BICOM

Key points

• Efforts continue to find a formula for resuming direct talks, but a resolution has not yet been found and Obama’s post-midterms strategy remains to be seen.
• Whilst the settlement announcement caused renewed strain in the US-Israel relationship, for now the US remains focussed on finding a pragmatic way back to talks.
• On Iran, Netanyahu called for a credible military option, but the US is more confident than Israel that sanctions can bring the desired outcome.

Developments in the peace process

Prime Minister Netanyahu’s met with Secretary of State Hilary Clinton on Thursday to discuss moving the peace process forward, at the culmination of his five day trip. Netanyahu and Clinton were joined by senior Israeli and American officials, indicating a serious and substantial effort to find a formula for moving forward. In the meeting the prime minister stressed the centrality of addressing Israeli security concerns in allowing progress to take place in the peace process. He also spoke about his desire to bring “many more Arab countries” into the peace process.

The statement issued after the meeting set out the terms of reference to which Secretary Clinton is currently working. It stated the goal of reaching an agreement “which ends the conflict and reconciles the Palestinian goal of an independent and viable state, based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements”. This reflects Clinton’s attempts to accommodate the positions of the two sides.

At present, the parties are at an impasse over the Palestinian demand for a settlement moratorium, which receives backing from Washington. Prime Minister Netanyahu is unwilling to renew the freeze without receiving a reciprocal gesture. According to reports in the Israeli press, Israel hopes to receive US security guarantees in return for a continuation of the settlement freeze that will allow the renewal of direct talks with the Palestinians. The US guarantees would give Netanyahu political cover with the right-wing forces in his coalition and preserve his credibility with the Israeli public.

However, the issue of settlements is only one part of the problem, as there is no agreement on the terms of reference for the renewed talks. The US and Palestinians appear to want to move swiftly to negotiations on borders, whereas Israel would rather see its security concerns, particularly its demand for an Israeli military presence in the Jordan Valley, addressed first. The Palestinians also insist that “1967 borders plus swaps” should be the basis of the negotiations. Netanyahu does not want to accept any terms on borders prior to the negotiations.  The Palestinians are now trying to bring pressure by threatening to seek a UN Security Council resolution which would bolster their position. They could for example, try to table a resolution endorsing the 1967 border as the border for a future Palestinian state.

Reports in Israel suggest that Netanyahu may request a meeting with President Obama in Washington in December, in order to try and finalise a deal to renew the settlement moratorium. The President was travelling in Asia during this visit, and has been distracted for some time with midterm elections. He expressed in a speech in Indonesia his ongoing determination to move the process forward. There is speculation in Washington about possible changes in US strategy, such as a change in personnel dealing with the peace process, or a US attempt to impose its own terms of reference on the parties. It remains to be seen how Obama will seek to unblock the process now that midterms are behind him.  

The impact of the settlement announcement

The announcement in Israel on Monday that two housing developments in Jewish neighbourhoods in East Jerusalem were being put out for consultation, created renewed tension between Netanyahu and the US administration. It recalled the disastrous announcement of new housing in East Jerusalem during the visit of Vice President Joe Biden in March 2010. This week’s announcement led to a war of words between Netanyahu and the US administration. President Obama and Secretary Clinton sharply criticised the developments as counter-productive, but Netanyahu defended the announcement and insisted that “Jerusalem is not a settlement”. Until this week there had been a quiet de facto freeze on such developments, put in place since the Biden incident.

The timing of this announcement soured the visit, regardless of the fact that it related to a housing project that is far from final and is unlikely to come to fruition for several years. However, the diplomatic fallout looks likely to be short term. The US is focussed intensively on efforts to broker the terms under which direct talks can resume. Whilst they could not let the incident pass without a reprimand, their approach is more pragmatic now than in the past.

It is unlikely that Netanyahu wanted this announcement to take place, but once it did, he clearly felt he had to hold his ground, for fear of losing face with the Israeli right. Netanyahu’s staunch defence of Jewish building in East Jerusalem may earn him political capital which will help him should he agree to a renewed settlement freeze in the West Bank.

