Tel Aviv

Masters of the art teach that subtlety, indirection, and on occasion mis-direction are crucial to successful diplomacy. Perhaps, then, President Obama is up to something shrewd.

When he took to the stage in Cairo in early June to address Muslims and discuss "the situation between Israelis, Palestinians and the Arab world," he called on Palestinians to renounce violence and develop their own political institutions, Israel to stop building in the West Bank, and Arab states to assist the Palestinians and recognize Israel's legitimacy. Since the speech, however, much has been heard from the administration about the need for an Israeli settlement freeze and little about Palestinian and Arab state obligations.

If something shrewd does lie behind the decision to focus on Israeli concessions, then Obama and his administration are executing a dangerous gambit. It is likely to reinforce the false analysis popular among Palestinians, Arabs, and European and American intellectuals, an -analysis reaffirmed earlier this month in a Washington Post op-ed by former President Jimmy Carter: "A total freeze of settlement expansion is the key to any acceptable peace agreement or any positive responses toward Israel from Arab nations."

And if the high-profile imposition of pressure on Israel is not a gambit, if the president believes that once Israel freezes West Bank settlement construction then the parties will proceed to successfully negotiate a final status agreement that brings into existence a Palestinian state in the West Bank and Gaza that lives in peace with Israel, then he is dangerously deluded about the basic elements of the Israeli-Palestinian conflict and the overall logic of Middle East politics.

Either way, the hard truth is that, much as the settlements represent a formidable challenge to a peace agreement, other and intractable differences on critical issues separate Palestinians and Israelis. To make negotiations a top priority as the Obama administration appears to have done is to expend limited time and energy on what at best will be a sideshow.

Meanwhile, real, if incremental progress toward the day in which Palestinians can establish a state of their own consistent with Israel's national security interests depends on tasks to which the Obama administration has paid lip service but which it has done little to advance. These include improving dysfunctional Palestinian political institutions and political culture, building up the Palestinian economy, containing and defeating Hamas, cajoling or compelling Arab rulers around the region to assist the Palestinians and normalize relations with Israel, and, looming over all, countering Iran's multipronged strategy--involving the acquisition of nuclear weapons and sponsorship of Hezbollah and Hamas terror--to impose its brand of Islamic rule on the entire Middle East.

According to the generous interpretation, which informed Israelis following the comings and goings of Middle East envoy George Mitchell and special assistant to the president Dennis Ross consider plausible, the Obama administration is well aware that the settlements are not the sole or even most significant obstacle to peace. But seeking to set America's relationship to the Muslim world on a new footing and needing Palestinian Authority (PA) president Mahmoud Abbas and Arab rulers on board for his ambitious plans, Obama has sought to earn good will around the region by demonstrating his readiness to require painful concessions from Israel.

If such is Obama's gambit, it has thus far failed to bear fruit. No Arab ruler has come forward to propose a thawing of relations with Israel should Israel agree to freeze settlements. Fatah's recently concluded Sixth General Conference was short on conciliatory statements and long on reaffirmations of Palestinians' right to engage in armed struggle. And Hamas continues to attack Fatah for failing to embrace jihad to destroy Israel.

Perhaps Obama will announce a breakthrough in his September 23 address to the United Nations General Assembly. The reopening of Israel's tiny, unmarked trade mission in Qatar or a few meetings at the U.N. with Arab leaders or the launching of a few cultural or scholarly exchanges would be nice, but more than gestures will be necessary to build Israeli confidence. Permission from Saudi Arabia for El Al passenger jets to fly through Saudi airspace en route to Asia would be a step forward.

The sort of action that is long overdue and almost certainly not slated anytime soon, say an invitation from the Saudis for the Israeli foreign minister to visit Riyadh, would be a momentous one. It might not instantly produce crowds in Israel demanding substantial withdrawals from the West Bank, but it would transform public debate. The sight on TV screens in Tel Aviv and Jerusalem of an Israeli foreign minister shaking hands with his counterpart in the Saudi capital would spark enthusiasm for major concessions in a nation that has not ceased to yearn for peace even as it has, with each passing year, grown more resigned to persevering in the absence of a willing and able peace partner.

