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Can Trump and Netanyahu Make Progress Toward the “Ultimate Deal”?
Can Trump and Netanyahu Make Progress Toward the “Ultimate Deal”?
People walk past signs bearing the name of U.S. President Donald Trump in Tel Aviv, Israel, on 14 November 2016. REUTERS/Baz Ratner

Can Trump and Netanyahu Make Progress Toward the “Ultimate Deal”?

As U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu prepare to meet, the fundamentals of the Israeli-Palestinian peace process hang in the balance.

What aspects of the Israeli-Palestinian conflict are Trump and Netanyahu likely to discuss at their meeting in Washington on 15 February?

The meeting will be crucial for the future of the peace process and the remaining prospect of a two-state solution. 

It seems that Trump’s policy views on the conflict are evolving, though it’s not clear from what, to what. Initially it seemed that his administration might not continue to support the two-state solution: the Republican Party platform pointedly omitted any mention of it; Trump’s nominated ambassador to Israel, David Friedman, rejects it as a “scam”; the family of Trump’s son-in-law and peace process envoy, Jared Kushner, has donated money to settlements; and the White House issued a statement saying, “we don’t believe the existence of settlements is an impediment to peace”.

However Trump’s recent gentle criticism of Israeli settlement announcements indicates that he may yet tack back toward more conventional U.S. positions. In an interview with Israel Hayom, he said settlements are not “a good thing for peace”, and “every time you take land for a settlement, there is less land left [for Palestinians]”. But isolated episodes notwithstanding, the U.S. has never been particularly effective in preventing Israeli settlement activity.

The fundamental questions, including the U.S. stance toward the two-state solution, what form a Palestinian entity would take, the nature of the process to get there, Jerusalem and the attitude toward settlements, will surely be discussed. They are crucial, not only for Israelis and Palestinians, but also for the entire region, as the U.S.-led peace process has been central to the regional peace and security architecture since the 1978 Camp David accords.

His hawkish public image notwithstanding, Netanyahu has pursued a fairly risk-averse policy. He believes that Israel should avoid a full-fledged Palestinian state, which he thinks likely to be taken over by pro-Iranian elements and pose a major security threat for Israel. He has also opposed annexation of the West Bank, which he judges would result in Israeli citizenship for its entire Palestinian Arab population, thereby diluting Israel’s Jewish character, and also risk significant difficulties with the U.S. and neighbouring Arab states.

[Netanyahu] has capitulated to domestic political pressure from the right wing on a number of occasions, and he is under pressure to do so again.

Since 2009, Netanyahu has been able to deflect dramatic steps in either direction. He would likely prefer to consolidate U.S. support for his long-term objective of greater Israeli presence in parts of the West Bank and limited Palestinian sovereignty – a Palestine that is non-contiguous and does not have East Jerusalem as its capital or full control over its airspace or maritime zone. Netanyahu seems to understand that some limits on settlement construction and avoiding annexation of any part of the West Bank, at least for the foreseeable future, are necessary to achieve this goal, but he has capitulated to domestic political pressure from the right wing on a number of occasions, and he is under pressure to do so again.

Israeli Defence Minister Avigdor Lieberman and U.S. Secretary of Defence James Mattis are the most likely candidates for generating relatively pragmatic Israeli-American understandings regarding the limits of settlement construction. Lieberman is a proponent of a two-state solution (one with most of Israel’s Palestinian citizens in the Palestinian state), while Mattis considers the conflict an impediment to the projection of American power in the region. Regardless of what the two engineer, if Israelis conclude that Trump has, in effect, given Israel carte blanche on settlements, it could be costly in electoral terms for Netanyahu. The pro-settlement, national-religious Jewish Home party, an important part of Netanyahu’s governing coalition, has been gaining support in polls since Trump’s election and is likely to gain further ground if Netanyahu fails to demonstrate his commitment to maintaining Israeli rule over all of what this constituency refers to as Judea and Samaria (the West Bank).

