BICOM

Key points

• Netanyahu succeeded in impressing even some of his doubters with his display of sincerity in the Washington peace summit. However, the expiry of the settlement moratorium threatens to undermine the progress that has been made.
• It is politically very costly for Netanyahu to extend the freeze as it is, but the Palestinians have insisted they cannot continue in the talks unless the moratorium stays in place.
• Underlying this issue is the question of trust. The Palestinians until now have avoided direct talks with Netanyahu, doubting his intentions and fearing the process will achieve nothing.
• There is a danger that the Palestinians will see the end of the moratorium as an opportunity to bring an early end to the talks, whilst blaming Netanyahu. The US will work hard to prevent such an outcome. The only way for the parties to develop trust is to stay with the talks. Given the one year timetable, it will not be long before the real positions of both parties are forced onto the table.

Introduction: the settlements issue

Last week’s Washington summit got the Israeli-Palestinian peace talks off to an impressive start. It was a particular success for Israeli Prime Minister Benjamin Netanyahu. Firstly, he secured the direct negotiating process with Palestinian President Mahmoud Abbas  which he had been calling for since taking office a year and half ago. Secondly, through his words and demeanour he caused sections of the Israeli and international media to question the scepticism that has surrounded his intentions.  A headline in the Independent on 4 September read, ‘Whisper it, but Netanyahu may just be the man to make history.’ The Economist declared on 2 September edition, ‘the Israeli prime minister may be swinging around from spoiler to genuine, if hesitant, peacemaker.’ A positive response to the talks was also reported in the Arab world.

However, these achievements are quickly reversible, and the expiry of the ten-month settlement moratorium on 26 September threatens them. The Palestinians have long argued that ongoing Israeli settlement construction in the disputed West Bank, undermines faith in Israel’s commitment to a negotiated solution. Last November, Netanyahu, out of a desire to establish his credibility, and under heavy US pressure, announced a freeze on new settlement construction in the West Bank. Palestinian President Mahmoud Abbas now says that if the settlement freeze is not renewed he will not continue with direct peace talks. Most of Netanyahu’s government is steadfastly opposed to continuing the freeze. The US last week put heavy pressure on both sides not to pull out of the talks prematurely. The Obama administration is fully aware of the problem and will be pushing both sides to find a solution at the forthcoming summit in Sharm el Sheikh and Jerusalem on 14-15 September. Can this early problem in the peace process be resolved?

Do the settlements matter?

Netanyahu has repeatedly argued that the Palestinian focus on settlements in isolation is an unnecessary distraction. He has asserted that the issue of settlements should not be the subject of preconditions, but be addressed as part of comprehensive talks which deals with all the issues together. Netanyahu’s position even before announcing the settlement freeze was that Israel would not build new settlements and not acquire more land for existing settlements. The construction taking place was within the boundaries of existing settlements. In many cases it is expected that these settlements, most of which lie close to the Green Line, will be annexed to Israel in a final deal in any case.

There was no settlement freeze during previous rounds of negotiations, including during the Annapolis process in 2008. However, Tzipi Livni, the Israeli foreign minister at the time, and now leader of the opposition, argues that the difference between then and now is trust. She claims that whilst the Palestinians were unhappy about settlement building, it was tolerated because they believed Livni, and Prime Minister Ehud Olmert were serious about moving quickly to a deal. The Palestinian’s faith that Netanyahu is serious about reaching an agreement until now has been non-existent. For this reason they long avoided entering direct talks, and made a complete halt in settlement construction a precondition for entering talks. Only under extreme US and international pressure did the Palestinians relent.

It is a matter of debate whether the Washington summit has changed the Palestinian attitude to negotiating with Netanyahu. There are reports in the Arabic press that the atmosphere in the Palestinian delegation took a ‘180 degree turn‘ for the better during the summit. If the Palestinians have now developed greater faith that the process will reach an outcome, then the settlement issue may now be less of a concern to them. However, if there is still doubt they may be more likely to maintain a hard-line on the issue.

How is the current freeze working?

Under the current freeze, a military order prevents any new construction being started on housing developments in the West Bank. This applies even to projects which received permits prior to the freeze. Construction that begun before the freeze is allowed to be completed, and the freeze does not apply to non-residential buildings like schools and synagogues. The freeze is being implemented on the ground, though the government allowed a small number of exceptions, and Israeli NGOs monitoring the situation have identified some breaches. 

The freeze does not include East Jerusalem. However, since March there has been a partial, de facto halt on new housing projects in East Jerusalem. The announcement of a new housing project in the East Jerusalem neighbourhood of Ramat Shlomo during the visit to Israel of US Vice-President Joe Biden caused major embarrassment to the Israeli government. Since then, controversial housing projects for Jewish neighbourhoods in East Jerusalem have not come before the district planning committee.