But suppose Obama's gambit, if gambit it is, pays off. Suppose Israeli prime minister Benjamin Netanyahu agrees to a settlement freeze sufficient to bring Abbas back to the negotiating table. What then? Most likely the Obama administration will relearn the sobering lesson taught to the Bush administration during the frustrated quest for a peace agreement that began at the 2007 Annapolis Conference. As in 1949, 1967, and 2000, Palestinians are unprepared to make hard decisions and accept the painful concessions necessary to bring into existence a Palestinian state.

People of good will and understanding on both sides of the conflict have for several years recognized the broad outlines of a final agreement between Israel and the Palestinians. Having in 2005 withdrawn from every last inch of the Gaza Strip and in the process removed 10,000 civilians from 21 settlements, Israel will, in exchange for "secure and recognized boundaries," return most of the West Bank territories that it seized in 1967 when Jordan attacked it during the Six Day War. The suburbs of Jerusalem and a few large settlement blocs will remain under Israeli sovereignty, but Israel will evacuate tens of thousands more citizens. Jerusalem will stay Israel's capital, even as accommodations will be made for Palestinian self-government in East Jerusalem. And, because if implemented it would spell the destruction of Israel, the Palestinians will need to abandon their claim that all Palestinians--not merely those who left or were forced out of their homes between 1947 and 1949 during Israel's war of independence, but the millions of their children and their children's children living in Gaza, the West Bank, and in refugee camps in Lebanon and Syria--have the right to return to Jerusalem, Jaffa, and Haifa.

It was an even more generous offer--including the dismantling of most of the settlements and Palestinian sovereignty over half the Old City of Jerusalem--that Ehud Barak delivered to Yasser Arafat in July 2000 at Camp David. Rejecting the offer outright, Arafat proceeded a few months later to launch the Second Intifada and to release against Israel wave after wave of suicide bombers. While it is unlikely that, if Obama administration-initiated negotiations fail to yield an agreement, Abbas will launch a third intifada, little has changed that would allow him to sign the very generous deal rejected by Arafat, let alone the undoubtedly more restricted offer which would come from Netanyahu.

A wide swath of Israelis in and out of the national security establishment believe that Abbas does not want to go down in history as the Palestinian leader who yielded land or Jerusalem to the Jewish state. Abbas, they believe, will settle for nothing less than a return to the 1949 armistice boundaries or Green Line, which would place the entire Old City of Jerusalem under Palestinian authority and give Israel indefensible borders. And Abbas has given no sign that he is prepared to abandon the Palestinians' uncompromising belief in their right of return. Indeed, according to Giora Eiland, a former head of the Israeli National Security Council, the right of return is not merely non-negotiable for the Palestinians, but it and not a state of their own has all along been the Palestinians' main goal.

The inability of their leaders to compromise on crucial issues is only the beginning of the obstacles to peace emanating from within the Palestinian people. Even if their leaders were able to summon the courage to compromise, the dozens of hostile Fatah factions show no signs that they could be persuaded or compelled to go along. And there are more formidable obstacles to implementation.

Start with the lack of basic political institutions. Fifteen years ago Israel rescued Yasser Arafat from growing irrelevance in Tunisia and, under the auspices of the Oslo Accords, brought him and hundreds of his fighters and followers to Gaza and the West Bank to preside over the PA. Arafat proceeded--as he had in Lebanon and before that in Jordan--to govern as a despot and bring chaos and anarchy. He stole most of the billions of dollars of foreign aid that the United States and the international community transferred to the PA between 1996 and 2004, billions that should have been used to build roads, factories, hospitals, homes, and schools. Mahmoud Abbas is not a colossal thief and may be devoted to pragmatic accommodation, but he governs in the Arafat mold, and the PA has never had free and fair elections, and lacks clear laws, impartial law enforcement, administrative efficiency, and sound financial practices.

In late August, PA prime minister Salam Fayyad made news by announcing his intention to concentrate on building Palestinian political institutions so that in two years' time, regardless of progress in formal peace negotiations, the Palestinians would be in a position to declare their independence. No seasoned observer in Israel believes that Fayyad can come close to preparing the PA for independence on such a timetable. It is not that they doubt Fayyad's competence or commitment. He has both and can certainly point to real successes. The West Bank economy is growing. The streets of Ramallah and Nablus are bustling. The Palestinian security forces are gradually assuming greater responsibility for maintaining internal security and, in cooperation with the Israeli Defense Forces and the Shabak (Israel Security Agency), have dealt Hamas a series of setbacks.

