BICOM

Key Points

• Settlements have always been a thorn in Israel’s relations with its international partners. Palestinian leaders have increasingly cited settlements as the biggest source of mistrust among their public. The focus on this issue is exacerbated at the present time by Prime Minister Netanyahu’s reluctance to commit explicitly to a two state solution, a formula which has the consensus of international opinion behind it.
• Obama believes addressing this issue is an important thing to do in its own right, but due to moderate Arab states’ fear of Iran, Obama sees a particular opportunity in the current climate to refloat the Arab Peace Initiative with greater incentive for all sides to make the necessary commitments. Obama’s approach is to get all the parties in the region to play their part by sequencing a series of positive steps, including diplomatic concessions to Israel from Arab states in return for Israel acting on settlements.
• Most Israelis understand that a future peace deal will mean that some proportion of the West Bank settlements will have to be removed, but expect some will stay part of Israel. The idea of a land swap was accepted in previous rounds of negotiations and in the unofficial Geneva Accords. But now the US is looking for Israel to show its sincerity by removing outposts and freezing all building, including ‘natural growth’. Netanyahu’s actions following his meeting with Obama demonstrate that he understands the need to act in some way.
• Three factors will determine how the process develops: how hard Obama will push Israel for a complete freeze including natural growth; how far Netanyahu is willing and able to go on this very challenging internal political issue; and whether the Arabs are really ready to reciprocate.

Introduction

The issue of settlements formed an important topic of discussion in the meeting between Israeli Prime Minister Benjamin Netanyahu and US President Barack Obama in Washington. On Iran the two leaders were able to articulate a broad consensus. On the issue of the ‘two state solution’ Netanyahu’s reluctance to talk explicitly about Palestinian statehood has made the political significance of saying the words perhaps greater that it really needs to be, given that he has already accepted previous agreements including the Roadmap. For now President Obama seems ready to overlook the issue of the ‘political horizon’ if Netanyahu makes significant steps on the ground.

At the present time therefore, finding consensus over settlements is emerging as the toughest difference to overcome. Whilst differences between Israel and the US on this issue are nothing new, under Obama the problem is taking a more prominent role because of the importance of advancing the Israeli-Palestinian issue in his broad based approach to the region. There are a number of separate but linked elements contained under the generic heading of the settlements issue. This document will seek to explain these elements, the likely future direction of events in this area, and the implications for US-Israel relations. 

The roots of the settlements issue

Following the capture of the West Bank and Gaza Strip by Israel in June 1967, Israel permitted limited civilian settlement in the territories. Some of the settlements established after 1967 were on the site of Jewish communities which existed prior to Israel’s War of Independence in 1948, such as the Etzion bloc, the Jewish settlement in Hebron, Kfar Darom in Gaza and communities in the northern Dead Sea area. Given the vulnerability of Israel’s borders, Israeli leaders felt that strategically located settlements were important for the country’s security, but under both left and right wing governments, settlements were allowed to develop without strict controls.

According to the Central Bureau of Statistics, approximately 290,000 Israelis currently live in 120 official settlements and in additional illegal outposts in the West Bank.[i] The outposts are points of settlement established by settlers without any coordination with the Israeli authorities. There are thought to be around 100 such outposts dotted around the West Bank. Around 190,000 Israelis live in East Jerusalem. Unlike the rest of the West Bank, Israel annexed East Jerusalem and reunified the city as its capital after 1967. As such Israel does not consider the Jewish neighbourhoods of East Jerusalem settlements. The US, Britain and most the rest of international community do not accept Israel’s position on East Jerusalem. Nearly 80% of what the international community defines as settlers live in East Jerusalem or in communities located very close to pre-1967 Israel.

The legality of the settlements is disputed. The United Nations considers that the settlements represent a violation of Article 49 of the Fourth Geneva Convention, according to which an occupying power is forbidden from ‘transferring’ part of its population into occupied territory. Israel maintains that this clause was intended to prevent the forced transfer of populations, and has no relevance to the situation on the West Bank, the status of which is in any case disputed following the Arab rejection of the 1947 UN partition plan and the 1948 War.[ii] Most states, including Britain, consider all the settlements to be unlawful.

The US Department of State concurs with the Israeli position that Article 49 is not relevant to Jewish settlement activity in the West Bank. However, Washington has consistently opposed settlement construction on political grounds, arguing that settlement building is seen by Palestinians as intended to render their future sovereignty in the West Bank impossible, and is therefore detrimental to the peace process.    