Recent polls show that some 50 per cent of the Israeli public would like to see full annexation of the West Bank. While this only amounts to a notional preference in the absence of concrete constraints and costs, it is indicative of the general mood on the right. Jewish Home won eight of 120 seats in the last election (7 per cent), compared to Likud’s 30 (25 per cent). The public does not vote only on this single issue, the main opposition bloc has only a few seats less than the Netanyahu coalition in the parliament (Knesset), and roughly half the electorate continues to support a two-state solution. The prime minister, however, clearly fears major electoral costs if he is seen to oppose full or partial annexation, as Jewish Home leaders advocate, as well as personal costs within Likud where adversaries seek to replace him as the party chairperson.

Netanyahu needs a scapegoat to blame for any curbs on settlement activity and formal annexation. Former U.S. President Obama fulfilled that role well, though the pressure he put on Israel limited settlement construction rather more than Netanyahu would have liked. (Nevertheless, since Netanyahu’s election in 2009, there have been on average 1,500 housing starts annually, over a third of which are beyond the separation barrier.) It is unclear whether Trump would be willing to provide Netanyahu with political cover, not least given the president’s support from Christian evangelicals and the passions of his pro-annexation advisers.

What are the domestic and international implications of Knesset passage of the “Regularisation Law”, which gives legal immunity to settlements and outposts built on seized private Palestinian land in the West Bank? Might Israel go so far as to annex the West Bank?

With this law, the Knesset took the unprecedented step of legalising the confiscation of private Palestinian lands in the West Bank. This immunises settlements built on such lands – which until now have uniformly been considered illegal even within the Israeli legal system – in effect preventing them from being evacuated by court order.

The law breaks with 50 years of policy in the West Bank, during which Israel acted in accordance with its understanding of the law of occupation (the Fourth Geneva Convention, 1949), even if it repeatedly declared the convention did not apply. Israel tried to convince the world that its West Bank presence was temporary, for security purposes, that it played no role in transferring its citizens there and that Palestinians were not harmed by settlements. This law authorising expropriation of private Palestinian land removes any pretence, already thin, that Israel conforms to its own interpretation of the law of occupation. International reaction has been sharp. UN Secretary-General António Guterres issued a statement saying the measure contravenes international law and will have “far-reaching legal consequences” for Israel. This law could well be decisive for the International Criminal Court’s prosecutor, who is considering a full-fledged inquiry into settlements.

The underlying reason for the law’s passage is electoral politics. Netanyahu has tried to counter annexation pressure from the right by allowing more settlement building (a move that many, including no small number of Israelis, consider paradoxical and self-defeating), but this hasn’t alleviated pressure on him, so he has found himself backing steps he previously opposed as harmful for Israel’s future. Exhibit number one is the Regularisation Law: he repeatedly denounced it as a bad idea that could put Israel’s top leadership in the dock at the International Criminal Court. He also fears it will further politicise and thereby harm Israel’s Supreme Court, which will be pressed to adjudicate its constitutionality. That Netanyahu nevertheless ended up supporting the law suggests that his political vulnerability may lead him to support additional moves. For instance, he is under similar pressure to support a bill to annex the settlement of Ma’ale Adumim, just east of Jerusalem, including an as yet unbuilt part of that settlement that could render a contiguous Palestinian state all but impossible.

What do you think the consequences would be of moving the U.S. embassy to Jerusalem?

The Trump administration seems to have delayed its promised move of the U.S. embassy. There were even contradictory reports indicating that Netanyahu privately stalled the move, though he continues to support it publicly. The crux of the controversy is that because Israel and the U.S. both deem East Jerusalem part of a single city, relocating the U.S. embassy anywhere in that city, even to its western part, ahead of a final settlement of the Israeli-Palestinian conflict would be interpreted as U.S. recognition of a united Jerusalem as Israel’s capital, subject in its entirety to Israeli sovereignty. This would appear to leave no prospect that East Jerusalem would eventually be the capital of a Palestinian state. It is hard to predict the full consequences of such a move, but the risks are high.

[There's] a risk that relocating the embassy would lead the Palestinian leadership to take confrontational measures it has so far avoided.