But one shouldn't be misled. An American-trained technocrat, Fayyad has little grassroots support. The Palestinian legislature is powerless, and the Palestinian judiciary both corrupt and incompetent. Worse could be said about municipal government throughout the West Bank. A decent criminal justice system will require years of concentrated effort. In addition, much of the Palestinian economy's growth is due to massive injections of foreign aid finally reaching their target. Even so, unemployment remains high. Finally, while the Palestinian security forces, trained in Jordan by U.S. Lieutenant-General Keith Dayton, have made impressive strides in the last few years, they will need many more years of recruitment and training before taking over sole responsibility for maintaining peace and order on their streets, let alone developing the wherewithal, should Israel security forces cease to operate around the clock inside the PA, to prevent the West Bank from becoming an armed Hamas camp posing intolerable threats to Tel Aviv and Jerusalem.

A viable peace also depends on transforming the Palestinians' poisonous political culture. Israeli experts argue that most Palestinians still don't accept the legitimacy of a Jewish state in the land of Israel. According to the estimates of senior security officials, perhaps 30 percent of West Bank Palestinians are pragmatic like Abbas and Fayyad, believing that Israel, despite its fundamental illegitimacy, is a regrettable fact with which Palestinians must learn to live. About the same number believe that Israel is illegitimate and refuse to learn to live with it. The remaining 40 percent or so are up for grabs. Unfortunately, according to Reuven Berko--who recently left the Israeli army after serving for ten years as adviser on Arab affairs to the chief of the Jerusalem police--PA-run schools, newspapers, and television are tipping the balance by assiduously cultivating hatred of Israel and Jews. Berko, fluent in Arabic, remarked sardonically, "After watching 10 minutes of Palestine TV, I want to pick up a knife and find a good Jew to kill."

Even if Palestinian political institutions were reformed and Palestinian political culture detoxified, Hamas would still present an insurmountable obstacle to peace. Abbas only got serious about taking on the Iranian-sponsored terrorist group in 2007 after it conquered the Gaza Strip and brutally murdered many of its Fatah rivals. Today, Hamas functions in Gaza not just as a terrorist organization but also as the elected government and a military organization. And it aspires to bigger and better things. It is not out of sensitivity to -Israel's security concerns but because of Hamas's aim to take over the PLO and transform itself into the one genuine vehicle of Palestinian nationalism that Abbas threw his support to the Bush administration's efforts to bolster the Palestinian security forces in the West Bank. Their success in fighting Hamas in the West Bank has enabled Israel to reduce the number of roadblocks and checkpoints, which has promoted commerce and improved the quality of life for ordinary Palestinians. Hamas suicide bombers have not pulled off an attack inside Israel for more than a year, and not a single rocket has been fired into Israel from the West Bank. But the progress is fragile.

Even if PA and Israeli security forces make further strides in the West Bank to weaken Hamas, Abbas exercises no influence over Gaza and has little plausible claim to represent the 1.5 million Palestinians living there. Consequently, should the Obama administration succeed in relaunching talks, Abbas will be negotiating a separate peace for the West Bank. There too, however, Hamas has an effective veto. So long as the battle against Hamas requires Israeli security forces to operate freely within the West Bank--as, according to Israeli national security assessments, it will continue to do so in the near and intermediate terms--the PA cannot pretend to be a sovereign state.

There are those who favor giving Hamas a chance. If treated with respect, if included in talks, if allowed to govern in Gaza without crippling blockades imposed by the Israelis and Egyptians, if given more opportunity to share authority in the West Bank, it will mature as a political organization and become a useful partner. According to this argument, Hamas's 1988 charter, which calls for permanent jihad to destroy the state of Israel, should be discounted as an outdated document written by hardliners not reflecting the inevitable moderation caused by the passage of time and the acquisition of responsibility for governing. But this, maintains Reuven Berko, is wishful and reckless thinking. Hamas's only reason for being, he contends, is the elimination of Israel as a Jewish state. Its defining Muslim beliefs forbid it from giving up any part of the Waqf, or land once ruled by Muslims, to non-Muslims, especially to Jews who under Muslim law are prohibited from governing themselves in a state of their own. In other words, Hamas cannot, without ceasing to be Hamas, abandon the quest to reclaim for Islam all the land that lies between the Jordan River and the Mediterranean Sea.

