BICOM Analysis: Can Netanyahu break the deadlock?


Key Points

  • Prime Minister Benjamin Netanyahu is widely believed to be preparing an interim proposal to offer the Palestinians.
  • Israeli-Palestinian negotiations that produce a comprehensive and final agreement by the end of this year are an increasingly unrealistic prospect.
  • Nonetheless, there is growing international pressure for a breakthrough, including Britain and other European states, on both Israel and the US.
  • The difficulty of balancing international and domestic political pressures could make it a defining moment of Netanyahu’s political career.
  • Whether such a proposal brings momentum back to the peace process will depend on the international reaction, and the extent to which the Palestinians feel the pressure to return to talks.

Introduction: A plan is in the offing

It is widely believed in Israel that Prime Minister Benjamin Netanyahu is preparing to launch a new diplomatic initiative, aimed at breaking the deadlock in Israeli-Palestinian peace talks. Whilst there is no official confirmation of the proposal, which appears to still be in the planning stage, officials are not denying its existence.

Until now Netanyahu’s position has been that direct negotiations, with no preconditions from either side, could result in a comprehensive and final agreement by the end of this year. But with no talks at all at present, this looks increasingly unrealistic. Indeed, the only direct negotiations between the sides, during September 2010, required intense American pressure to start up, and collapsed within days, after the expiry of Israel’s ten-month settlement moratorium.

Now, instead of the stasis of ‘all-or-nothing’, there is growing and broad-based support in Israel for promoting an interim agreement. In an attempt to inject momentum into the moribund process, the plan would transfer territory currently under Israeli control to the Palestinian Authority. Many in Israel are proposing a sovereign Palestinian state within temporary borders, though it is not clear if Netanyahu is ready to support this. In order to address Palestinian concerns that Israel’s first move would be its last, any such plan would presumably include some assurances about the timetable for a final status agreement.

Additional Israeli steps might include releasing Palestinian prisoners, removing roadblocks and halting construction in isolated settlements. At the same time, Netanyahu would reassure hesitant coalition partners that the government’s core principles have not been compromised. He could perhaps do this by building intensively in the settlement blocs and Jerusalem neighbourhoods that Israel expects to keep in a final status agreement.

Why change strategy now?

Since his return to office two years ago, Netanyahu has consistently called for direct negotiations as the only way to move forward. After nearly two decades of Israeli-Palestinian peace efforts, he argues, there is very little that each side does not know about the others’ positions and that there is no need for additional mediation. His Bar-Ilan speech of 2009 aimed to signal his willingness to resolve all issues through negotiations. Palestinians concur that there is nothing left to discuss, and that genuine peace efforts now require decisions. Indeed, last September both parties agreed to try and find a framework agreement addressing all the core issues.  However, the Palestinian leadership deeply distrusts Netanyahu and is unwilling to expose itself to domestic criticism by reengaging in talks. The Palestinian effort to achieve international recognition outside of the context of a negotiated process is highly successful, and Israel finds itself under increasing pressure. As long as this dynamic prevails, there is little incentive for the Palestinians to resume the negotiation process.

Conversely, the Palestinians have little enthusiasm for a phased process. Palestinian Authority President Mahmoud Abbas flatly rejects any interim deal that includes temporary borders, fearing that a partial Israeli withdrawal would become permanent. Netanyahu’s reticence until now may have been rooted in his first term as prime minister. The Oslo process he inherited of phased Israeli withdrawal in pursuit of a comprehensive deal, led to a lethal combination of Israeli concessions and Palestinian violence. The interim Wye River agreement that he agreed with Arafat in 1998,  paved the way for the collapse of his coalition and his electoral defeat after less than three years in office.