The largest West Bank settlement communities close to the Green Line – such as Elkana, Gush Etzion, Maaleh Adumim and Betar – can be connected to Israel proper without taking in Palestinian population centres. As such, Israel hopes to retain these areas in the context of an eventual peace agreement with the Palestinians. Both Israeli and Palestinian negotiators accepted the principle of land swaps in previous rounds of negotiations under the auspices of President Clinton, and in the Geneva accords. Proposals for Jerusalem whereby Jewish neighbourhoods would stay part of Israel and Arab neighbourhoods would become part of a Palestinian state were also outlined in previous negotiations. There are some, including some British officials, who fear the settlements may have already developed beyond the point at which they can be removed in the context of a solution. Though it should be recalled that all settlements in Gaza, as well as four small settlements in the northern West Bank were dismantled in the course of the disengagement in 2005.

The Oslo Accords and the Interim Agreement of 1995 consider settlements to be an issue to be resolved in final status negotiations. The Road Map of 2003 calls for a freeze on settlement expansion and removal of illegal outposts in Phase I. Phase I also calls for an end to Palestinian violence and incitement as well as the dismantling of terror infrastructures.[iii]

Israeli and American political considerations

Obama’s administration is focusing heavy pressure on settlements in the context of making progress on the Israeli-Palestinian issue for a number of reasons. Obama’s genuine commitment to addressing the issue on its own merits is combined with hardnosed grasp of US interests. In building capital, Obama is trying to leverage concessions from both Israel and the Arab world, at a moment when the threat of Iran creates a shared incentive between Israel and Arab states to do more to advance the peace process. This approach was advocated by Rice towards the end of the previous administration, and has been promoted by David Miliband. The focus on concessions from the Arab world towards Israel also reflects an understanding in Washington of the Palestinians’ weakness.

It is not a case of leaning on Israel in order to win favour in the Arab world. Obama wants to see all parties in the region take real steps to advance the process, and the US aim is to encourage all the parties and to coordinate the sequencing. Making a success of this approach means maintaining trust with all sides, and ensuring that positive steps to advance the process are reciprocated. Understanding Israel as Obama’s administration do, they know they will get much further if they demonstrate appreciation for Israel’s legitimate concerns and interests. They recognise too that the Israeli public need to be shown the benefits of peace.

In the final analysis, Israel knows that Obama will not make his efforts to stop Iran’s nuclear programme contingent on the Israeli-Palestinian peace process. So Obama’s incentive for Israel to deal with settlements is positive, not negative. Obama will hope to prove himself a true friend of Israel by persuading Arab states to take real steps towards normalisation of relations. According to this approach, Israel, the Palestinians, and the wider Arab world will be expected to make reciprocal concessions and to honour commitments. Pressure on Israel to take concrete steps on settlements should be seen in this context, and not in isolation.

The fact that no negotiating process between Israel and the PA is currently underway means that pressure for Israel to show its intentions by taking practical steps on the ground is all the greater. Netanyahu has been trying hard to get a face to face meeting with President Abbas but has been rebuffed. The Palestinians are trying to capitalise on international pressure on Israel by demanding that Israel accept a two state solution and freeze settlement construction as a preconditions for talks. Many analysts see this as a reflection of Abbas’s vulnerability, having little to show for a long process of negotiations with the previous Israeli government.

Netanyahu’s own focus on a bottom up approach to Palestinian development has reinforced a US approach which demands quantifiable steps on the ground. Joe Biden encapsulated the thinking when he told an AIPAC conference in early May, “This is a “show me” deal – not based on faith – show me.” It remains to be seen who is right, the cynics who say Netanyahu’s bottom up approach is a delaying tactic, or those in Netanyahu’s team who are convinced that this Israeli government can and will take significant steps to improve the situation on the ground.

Israel has no intention of establishing entirely new settlements in the West Bank. The issue at stake is that of construction in existing settlements. In the period of the Bush Administration, Israel reached a tacit agreement with Washington, according to which construction in isolated settlements East of the Security Barrier was effectively frozen, while construction on the basis of ‘natural growth’ continued in the large settlement blocs close to the Green Line, which Israel expects to keep in a future final status agreement. The Obama Administration has made clear that this arrangement is no longer acceptable and this is the area where future friction is most likely. The Administration is calling for a complete ‘settlement freeze’ and Secretary of State Hilary Clinton has made clear that this includes a freeze on ‘natural growth’.[iv]

No Israeli government has ever enforced a complete ‘freeze’ on settlements. Israel points out that enforcing a freeze would create difficulties for the communities living in the settlements, which have typically young and growing populations. Even dovish Israeli President Shimon Peres has pointed out the impracticability of a total freeze, stating that “Israel cannot instruct settlers in existing settlements not to have children or get married.”[v] However, there is little sign that the international community has much sympathy for Israel on this.

