Summary

• A broad fabric of anticipated developments and attitudes suggests only limited progress toward Israeli-Palestinian peace in the next few years.
• The elimination of the Iraqi armed forces in 2003 has minimized the danger of an all-out conventional war between Israel and its eastern neighbors, reducing the strategic value for Israel of the West Bank. At the same time, however, Israel is conscious of the danger posed by a nuclear-armed Iran, a danger that might intimidate Israel's neighbors into taking a more aggressive stance toward Israel, exacerbating Arab-Israeli relations and escalating the Israeli-Palestinian conflict.
• U.S.-supported democratization in the Middle East may reduce inter-Arab support for the Palestinian cause but could also inspire Islamic movements, generating greater Palestinian militancy and tougher negotiating positions.
• The collapse of Oslo, the failure of Camp David, and the ensuing four years of conflict have undermined Israeli trust in a full-fledged peace process with the Palestinians. In the near term, this attitude is unlikely to change because of Palestinian leadership changes, however welcome they might be.
• Israel has opted to disengage unilaterally from the Gaza Strip and northern West Bank rather than to seek to negotiate its withdrawal. Disengagement is motivated first and foremost by a drive to ensure Israel's survival as a Jewish and democratic state rather than to reactivate the peace process. Most Israelis now support fencing off the Palestinian territories and removing isolated settlements to protect themselves and to avoid absorbing Palestinian Arabs.
• Israel's Arab population is no longer seen as a "bridge to peace" with the West Bank and Gazan Palestinian population but as yet another obstacle to achieving a two-state solution.
• Both Israel and Egypt are concerned about the emergence of a Hamas-dominated Gaza Strip after Israel withdraws from it and if ordnance is smuggled into Gaza from the Sinai Peninsula. Israel has agreed to allow enhanced Egyptian police and military forces to guard part of Sinai. Israel's need to cooperate with Egypt in order to deal with terrorism dictates an altered approach to the Egyptian military and the strategic role of the Sinai Peninsula.
• Fundamental Israeli notions regarding the strategic uses of territory are in flux. There is a growing recognition on the dominant political right that both Israel and Palestine have demographic-political needs that, at least theoretically, could be dealt with by abandoning traditional attitudes toward territory.
• The Israeli political system, far from providing a mechanism for solving Israel's conflict with the Palestinians, has become a serious obstacle to a solution. Any likely governing coalition in the coming years will probably be unable to sustain more than a partial peace process before collapsing under the weight of internal coalition contradictions.
• While the settlement movement's opposition to Prime Minister Ariel Sharon's disengagement policy failed, the settlers will continue to threaten the viability of future Israeli governments intent on dismantling additional settlements. The settlers fully intend to exact such a high price in national trauma and delegitimization of the government that future governments will not dare to follow in Sharon's footsteps.
• International legal rulings and threats of sanctions against Israel are proliferating. These are having a growing impact on the Israeli establishment, which is actually reaching out to some multinational institutions. Measured international involvement, short of peacekeeping or mediation, could be helpful in achieving limited progress.

About the Report

The United States Institute of Peace's Project on Arab-Israeli Futures is a research effort designed to anticipate and assess obstacles and opportunities facing the peace process over the next five to ten years. Stepping back from the day-to-day ebb and flow of events in the Middle East, this project examines broader, "over-the-horizon" developments that could foreclose future options or offer new opportunities for peace. The effort brings together U.S., Israeli, and Arab researchers and is directed by Scott Lasensky of the Institute's Research and Studies program.

In this report, Yossi Alpher identifies which local, regional, and international trends will have the greatest impact on Israel's relationship with Palestinians in the coming years. Next in the series is Khalil Shikaki's study of long-term trends in Palestinian public opinion and their policy implications for the peace process.

Yossi (Joseph) Alpher is currently coeditor of the bitterlemons family of Internet-based Middle East dialogue publications. He is a former director of the Jaffee Center for Strategic Studies at Tel Aviv University. In 2000 Alpher served as a senior adviser to Israeli prime minister Ehud Barak.

The views expressed in this report do not necessarily reflect views of the United States Institute of Peace, which does not advocate specific policy positions.