But the current policy of negotiations without preconditions is floundering because the Palestinian precondition of an Israeli settlement freeze has widespread international support. Major European allies are critical of Netanyahu over his choice of coalition partners and for continuing to build in the settlements. The United Nations Security Council censure over settlements was avoided only when the United States used its veto power. The Israeli public also want to see a diplomatic process, even if they are sceptical of the Palestinian commitment to that process. Netanyahu’s domestic popularity is declining. His relationship with President Shimon Peres, once close, is now cool. Too few of Netanyahu’s international interlocutors accept his reminders that it is the Palestinians who refuse to come to the table. Something, Netanyahu appears to be thinking, has to change.

On the other hand, the Palestinian attempts to bypass negotiations seem to be bearing fruit. Visiting London this week, President Abbas collected another endorsement for unilateralism, with the upgrade of the Palestinian representative office in Britain to the status of a diplomatic mission.

With a negotiated deal by September apparently out of reach, there is growing pressure from Britain, France and Germany for the US and the Quartet to lay out the parameters for a deal. Hague stated that these should be a Palestinian state based on ‘1967 borders with equivalent land swaps, appropriate security arrangements for Israelis and Palestinians, a just, fair and agreed solution for refugees and Jerusalem as the capital of both states.’ Looming in the distance, the Palestinians expect to receive majority support for recognition of Palestinian independence within the 1967 borders when the United Nations’ General Assembly convenes in September. 

What next?

In formulating a future strategy, Netanyahu needs to find a formula that will provide him international diplomatic leeway, without bringing down his coalition. Internationally, Israel’s efforts are concentrated almost solely on dialogue with Washington. The American reaction will be the decisive factor of Netanyahu’s plan and the Israeli PM will not want to put his leadership on the line without feeling confident that the US will endorse his policy.

However, Netanyahu is wary that a diplomatic initiative could potentially trigger a coalition crisis. Several ministers from the left-wing of the Likud, including Dan Meridor and Michael Eitan, are already on record as supporting a new strategy of phased progress and others may follow. However, Netanyahu’s primary concern is that an announcement of a policy shift would provide an alibi for a right-wing revolt. The leader of Netanyahu’s largest coalition partner, the hawkish foreign minister Avigdor Lieberman, may seize the moment to leave the government in order to position himself as a right-wing leadership alternative to Netanyahu.

The Americans defended their veto at the UN Security Council last month by arguing that unilateral steps are unhelpful, and that the only way forward it through negotiations. Netanyahu will have to convince the administration that an interim Israeli offer is not a substitute to a final status framework, but a way of moving towards it, by enticing the Palestinians back into negotiations.

Following their success in garnering international support, the Palestinians are likely to respond coolly to any Israeli offer. As long as their diplomatic success continues, there is no reason for the Palestinians to re-enter negotiations. Furthermore, the current regional climate is unlikely to generate Arab pressure on the Palestinian leadership. Last September, immense Egyptian pressure and an Arab League statement supporting a return to talks, despite Palestinian hesitation, were key to the renewal of direct Israeli-Palestinian negotiations. The Palestinian leadership fears that any concessions will open it to harsh domestic criticism. Sources in Ramallah report that the PA leadership felt empowered by their refusal to agree to the US request to withdraw the resolution on settlements from the UN Security Council.

Given the likely Palestinian rejection of any new Israeli initiative, the role of the international community, in particular the Europeans, in steering the Palestinians back to negotiations is ever more important.


There are powerful arguments for a course correction in Israeli policy. Israelis are deeply uncomfortable with the ever more vocal criticism of their government. Given the delicacy of Netanyahu’s domestic political position, formulating policy over the coming weeks Netanyahu faces perhaps the defining moment of his political career. Success for Netanyahu will be finding the middle ground that has US support, but does not give his right-wing coalition partners reason to leave the government.

As for whether a new Israeli proposal brings momentum back to the peace process, much will depend on the reaction in Europe. Europe’s sensitivity to stalls in the peace process is heightened by the current unrest in the region. But if the goal is a return to talks, then pressure must be put on the Palestinians to move forward, not just Israelis. Quartet parameters and unilateral measures by the Palestinians will not substitute for an agreement between the parties.