Israel and the Peace Process: One Year after Netanyahu's Election

American Jewish Committee
Tuesday, 3 June 1997

One year after Binyamin Netanyahu won the Israeli national elections, two key upbeat developments stand out. But they are paralleled by a number of serious negative indicators. First, on the positive side, by and large in the past year there has been less Islamic extremist terrorism than in previous years. And secondly, as evidenced by the Knesset vote on Hebron in January and by more recent polls, an ever increasing consensus of Israelis (around 75 percent) favors a territories-for-peace deal with both a Palestinian state and Syria, and is even reconciled to the eventual emergence of a Palestinian state.

On the negative side of the ledger, however, the peace process is stalemated -- or worse. As U.S. Ambassador Martin Indyk said on May 18, "the core bargain of Oslo has broken down."

Israeli and Palestinian leaders no longer share a common vision of their objective. Nor is there any hint of movement with Syria. The Israeli government's apparent loss of credibility in Arab and, increasingly, U.S. administration eyes is paralleled by signs of a lack of confidence on the global economic level, as investments sink and the Israeli economy slows. Equally irksome for Prime Minister Netanyahu are the ever-present threats from within to his ruling coalition.

This briefing looks at current developments in the peace process, their ramifications for Israel's relations with the Arab world and the U.S., and their implications for the future of the Netanyahu government.

The Isolators and the Mediators

Prior to the rather sudden and surprising Netanyahu-Mubarak summit in Sharm el-Sheikh on May 27, Egypt and the PLO had for several months coordinated a broad strategy of isolating Israel diplomatically. Virtually all attempts by Israel to arrange official (or even back-channel) meetings were rebuffed by Cairo and Gaza; rare exceptions, such as high-level security talks, were agreed to only with an American presence. By denying contact, and encouraging aggressive diplomatic policies toward Israel in the UN and elsewhere, the Egyptians and Palestinians hoped to deny Prime Minister Netanyahu any sense of international legitimization for his territorial policies -- the Har Homa construction, additional settlement construction and land expropriation, and the low percentages of further redeployment -- and thereby force him to reconsider them.

Yet the Sharm el-Sheikh summit was convened without any prior agreement on progress that could be held up by Egypt as justification for breaking the boycott. Hence it appeared to constitute an Arab about-face and an Israeli triumph. Nonetheless Egypt's motives for changing its approach make sense from its standpoint.

At the most general level, Egypt wishes to see constant progress in the peace process as an antidote to the threats at home: the Islamic movement, terrorism, and the difficulty of maintaining the current momentum of its booming economy without regional stability. The decision by U.S. Secretary of State Albright to halt Dennis Ross's mediatory attempts presented Mubarak with what is for him a dangerous vacuum.

Equally urgently, Cairo needs to shore up its image of indispensable regional peacemaker at a time when the U.S.Congress is criticizing it for sabotaging the process and is seriously considering cutting its aid allotment. And it seeks to make a display of regional leadership to counter two embryonic initiatives of Syrian President Assad: an attempt to convene a summit that would constrain Cairo's freedom of maneuver; and an overture toward Iraq (a Syrian trade delegation) that reminds inter-Arab observers of the potential of developments in the northern tier -- Iran, Iraq and Syria -- to reverse the progress toward Arab-Israeli peace of recent years.

At the Sharm summit, Netanyahu reportedly offered Mubarak a package of concessions that satisfied neither Egypt nor -- through the good offices of Mubarak's advisor, Osama El-Baz -- the PLO. Israel would build thousands of new housing units for the Palestinians at "Har Homa B." It would license the construction of 450 new units at nearby Tsur Baher. It would cease demolishing illegally constructed homes in Area C. And it would pursue a fast track to a final status agreement. But it would not cease construction at Har Homa.

Chairman Arafat, in response, pointed out the irony of projecting a new Arab neighborhood for the vicinity of Har Homa, to be built on land owned by Arabs which would be confiscated from them prior to construction, then sold back to them. And he held out for a freeze on building plans for Har Homa itself.

Then, in the midst of the post-summit mediation, the Israeli press published a map alleged to constitute Netanyahu's final status plan for the West Bank. It offered the Palestinians only 40 percent of the total land mass, in three or four separate enclaves, crisscrossed by Israeli access roads, and without a common border with Jordan. Netanyahu denied the report, but not the substance of the map. Clearly such a proposal, which is totally unacceptable to the Palestinians, would deter Arafat from reentering a negotiation process designed to hasten final status talks.