Here again, Netanyahu is in an awkward position. He is keen to have the U.S. embassy in Jerusalem. He wants wide international recognition that Yerushalayim (the city’s Hebrew name), including its annexed eastern parts, is the capital of Israel. And he thinks U.S. recognition would be the best first step. But he has tried hard to establish working relations with Jordan’s King Abdullah and Egypt’s President Abdel Fattah al-Sisi and has invested a great deal in building relations with Gulf leaders in a common front against Iran (another important topic of discussion during the meeting). His Arab counterparts are telling him the embassy move would be a major blow to their domestic legitimacy and that would undermine anti-Iran coordination.  

As Netanyahu sees it, the most direct potential strategic risk for Israel relates to Jordan. King Abdullah declared himself, the custodian of Jerusalem’s holy sites – particularly the al-Aqsa Mosque, Islam’s third holiest. Recognition of Israeli sovereignty over the entire city would be portrayed as the king’s personal failure, opening a door to public protest in a majority-Palestinian country that could prove difficult to close. Instability there would be an existential concern for Israel, as Jordan provides it strategic depth. In its 1994 peace treaty with Israel, the Hashemite Kingdom committed to prevent any foreign army from operating against Israel in its territory. In and of itself, relocating the U.S. embassy to Jerusalem would probably not topple the king, but it would increase his vulnerability and give additional ammunition to groups such as the Islamic State, which is a significant internal threat in Jordan.

The leaderships of Egypt and Saudi Arabia would also be weakened by a perceived failure to defend Islam’s sacred sites. The pro-Iranian camp and Salafi-jihadist groups across the region would seize on this symbolic defeat to delegitimise those governments. Moving the embassy could thus play very negatively into the region’s sectarian dynamics.

Closer to home is the risk that relocating the embassy would lead the Palestinian leadership in Ramallah to take confrontational measures it has so far avoided. Recognition of Israel’s claim to Jerusalem would be interpreted in Ramallah as a severe blow to a two-state solution. Simply put, Palestinians believe a state without East Jerusalem as its capital would be worthless. Netanyahu might not think he can reach a peace agreement with Palestinian President Mahmoud Abbas, but he does not want to close the door on a diplomatic process that has been useful to him. But he might overestimate how far he can push Abbas without torpedoing the peace process or precipitating the Palestinian Authority’s collapse in a wave of public outrage.

What advice do you have for Trump on the peace process?  For others?

First and foremost, the U.S. should renew its commitment to two states as the only formula for lasting peace and security, though as Crisis Group has long advocated, the parameters of the negotiating process should be revised.

The danger is that American-Israeli understandings will ... constrict a future Palestinian state so severely that no Palestinian leadership would be willing or able to accept it.

Trump’s reference to an Israeli-Palestinian peace agreement as “the ultimate deal” suggests he sees the conflict through a transactional lens. That approach is unlikely to succeed. Both sides have deep concerns and grievances that cannot simply be traded off. With deeply riven societies on both sides, a knotted history and a multitude of stakeholders, any solution will have to come out of a gradual process. Matters of identity, religion and historical narrative are particularly fraught and have been neglected for too long. They are not readily negotiable, and outsiders, lacking credibility with local populations, are ill-equipped to intervene in them.

Netanyahu will likely try to steer Trump away from anything resembling an “ultimate deal”. He may suggest U.S.-Israeli understandings that allow for some settlement construction as well as the gradual fashioning of a highly constricted reality within which Palestinian national rights would be realised in the future. But because of his domestic vulnerability, he will also need Trump to provide him with political cover from the Israeli right wing. Whether the president will agree, and in exchange for what, remains to be seen. The danger is that American-Israeli understandings will create facts on the ground that would constrict a future Palestinian state so severely that no Palestinian leadership would be willing or able to accept it. Arab and European states, as well as Russia, have a vital interest in opposing such understandings. Otherwise, in the fiftieth year of the occupation, the Israeli-Palestinian conflict will enter a dangerous new stage.

U.S. President Barack Obama addresses attendees during the 70th session of the United Nations General Assembly at the U.N. Headquarters in New York, on 28 September 2015. REUTERS/Andrew Kelly
Report 172 / Middle East & North Africa

Israel/Palestine: Parameters for a Two-State Settlement

The collapse of U.S.-led Israeli-Palestinian talks in 2014 led to political instability, rising violence and settlement expansion. To improve his successors’ peace-making chances, President Obama should push for a new UN Security Council resolution setting out the basic parameters of a deal.

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