A Moment of Reckoning for the Two-State Solution

The Future of the Two-State Solution:

A Moment of Reckoning

In the wake of staggering losses -- the harrowing massacre of Israeli communities in the south that included the cruel murder of 1400 Israelis and kidnapping of hundreds, the extensive bombardment of the Gaza Strip that has left thousands of civilians dead, the magnitude of the burgeoning humanitarian crisis in Gaza, and the acute hostage ordeal -- the weight of the tragedy that has befallen both Israelis and Palestinians has shaken the region and the world. Amid the chaos, pain and despair, it is challenging to envision a path forward through the thick fog of war.

New openings are yet to emerge, but they will. The question is whether opportunities can be seized and crises leveraged to bring about meaningful change and renewed mobilization toward a negotiated political solution. We sit at the precipice of an inflection point for the future of both peoples, and for the two-state solution. The next steps taken by Israel, the international community, the Arab world and the Palestinian Authority, are pivotal in determining the trajectory.

We outline four significant opportunities to be seized that can steer us toward a two-state solution.

Shifting gear from conflict management to conflict resolution.
Stabilizing volatile fronts, strengthening pragmatic actors.
Harnessing and mobilizing renewed international interest.
Revitalizing and reactivating Israeli and Palestinian public sentiment.

As a result of these indicators, which we analyze in more depth below, the Two-State Index increased by 4.3%, rising from 4.99 to 5.21.

Shifting gear from conflict management to conflict resolution

Israel’s conflict management approach not only failed to produce stability but deepened the contours of the conflict. This doctrine, premised on notions of economic “peace”, exacerbating the West Bank-Gaza division, and periodic yet “containable” bouts of violence, collapsed in full view on October 7. In place of management, the situation has been anything but static, marred by a lack of coherent and proactive policy, and a slide toward a one-state reality.

Central to Israel’s conflict management approach has been the misguided notion that through ad hoc, cosmetic economic and civil fixes the conflict can be stabilized, without compromising Israel’s security. For over a decade, Israel’s security doctrine in the Gaza Strip has hinged on a tacit agreement with Hamas, trading material benefits – such as influxes of Qatari cash, permits for workers into Israel, and humanitarian gestures – for periods of relative calm. Hamas, it was understood, would refrain from disrupting this transactional equilibrium for fear of jeopardizing its accrued benefits and ability to govern. The major miscalculation was rooted in a belief that Hamas’ ideological objective of resistance, including the use of terrorist acts against he occupation, came secondary to its aspiration of being a competent governing entity.

Noa Shusterman-Dvir, Director of the Palestinian and Regional Research Program at MIND Israel emphasizes the flaws in this approach: “Over the last two decades Israel lacked a consistent policy in the Palestinian arena and failed to account for the interconnectedness of the spheres. The differentiation between Gaza and the West Bank is an artificial construct that aimed at divide and control, and this double-faceted strategy has proven ineffective. Hamas is driven by its interests in the West Bank and vice-versa.”

Israel's predicament lies in reevaluating a years-long policy that has weakened the imperfect, yet pragmatic governing body next door in the Palestinian Authority, which has consistently combatted terrorism, pursued diplomatic avenues, and steadfastly supported the two-state solution. The only way to correct this profound policy failure is a comprehensive reassessment that opens up new avenues for political engagement, a political horizon and ultimately a resolution.

The TSI's "governance in Gaza" parameter dropped from 4 to 0; and the "humanitarian and economic conditions in Gaza" parameter decreased from 4 to 1.

Stabilizing volatile fronts, strengthening pragmatic actors

The events of October 7 have sharpened the chasms between the forces of extremism who seek a continued multifront escalation, and the necessity of bolstering pragmatic voices. Since the incident, the PA has actively distanced itself from the ISIS label ascribed to Hamas by the Israeli government, stating that Hamas’ actions “do not represent Palestinians.” Despite its precarious situation — caught between showing solidarity with Palestinian resistance and denouncing cruel acts of terror — the authority has remained committed to non-violence and diplomacy, and has been working to contain Palestinian attacks in the West Bank to prevent a multifront escalation. Concurrently, despite the friction between the sides, Israeli-Palestinian security coordination has continued without pause.

The risk of an expansion of the conflict is at a critically-elevated level. The war has emboldened far-right Israeli settlers across the West Bank who are intensifying their attacks against Palestinian civilians (called out by President Biden as “pouring gasoline” on burning fires), alongside Palestinian militants who are launching attacks on Israeli soldiers and policemen. Over 115 Palestinians, some of them civilians, were killed by settlers attacks that we recorded in 62 locations across the West Bank and IDF raids during incursions into Area A. Meanwhile, the precarious financial stability of the PA teeters on the verge of collapse. Bezalel Smotrich, Minister of Finance, an ideological opponent of the PA, proposed halting the transfer of tax revenues Israeli collects on behalf of the PA to the authority (pressure is mounting from the Biden adminstration and some members of Israeli government). The ever-present fragile dynamics at Temple Mount/Haram al-Sharif, especially given the heightened symbolism of “Al Aqsa Flood”, also threaten to ignite a fuse. Collectively, these elements harbor the capacity to inflame the situation beyond Gaza, necessitating ongoing urgent and careful attention.