Netanyahu’s call for a credible military option on Iran

Netanyahu opened his trip to the US by focussing on Iran. In particular he made the case to Vice-President Joe Biden that Iran can only be stopped if they face the credible threat of force. He cited the fact that Iran paused its uranium enrichment programme in 2003 after the US toppled Saddam in Iraq. Defence Secretary Robert Gates publicly rejected Netanyahu’s claim that only the threat of force could stop Iran, and insisted that sanctions were working. He said, “We are prepared to do what is necessary, but, at this point, we continue to believe that the political-economic approach that we are taking is, in fact, having an impact on Iran,” whilst adding that, “when it comes to Iran, all options are on the table.”

Meanwhile, John Kerry, Chair of the Senate Foreign Relations Committee, warned during a tour of the Middle East this week that the new Republican majority in the Senate would be more hardline on the Iranian issue. According to the Financial Times Kerry said, “[The House of Representatives] will be more ready to say, put up or shut up,” adding, “There are people in there who will not hesitate to say, ‘prepare the military option’.”

The administration, however, appears inclined to give the sanctions some time to work, and is not yet preparing the political or diplomatic ground for military action. Whilst Israeli officials acknowledge the sanctions are having an effect, there is general scepticism in Israel that they will prove critical. For this reason the confidence the US has in the sanctions is a source of concern for Israel, and the Israeli government will continue to try and make credible the threat of force against Iran.

The discussion over the appropriate way to tackle Iran’s nuclear ambitions is also tied to discussions on the Israeli-Palestinian peace process. On the one hand, Netanyahu repeatedly places the Iranian threat at the top of Israel’s strategic agenda, hence his insistence on the need to keep the military option on the table. However, Netanyahu acknowledges the need to maintain close cooperation with the US on this issue and ensure US support. Some speculate privately that Netanyahu will show flexibility on issues related to the Israeli-Palestinian negotiations in order to maintain high-level coordination with the US on Iran.

What happens next?

There are four possible scenarios that could emerge in the coming weeks:

1. The sides find a formula to get back to the negotiation table: This may include an Israeli agreement to restrain West Bank construction and an agreement to begin talks by focusing on the borders of the future Palestinian state. In return, Israel will receive a package of American security guarantees. However, a return to talks does not ensure progress. Substantial differences remain between the sides on all core issues of the negotiation and immense challenges still lie ahead.

2. An ongoing grinding effort to get back to negotiations: If no progress is made in the foreseeable future, the Palestinian will seek to place Israel under further international pressure and, with the support of other Arab countries, may try and pass a UN Security Council resolution. It is highly unlikely that the Security Council will endorse Palestinian independence outright, but may approve, for example, the 1967 borders as the internationally recognised borders of a future state of Palestine.

An Arab sponsored Security Council resolution would be politically difficult for Netanyahu and puts President Obama in a dilemma whether to veto such proposal. However, such a resolution would not change the rules of the game and would not offer a real breakthrough toward a final status resolution of the conflict.

3. A breakdown of talks: Perhaps the most problematic scenario involves a Palestinian withdrawal from the talks and a consequent resignation of Mahmoud Abbas from the Palestinian Authority presidency. An abrupt resignation will likely lead to a heated internal competition within the West Bank leadership for the presidency, threaten economic and political stability and further weaken Fatah. Abbas may opt for an orderly transition, but this will require a lengthy process of internal elections, which would once again bring the diplomatic process to a halt. 

This scenario, or another major Palestinian move like a unilateral announcement of independence will trigger a sharp Israeli response and possibly escalate the situation out of control.

4. A change of US approach to the peace process: After the midterm elections and the diminished ability to forward his domestic agenda, President Obama may choose to dramatically change the American approach to the Israeli-Palestinian peace process. This may include an increased personal engagement by the US president in setting the tone and the agenda or the process, and outlining clear terms of reference for reaching an agreement. This could place Israel’s leadership in a stark dilemma and could possibly lead to a coalition crisis in Jerusalem.

Regional factors could also have a direct impact on the dynamics of the diplomatic process. One such factor is the increasing instability in Lebanon. If the commission investigating the assassination of former prime minister Rafiq el-Hariri points to the involvement of Syria and/or Hezbollah, Lebanon could quickly see the resurgence of sectarian political violence. Another source of regional instability can arise from Iran’s continual defiance of international demands regarding its nuclear programme. Deterioration on either the Iranian or the Lebanese front will undoubtedly reshape the international agenda in the region and significantly change the pace and direction of the Israeli-Palestinian track.