What is the problem with extending the freeze?

Most of the parties within Netanyahu’s governing coalition are against extending the freeze as it is, as are settler groups on the ground. Extending the current freeze will anger the right-wing parties in the coalition and large sections of Netanyahu’s own party, and potentially trigger defections from the government.

The opposition, centrist Kadima party has said it will support the government if it shows seriousness in the peace process, and could join Netanyahu in a new coalition. The right-wing parties know that if they abandon the coalition, Kadima could replace them. However, a major political realignment in Israel would have uncertain results. It is not clear how much of the Likud party would continue to back the prime minister. Also, if the right-wing parties leave the coalition, their opposition to making concessions to the Palestinians will be harder to control.

As for grass-roots settler groups, they have already begun to make their feelings known. Settler leaders announced a renewal of construction in defiance of the ongoing freeze, in response to the killing of four Israelis in a Hamas orchestrated attack on 31 August. Just as one cannot generalise about the settlements, one cannot generalise about the settlers. Many will respect the government decision whatever it is, but others will seek to defy it, and may respond with civil disobedience. The West Bank has enjoyed an extended period of calm which has created a helpful backdrop to the talks.  However, the Hamas orchestrated terror attacks which killed and injured Israeli civilians immeditatley prior to the Washington summit disturbed that calm. Friction between more radical settler groups and the Israeli authorities, and between settler groups and West Bank Palestinians, will also create a more difficult atmosphere for the talks.  

How might the problem be solved?

Various compromise positions have been suggested. One is to allow the freeze to expire, but maintain a quiet de facto freeze on issuing new construction permits in the West Bank.  In normal circumstances, any new permit for construction in the West Bank had to be approved by the defence minister. During his term as prime minister, Ehud Olmert instituted an informal arrangement whereby he insisted on also having signoff on these decisions. The Defence Minister, and Labour leader, Ehud Barak, acting in concert with Prime Minister Netanyahu could also block all new permits for construction.

However, this is not a complete solution. There are many old permits issued by the Defence Ministry prior to the freeze already in the hands of settlers. Those holding the permits simply require authorisation from the local settlement municipality to begin construction. Only extending the military order against new construction can prevent settler groups renewing construction on the strength of these permits.

Some within the government, including senior Likud minister Dan Meridor, have proposed another option. He proposes that the freeze be lifted in settlements where it is presumed that Israel will in any case retain sovereignty in a final agreement. Since these settlements are expected to remain Israeli anyway, it can be argued that building there does not undermine the two-state solution. Under his proposal the freeze will only be extended in the more isolated settlements, in areas that are likely to go to the Palestinians.

The problem with this approach is there is no consensus on which settlements are likely to stay part of Israel even within the Israeli government, much less between Israel and the Palestinians. Some members of the Israeli coalition are opposed to drawing any distinction between settlement blocs and isolated settlements, since they are ideologically opposed to any territorial concessions in the West Bank. Where to draw the border stands to be one of the most difficult issues in the negotiating process. Netanyahu has carefully avoided giving away his position on this issue prior to direct talks. It will be difficult, therefore, for Netanyahu to make an explicit statement of where the freeze is in place and where it is not, without pre-empting his negotiation position on borders.

At the weekly cabinet meeting on Sunday, following the Washington summit, the prime minister spoke of the need, ‘to think creatively, and in new ways, about how to resolve complex problems.’ He may hope to find a way to avoid explicitly renewing the freeze, whilst providing private assurances to Abbas that he will prevent provocative new construction developments. Whether Abbas will be willing to accept Netanyahu’s assurances, comes back to the issue of trust.

Conclusion: only continued talks can bring answers

Netanyahu succeeded in impressing even some of his critics with the sincerity he displayed at the Washington summit. However, there is still considerable scepticism among Palestinians to overcome. This underlies the problem of the expiry of the settlement freeze. Netanyahu will nonetheless be reluctant to extend the freeze, given the political cost that it will entail. Were the Palestinians convinced of Netanyahu’s desire to swiftly reach an agreement, particularly on borders, the settlement issue might be less of a concern. As it is, they may try to take the opportunity to abandon the talks and blame Netanyahu, something the US will work hard to prevent. It is hoped that they will not take this route out of the negotiation process. The only way to find out Netanyahu’s seriousness is to keep the talks going. Given the one year schedule, the Palestinians will not wait long to find out Netanyahu’s positions on the core issues, including borders and settlements.