Nor is Hamas the only one obstructing peace between Israel and the Palestinians. Arab rulers, especially American allies Egypt and Saudi Arabia, exercise effective vetoes of their own. To offer concessions--on boundaries, on Jerusalem, on the right of return--and survive the fury of rival Fatah factions and the violent opposition of Hamas while winning the support of ordinary Palestinians, Abbas would need a legitimacy that only can be conferred by the willingness of Egypt's president Hosni Mubarak and Saudi King Abdullah to persuade their own peoples that Palestinian compromises with the Jewish state are in order. Neither Mubarak nor Abdullah has shown much proclivity for such leadership.

The unwillingness of Arab leaders to lead does not change the fact that peace between Israel and the Palestinians is irreducibly a regional matter. Full normalization of relations with Israel by Arab states may have to await a peace treaty with the Palestinians, but no lasting treaty will be possible that is not preceded by improvements in the relations between Israel and Arab states. Interim steps should include reining in Al Jazeera--the popular Qatari news network that broadcasts a steady stream of vile anti-Semitic and anti-Israel propaganda to the Arab world; cleansing school systems around the region of textbooks that demonize Israel and teach that Jews are subhuman; releasing state-run Arab newspapers from the obligation to denounce Israel on a daily basis; and inviting Israel to open offices and eventually embassies in Arab capitals and then reciprocating.

Egypt can take another important short-term step toward a viable peace between Israel and the Palestinians. Recognizing the danger posed by an Iranian-sponsored jihadist government on its eastern flank, Cairo has begun to improve security on the border it shares with Gaza and block the smuggling of Iranian weapons and Iranian trained jihadists through the Sinai Peninsula. But it needs to do more. In the absence of dramatic improvements in Egyptian border security, Israel expects that within a few years Hamas will be equipped with missiles that can reach Tel Aviv, and Israeli soldiers will have to undertake another military incursion into Gaza to destroy them.

The picture is not pretty, but progress toward peace can be achieved. Given the unbridgeable issues that divide the Israelis and Palestinians and the enormous obstacles to implementation should the unbridgeable be bridged, the Obama administration needs to abandon its naïve and arrogant belief that it can bring peace by dictating top-down solutions. Instead, it should take a page out of the community organizing tradition in which Obama was educated and for the near term concentrate U.S. policy on assisting Fayyad's efforts to develop Palestinian political institutions and the economy. Make no mistake: Political and economic development in the West Bank is not a distraction from the peace process but crucial to constructing the conditions under which Palestinians can one day govern themselves and Israelis can live within secure and recognized borders.

And because of the threat that Hamas poses to development efforts and to Israel, and because Iran funds, trains, and equips Hamas and strengthens Hamas's stature by fanning the flames of Islamic extremism around the region, making the curbing of Iran's influence a centerpiece of American foreign policy equally is essential to the peace process.

That Obama has nothing positive to show for eight months of engagement with Iran sets back the quest for peace between Israel and the Palestinians. While he has been waiting patiently, the world's leading state sponsor of terror has been busy expanding its conventional arsenal, crushing democratic dissent, and pursuing nuclear weapons. In February, Iran launched the Omid, its first locally produced satellite. In May, it launched the Sajil, a missile with a range of more than 1,200 miles. In June, it rigged a presidential election and violently broke up peaceful public demonstrations. In July and August, it conducted Soviet-style show trials. All the while, as the Obama administration has apologized to it, reached out to it, and covered for it, Iran has continued to enrich uranium. Earlier this month, Tehran announced it would not discuss or consider ceasing its nuclear program. And when, in the face of a September 24 deadline to resume talks or face another round of international sanctions, Iran agreed to wide-ranging discussions but excluded the subject of its nuclear program, the United States promptly agreed, with scarcely a word of displeasure, to an October 1 meeting.

Since, as masters of the art teach, subtlety, indirection, and on occasion misdirection are crucial to successful diplomacy, perhaps there is more to the president's conciliatory ways with Iran than meets the eye. But occasionally diplomacy calls for candid, precise, and public pronouncements. Just now it would build Israeli confidence, command the attention of waverers among the Palestinians, and provide a much-needed teaching moment for the international community if the president of the United States were to lay the groundwork for October 1 discussions with Tehran by insisting that Iranian sponsorship of Hamas (and Hezbollah) terror has no place in the civilized world. If the president were prepared to back up such words with deeds, it would promote international order, reassure our Arabian Gulf allies, and substantially improve the prospects of peace between Israel and the Palestinians.

Peter Berkowitz is the Tad and Dianne Taube senior fellow at the Hoover Institution, Stanford University.

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