD -- 9 percent of the West Bank, or 13 percent, or something in between -- Arafat insists that Israel owes him yet another FRD after that.

Technically, he is right. But technically, too, the Israelis can make this third FRD as small as they want. (Indeed, they could give Albright her cherished 13 percent by making the current FRD, say, 9 percent and making a final FRD of 4 percent.) Understand: Netanyahu is prepared to swallow Albright's 13 percent. But only if that clearly puts an end to the middle game. No more FRDs. On to final-status negotiations.

The problem is that Arafat is balking and the administration has maneuvered itself into the position of negotiating on Arafat's behalf. The only path through this crisis is clear: Israel will have to knuckle under to Albright's 13 percent ultimatum, and Arafat will have to forgo any substantial third FRD and content himself for the time being with about 40 percent of the prize. Not bad, considering that five years ago the only real estate he controlled was in Tunisia.

The endgame -- final-status talks -- can then begin. And then what?

It may turn out that the endgame is unplayable. It is not for nothing that the original Oslo negotiators, who found such comity and common purpose, could themselves not even begin to decide such sensitive issues as Jerusalem, final borders, refugees, and water. They kicked all that into the safe and distant future. After five years of a poisonous middle game filled with terrorism and mistrust, it is even less likely that these conundrums will now be solved.

The more likely scenario is the following: Israel and the Palestinian Authority negotiate fruitlessly for a year. On May 4, 1999, the date on which these negotiations are supposed to have concluded, Arafat unilaterally declares a Palestinian state.

Arafat has threatened to do this. He has recently backed off under pressure from Albright, but this backing off, like his promises, is to be treated with skepticism. If he calculates in May 1999 that he can safely declare statehood, he will do it. He can be assured of immediate recognition from perhaps 150 countries, including all of Europe. The vital question is what the United States will do. American recognition is the key to real statehood. It clears the way for U.N. membership, acceptance in all other international bodies, and undisputed legitimacy.

Whichever way the United States moves, Israel's response is foreordained. It will annex the 60 percent or so of the West Bank still under its military control. This is almost entirely empty land. (Remember: 98 percent of Palestinians are under Arafat's rule today.) This would establish for Israel a security belt between it and Palestine, a state with which Israel's relationship would be one of confrontation -- and without Oslo or any other principles to guide that relationship.

The Palestinians would undoubtedly challenge this annexation and claim the 60 percent for themselves. The result would be an intense crisis and possibly war.

The key question for U.S. negotiators now is how to avoid this dread scenario. How to keep the endgame from degenerating into mutual unilateralism next May?

The best way to forestall a unilaterally declared Palestinian state is for the United States to make absolutely clear that it will recognize no Palestinian state that is not the product of a negotiated settlement. That and that alone will make Arafat pause before bringing on the whirlwind. Sure, he'll get recognition from Zimbabwe and Malaysia, even France. But in the end, it is Washington that counts. And he may not want to risk American ostracism with a step that Washington has made clear it will reject.

What is wrong with Palestinian statehood? Wouldn't this finally get one of the stumbling blocks to peace out of the way? Don't even Israelis already know that there will be a Palestinian state? Of course they do. But unilateral, as opposed to negotiated, statehood carries huge dangers. Two of the immutable attributes of a state are its ability to arm itself as it pleases and its ability to conclude alliances as it pleases. These are the two conditions that Israel cannot tolerate in a Palestinian state nestled up against its major cities. It would be suicidal for Israel to permit an armed Palestine allied with, say, Syria and Iraq. Even Israeli doves, who welcome a Palestinian state, have always insisted that it be demilitarized and not permitted to station allied Arab armies on its soil.

Which is why Hillary Clinton's endorsement of a Palestinian state was so disastrous. First, because she placed no restrictions on what it would look like and what it could do. She said explicitly that the Palestinian state should be "on the same footing as any other state." But a Palestinian state like all others -- i.e., militarized and allied -- is a prescription for war.

Second, because she demanded no quid pro quo. She signaled to Arafat that he could have his state for free without having to make any concessions. Was Mrs. Clinton launching a trial balloon on behalf of the administration? No one knows. But her statement certainly was read that way in the Middle East. It might therefore have given Arafat hope that if he does declare unilateral independence, Hillary's husband will follow suit with recognition.

Arafat's goal is clear. He wants his state, and he wants it to encompass as much of the West Bank as possible. Statehood is America's to give. Territory is Israel's. When Arafat concludes that he will need to give in order to get, he'll deal. If Arafat understands that he will get statehood and territory only in the context of successful final-status talks, his mind will be concentrated on the wisdom of (1) quickly concluding the current middle game and (2) making the concessions necessary to get a final-status deal with Israel.

This is not quite the beginning of the end. But it certainly is the end of the beginning. Despite the current calculated gloom, with realism on all sides a deal is still very possible. Whether it will hold longer than Mohammed's Khudaibiya agreement, however, is another matter.

Charles Krauthammer is a contributing editor to THE WEEKLY STANDARD.

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