Meanwhile polls showed that inside the West Bank and Gaza -- in sharp contrast to Israel -- support for the peace process was dropping for the first time in several years, while support for violence rose. Nor was Palestinian criticism of the Arafat government limited to its peace policies; condemnation of corruption and human rights abuses was also rising. The Palestinian Autonomy's elected Council, feeling neglected and slighted by Arafat, was reportedly contemplating mass resignation unless the Chairman began to take seriously the division of power within the nascent Palestinian democracy.

Arafat responded -- as always, indirectly and deniably -- with radical measures. The murder of Arabs who sold land to Israelis and the arrest and intimidation of journalist Daoud Kuttab are two key examples: the one designed to focus the Palestinian struggle on the land at a time when Israeli expropriations and settlement building are growing; the other intended to silence criticism. Yet at the same time, the PLO is carefully holding the line on violence directed toward Israelis.

Security coordination with Israel may be virtually nonexistent, but the total absence of Israeli (or Palestinian) forces at the wide-open entrances to Jericho and Ramallah reflects a high degree of mutual confidence that the situation is calm.

It is in the Arab sectors of Jerusalem that Arafat is currently concentrating his efforts against Israeli policies. The murdered land brokers all operated in or near Jerusalem; the PA is actively encouraging and financing widespread unlicensed building of new homes and home additions in Arab Jerusalem to "create facts" on the ground; Arab employees of the municipality are harassed; and a non-violent camp-out strike near Har Homa continues. The key themes are the centrality of Jerusalem and land issues in the Palestinian struggle, and the absence of any hint of violence toward Jews.

Israel -- Dealing with Threats

The Sharm summit and the Egyptian mediatory effort provided the Netanyahu government a respite from regional pressures. But it will be short lived unless concessions are made that actually renew Israeli-Palestinian talks. Otherwise Egypt is likely to break off its efforts and blame Israeli intransigence, thereby possibly escalating the crisis yet further. In this conjunction an interesting debate is taking place in high-level Israeli intelligence circles as to whether Egypt -- leader of the region's Arab states -- is structurally capable of playing the role of objective mediator.

In parallel Netanyahu has acted to shore up another problematic front: relations with the U.S. administration. The readiness of Albright, Ross and Indyk to blame Israel and the PLO together for the current impasse was just one indicator of the growing criticism of the Israeli government in Washington. Netanyahu has responded by sending three new diplomats to the U.S.: Dr. Dore Gold to the UN, Lennie Davis to the No. 2 spot in Washington, and Raanan Gissin to be minister of information in Washington. What characterizes all three appointees is their American English and close knowledge of the U.S. Indeed, Gold is likely to focus most of his diplomatic efforts on the American, rather than UN, scene. Netanyahu apparently believes that better hasbara (public diplomacy) will lead to an improved relationship with the administration.

Meanwhile the polls indicate that the Prime Minister has lost as much as 20 percent of his electoral support. With Ehud Barak chosen to lead the Labor Party, a concerted attempt to topple the government in the Knesset is now likely for the first time in a year. Barak will concentrate his efforts on the doves and doubters of Shas, The Third Way, Yisrael b'Aliyah and Gesher -- many of whose MKs and ministers have voiced heavy criticism of Netanyahu in recent weeks.

The Near Term

In this regard, the ruling coalition faces three near-term threats. For one, any day now the High Court may pronounce on the Bar-On Affair. A recommendation to indict the Prime Minister (which would run counter to the April 20, 1997, ruling of the Attorney General) is still a possibility; it would almost certainly bring about the collapse of the government. Then too, the Conversion Law crisis will come to a head by the end of June.

Unless a compromise is reached, enough MKs from non-religious parties may vote against the bill to prevent its passage, at which point Shas might make good on its threat to leave the government. Finally, as the September deadline for the second phase of further redeployment draws nearer, Netanyahu will be pressed to decide between the peace process and his right wing coalition. For it is extremely doubtful that the government as constituted will sanction an additional withdrawal along the lines -- at least 10 percent of the West Bank -- that the U.S. and the Arabs seek.

As for the Palestinians, their tactic of isolating Israel diplomatically has already been temporarily eroded by Egypt. And their internal tactics -- notably the executions of Palestinians said to have sold land to Jews, the harassment of critics and new reports of torture of prisoners, and the corruption and mismanagement documented by the Palestinian Authority's own auditing group last month -- have weakened their hand internationally. If Cairo's efforts do not produce a viable peace process soon, Arafat is liable, once again, to give a "yellow light" to Hamas violence and to large-scale violent demonstrations.

Syria, too, could conceivably opt to escalate the proxy war against Israel from southern Lebanon if the current stalemate continues. In this regard, developments in Syrian-Iraqi relations are worth watching -- as is the possibility, however unlikely, that the election of Muhammad Khatemi in Iran will usher in a reduction in Tehran's support for the Syrian-Hizballah campaign against Israel.

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