“Without progress along a political path, extremist forces will only gain momentum. If there is a peace process that supports the moderates, Hamas will undoubtedly mobilize against it, but its influence would wane without the backing of popular support. Hamas thrives on Palestinian disillusionment, Israel’s policies of control in the West Bank and Gaza, and the absence of a political horizon. If you want to corner and contain extremists, you strengthen the moderates. If you want to strengthen the moderates on the Palestinian side, then structural reform of the Palestinian Authority is also needed,” states Ibrahim Dalalsha, Director of Horizon Center for Political Studies based in Ramallah.

As scenario-planning for the “day after” in Gaza progresses in the region and international capitals, much depends on the length, breadth and depth of the war. The end of Hamas governance, or at least its severely castrated ability to use force against Israel, could dismantle a major obstacle on the path toward a two-state solution given their veto-wielding impact and the PA-Hamas split (as long as a well-thought out plan is implemented).

The eventual return of the PA to Gaza, which is not possible under current circumstances, is viewed by most pragmatic local and international stakeholders as the most effective long-term solution for stable governance in the Strip. Fulfilling such an objective would create a direct link between Gaza-West Bank governance, a vital component toward establishing a more unified territorial and political Palestinian entity. However, such a move would likely only follow an interim arrangement based on a third-party framework with international and/or regional support.

Major impediments exist enroute to achieving this goal. Some center on the PA’s structural-domestic challenges relating to governance and institutional reform (and the eventual need for elections), and others are associated with its deteriorating legitimacy tainted by years of Israeli occupation without a meaningful political horizon. Most crucially, the return of the PA to Gaza would only be possible if part of a “comprehensive peaceful vision…within the framework of a two-state solution,” that encompasses the West Bank, as upheld by Prime Minister Shtayyeh. It is in the interests of Israel, the PA and the international community to engage in preparatory measures that can strengthen and reform the PA to address its operational capacity, legitimacy deficiencies and governance capabilities.

This month several of the TSI's “reverse” parameters increased, including the "prospects for war in Gaza" which jumped from 2 to 9; "Palestinian attacks on Israelis from Gaza" from 5 to 10; "IDF military actions in Gaza" from 5 to 9; and the settler violence parameter which increased from 8.5 to 9.

Disclaimer: The rationale behind increasing the parameters relating to violence, and thereby increasing prospects for a two-state solution, is based on an evidence-based assessment that violence unfortunately puts the conflict back on the agenda by eliminating apathy and highlighting the cost of no solution. As a matter of principle, the Geneva Initiative unequivocally condemns and opposes violence that intentionally targets civilians, regardless of political context or goals.

Harnessing and mobilizing renewed international interest

Over the last decade or so, the Israeli-Palestinian conflict has slipped down the agenda of the international community. The illusion of a stable reality accompanied by sporadic bouts of violence that were, for the most part, “containable” produced a misconception that the situation was manageable without need for active intervention. Diplomatic efforts waned, not only due to the emergence of other global challenges but also owing to a sense of stagnation and a dearth of innovative strategies to navigate the seemingly intractable deadlock.

The conflict has been thrust back onto the international stage. While a political resolution remains elusive right now, the period post-October 7 has witnessed a surge in diplomatic activity, with an influx of world leaders visiting the region; the convening of five UN Security Council's discussions and one special session of the UN General Assembly within a mere three weeks (with only the UNGA adopting a resolution calling for a humanitarian truce); a Cairo Peace Summit that convened dozens of world leaders in the same room at a moment’s notice; and the vocal support from various global leaders asserting the urgency of working towards a two-state solution. US President Biden unequivocally stated that reverting to the pre-October 6 status quo is not an option, underscoring the imperative for a clear, forward-looking vision culminating in a two-state solution.

Source: Wall Street Journal

“Before October 7, the US perceived the conflict as stagnant, grappling with a fragile Palestinian Authority, volatile conditions in Gaza, and a hard-line Israeli government, all while navigating numerous other global imperatives. The prevailing attitude was one of disengagement,” remarked Alon Pinkas, Israel’s former Consul General to New York and policy advisor to Israeli leaders. “However, the events of October 7 precipitated a paradigm shift, debunking the myths of Hamas' empowerment and the PA’s weakening as viable strategies, and exposing the untenability of the status quo. The critical question now is whether the U.S. will leverage this moment to transition from passive observation to active diplomatic engagement.”

The US possesses significant leverage and the capacity to shape Israel's actions both during the conflict, and in its aftermath. Amid a vacuum in effective Israeli leadership, the pronounced esteem in which the Israeli populace holds the President — particularly following his deeply resonant expressions of solidarity in a time of turmoil — lends substantial gravitas to his words and deeds in molding Israeli public opinion. Consequently, his continued advocacy for a two-state solution is poised to gain amplified traction and influence, potentially more than ever before.

Pinkas added: “The US has been getting heat for its unbalanced position in support of Israel from domestic US audiences and the Arab world, it will need to offset this and come up with something that can be premised on the foundations of a two-state idea. This won’t happen until there is a different Israeli government.”