Many experienced observers believe it would be impossible politically for Prime Minister Netanyahu, who heads a coalition including parties to the right of Likud, to deliver what the Americans are asking for in full. (Though again, it should be recalled that Ariel Sharon managed to withdraw all the settlers from Gaza despite losing the support of much of his own party.) By making a public point of praising Netanyahu’s political skills during their meeting, Obama made it clear that, despite the difficulties, he expects the Israeli Prime Minister to find a way through.

Whether he can or not remains to be seen, but it is clear that as a result of his meeting with Obama, he has internalized the need to move in some way on this issue. In a meeting with Likud faction members last Monday, he said that the security of Israel and the issue of Iran were more important than outposts. This, he said, was why he was ‘willing to take unpopular steps such as evacuating outposts.’[vi]

Netanyahu is on firmer ground domestically in acting against outposts that are illegal even under Israeli law. A delegation headed by minister Dan Meridor that met US officials in London last week is thought to have offered the removal of outposts and perhaps even a continued freeze in outlying settlements, whilst resisting a complete ban on building in settlement blocs Israel expects to retain in a peace deal. The Israeli government may try to defend itself from US criticism on the broader issue of settlements by showing that it is taking action against outposts. One outpost, Maoz Ester, was removed immediately after Netanyahu’s meeting with Obama and 26 others have been slated for removal. Defence Minister Ehud Barak has made clear that he is prepared to use force in order to dismantle outposts, should it prove necessary, and Netanyahu has defended Ehud Barak’s plans to his Likud party colleagues. However the comments from Secretary of State Clinton, made last Wednesday following her meeting with the Egyptian Foreign Secretary, reiterated a tough line that the US want a complete freeze.

Can a balance point be found?

This US administration has been unusual in getting stuck directly into this issue from the very beginning. They have plenty of knowledge of Israeli politics, and some shared history with Netanyahu from the Clinton administration. But Netanyahu’s team, from the Israeli right, do not have a natural rapport with this liberal US administration, meaning they are in unchartered waters. These partisan issues will not affect the underlying nature of the bilateral ties in the long term, but speculation about direction of policy and the state of the relationship will be rife whilst the new political relationships settle down.

President Obama has consistently reiterated that his commitment to Israel’s security is absolute. Obama will also know that whilst the relationship between the US and Israel is not symmetrical, and the US has many ways it can exert pressure on its much weaker ally, the best way to gain Israel’s cooperation is to maintain Israel’s trust. For that reason, close security and defence cooperation between the two states can be expected to continue unabated. But Israel knows ultimately, it is dependent strategically on US support, and must make every effort to avoid strains on the relationship. In recognition of the importance of good relations with the US government, the Netanyahu government will seek to accommodate US wishes. Netanyahu seems ready to respond on the question of outposts, but a complete freeze on building in the settlements and in East Jerusalem is extremely difficult, perhaps even impossible to achieve politically. The previous government of Olmert, Barak and Livni, which was committed to the two state solution and imposed tighter restrictions on building than ever before, did not attempt to impose a complete freeze. If Netanyahu goes too far he could lose his coalition, and send Israel back into a period of paralysis whilst a new government is formed. In the end, Netanyahu may end up talking more openly about the end game of a Palestinian state because it is easier that delivering on US demands over settlements.

It is clear that in general, Netanyahu has no interest in antagonising the Obama administration. A clear sign of this was his decision not to do any foreign media interviews whilst in Washington, or since. But how this issue develops from here will depend of how determined the US is to pressure Israel over its demand for a total freeze, how willing and able Netanyahu is to deliver what the Americans want, and how successfully Obama can extract reciprocal concessions from the Palestinians, and the wider Arab world.

 

 

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[i] Uri Blau, “Secret Israeli database reveals full extent of illegal settlement,” Haaretz, 1/2.  http://www.haaretz.com

[ii] “Israeli settlements and international law,” Ministry of Foreign Affairs, May 2001. http://www.mfa.gov.il

[iii] “Road Map: Full Text,” http://news.bbc.co.uk

[iv] Natasha Mozgova, “Clinton calls on Israel to halt ‘any kind’ of settlement activity,’ Haaretz, 21/5.  http://www.haaretz.com

[v] “Peres to Biden” Can’t stop natural growth,” JTA, 5/5. http://jta.org

[vi] Yana Dlugy, “Netanyahu willing to ‘give up outposts,” AFP, 26/5.  http://news.yahoo.com