At present, the primary focus of the international community effort is centered on crisis management, namely ensuring the delivery of vital humanitarian aid to Gaza, releasing Israeli hostages and reining in the intensity of Israel’s military campaign. Amid the expected months-long slog of a ground invasion, the challenge at-hand will be to maintain global interest and channel it toward resumption of a political solution.

On the eve of October 7, momentum was growing toward a Saudi-Israel normalization deal. Hamas’ motivations, which in part aimed to disrupt such prospects, have partially achieved its goals by putting the process on ice. Many experts expected the Palestinian component of a prospective deal to consist of mainly declaratory, symbolic steps, rather than material changes. In light of the new emerging reality, if and when the Saudis return to the table, the parameters for addressing the Palestinian issue will be fundamentally altered. The critical regional consequences of failing to resolve the Israeli-Palestinian conflict, and the cost of circumventing it, have never been plainerr.

Aziz Alghashian, Saudi researcher and fellow at SEPAD said, “Normalization is not off the table, but the Saudi calculus has certainly changed. Normalization is not possible against the backdrop of an Arab-Israeli war. The Saudis have been continuously warning that without a just solution to the Palestinian question, our region cannot move on. While this was said in the past as a theoretical warning, now the theory has manifested into visible reality. Now Saudi will view the necessity of a solution also through a regional political lens.”

In light of the surge in international attention, all five international-related parameters – "United States (7 to 8), Arab World (7 to 8), Europe (7 to 8), Other countries (7 to 7.5) and public discourse (7 to 8)" – increased this month.

Revitalizing and reactivating Israeli and Palestinian public sentiment

The October 7 events have rattled the foundations of the Israeli public's faith in its security and governing institutions. Mistrust and dehumanization between Israelis and Palestinians are at unparalleled heights, infiltrating media narratives and dominating conversations on social media. National and personal security is the paramount concern for all in the region. Yet shifts are underway that may represent an opportunity.

The trajectory of Israeli politics after the war is shrouded in uncertainty, yet there is a palpable disillusionment with right-wing governance, particularly regarding security and Palestinian relations. The right-wing, having anchored its legitimacy on ensuring citizen and national safety, has proven grossly inadequate. Opinion polls post-October 7 unveil a changing mindset, even among right-wing supporters. An aChord Center survey indicated a shift in public opinion, with support for a center-left government, perceived as better able to safeguard the country, increasing by 8% (from 40% to 48%), when compared to pre- and post- war attitudes; while backing for a right-wing government diminished by 5%. In another poll conducted by Agam Analytics, slightly over half of the Israeli populace view the escalation resulting from neglect of pursuing a political solution. This reflects a willingness to challenge and possibly discard entrenched beliefs that have perpetuated the conflict, especially the notion that the status quo guarantees stability and security.

For the Palestinian public, openings also exist to shape public perceptions. Although recent despair from the prolonged status quo has led to polls showing a growing preference for armed conflict over dialogue, the present escalation demonstrates, in real terms, the steep price of violence and wars, and the urgent need to pursue a path that promotes a political solution.

Muhammad Shehada, a Gazan analyst and writer, captured the complexity of thinking in Gaza, he said: “When the Hamas attacks began, the image of breaking through the siege and taking over IDF military bases was a powerful ‘prison break’ moment. However, once you delve beneath these sentiments there’s more nuance. There is resentment toward Hamas. People are asking why provoke an attack at this moment? What did you aim to get out of it? At the same time, the longer the Israeli strikes and bombing attacks continue, the more it creates a rally around flag approach. It is a very delicate line.”

The Israeli national debate is already taking shape, with a vigorous right-wing campaign underway, attempting to correlate the current turmoil with the perceived failures of the Oslo Accords and the disengagement from Gaza. This approach advocates for a reoccupation of Gaza and a reinforced Israeli presence in the West Bank as the path to unequivocal victory.

In this charged environment, the Israeli opposition and the peace camp have a strategic opportunity to further decouple right-wing governance from security, highlighting the shortcomings, and advocating for political solutions, rather than unilateral decisions or temporary military solutions. Prominent voices are already inadvertently making reference to the security burden of settlements: drawing connections between the disproportionate level of political and economic capital invested by this current government in expanding and reinforcing the settlement enterprise, at the expense of other arenas, including the redeployment of military battalions from the Gaza envelope to the west and abandonment of communities in the south.

The TSI's two public discourse parameters – Israeli and Palestinian – both increased this month, from 6 to 7, and 7 to 8 respectively, underscoring that the conflict including the current painful reality, the diagnosis of how we arrived at this point and potential solutions are much more prominent in the discourse of media, public and public officials.

The Two-State Index (TSI) is part of the Two-State Coalition (TSC) that is brought to you by the Geneva Initiative, a Palestinian-Israeli organization working to promote a negotiated peace agreement in the spirit of the two-state vision. The TSI is part of the Two-State Coalition project, produced by an Israeli-Palestinian team, and reflects a unique bilateral perspective.

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