Escalating tensions and Rising Regional Opportunities

Escalating tensions and Rising Regional Opportunities:

Dear friends,

This month, negotiations on the second stage of the ceasefire deal never materialized and we entered a new and bloody iteration of the status quo, with renewed bombing of Gaza, continued escalation in the West Bank, and halting steps towards continued negotiations. The Trump administration’s support for the most hawkish Israeli positions (sometimes going even further than the Israeli government in threats and deadlines) has encouraged extremist ideologies and policies. The Arab world has countered the Trump plan with the Cairo proposal and united behind the Palestinian Authority, while protests in Gaza highlight the precariousness of Hamas’s position. However, without leverage from the United States, none of that is likely to translate into steps towards a viable political process. Meanwhile, radicals in the Israeli government use the cover of the war and US indifference to expedite facts on the ground in the West Bank. All of this, combined with political and public opinion developments, have created a significant decrease in the TSI.

The TSI drops by 2.7% this month, from 4.91 to 4.78. This is the lowest point of the TSI since the Index was launched in 2018.

The Cairo Plan

This month, Egypt published a proposal for reconstruction, security and political arrangements for post-war Gaza, which was endorsed by all major Arab state actors. The plan was perceived to be a response and alternative to the Trump approach of mass displacement. In addition to detailed plans for investment and rebuilding in the Strip, the plan lays out steps that are “preparations for the full return of the Palestinian National Authority to Gaza,” through a technocrat transitional authority and regional support.

Palestinian analyst Mohammed Daraghmeh, who covered the Arab Emergency Summit in Cairo where the Egyptian proposal was endorsed, notes that “the Egyptian proposal was a compromise that would meet the needs of all involved parties: Israel, the PA, Arab countries and Hamas.”

Daraghmeh explains, “This proposal calls for forging a local administration in Gaza, which Israel has been demanding from day one. In order to make it acceptable to the PA, Egypt linked them to the local administration. Hamas, which can no longer rule Gaza, accepted the proposal because it has no alternative. The Arab countries know that Gaza is a matterof national security to Egypt, so it takes the lead in efforts towards the day after.”

With mixed signals from the American administration (and with the Israeli government in clear opposition) to the Cairo proposal, it is unlikely to make a significant difference in the short term. However, the initiative shown in advancing this proposal by Arab states, and their united opposition to displacement plans, indicates that the two-state solution remains a high priority for key regional stakeholders. European actors have shown a wave of support for the Egyptian-authored plan, with France, Germany, Italy, and the UK immediately welcoming the initiative, followed by new EU High Representative for Foreign Affairs and Diplomacy H.E. Kaja Kallas.

While the United States has in recent years played a more influential role than Europe in policy matters related to the conflict, the unpredictable nature of the Trump administration alongside the tendency towards isolationism of several key cabinet members could conceivably create a vacuum for more reliable actors to fill. France has already indicated willingness and interest in broadening its role, announcing that it will co-chair a conference with Saudi Arabia on the topic of the two-state solution.

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Arab World and Europe parameters remain high at 9.0 this month. The US parameter drops from 7.0 to 4.5.

West Bank De Facto Annexation

In the last three months, Peace Now reports that the pace of the Israeli government’s building approvals for West Bank settlements has eclipsed the number of housing units approved throughout the entirety of 2024. Meanwhile, settler violence in Area C rises unchecked, with reports of combined settler and IDF activities in Masafer Yatta in particular showing the extent to which the situation has deteriorated. The cabinet decided to recognize 13 neighborhoods in the West Bank as settlements in their own right, upending the legal fiction that past building approvals constituted expansion of existing, rather than the creation of new settlements. On March 29th, the cabinet approved the construction of a road network in E1, a sensitive area deemed critical for the preservation of Palestinian territorial contiguity. The roads are designed to allow for unfettered settlement expansion in the region and a possible formal annexation of the Maaleh Adumim area, including E1.

Palestinian analyst for Al-ayyam newspaper Ali Jarbawi asserts that the pace of settlement expansion throws existential doubt on Palestinian’s acceptance of the viability of a two-state solution. “This nonstop wild greedy settlement expansion would force the Palestinians to start thinking of changing the path to the one state solution, as there is no land left for their state.”

The advancement of de facto annexation highlights the coalition government’s assumption, now often voiced in public, that it has a blank check regarding West Bank activity under the Trump Administration. The rollback of sanctions against violent settlers and the lack of a clear US position regarding any of the recent developments in the West Bank seem to confirm this impression. Minister Bezalel Smotrich, who has spearheaded many of the changes in the West Bank and is open about promoting his vision for a greater Israel without equal rights for all, was received in the US this month by Treasury Secretary Scott Bessent. The meeting was another reversal of previous US policy.

At the same time, the Trump administration is keeping certain cards close to its chest, in particular its position regarding the two-state solution. Special Envoy Steve Witkoff stated in an interview with Tucker Carlson that future conversations about Gaza could “involve the word two-state, could not involve the word two-state.” The evasiveness is in line with other Trump administration statements, including National Security Advisor Mike Waltz’s insistence in February that he “certainly didn’t hear the president say it was the end of the two-state solution.” Waltz, in contrast to Witkoff’s comments about Gaza, drew a direct connection between the two-state solution, the West Bank, and the Palestinian Authority.

The Trump administration has announced that the US President’s first trip abroad will be to Saudi Arabia. The prioritization is clear, and could factor into future dramatic changes and policies regarding the war in Gaza, the two-state solution, and the Netanyahu-Trump relationship.

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Due to the ambiguity of its position regarding the two-state solution and tolerance of de facto annexation policies, the United States drops from 7.0 to 4.5 this month. Settlement infrastructure (reverse scale parameter) drops to 1.5.

Palestinian Leadership

In addition to increased settlement expansion and unfettered violence, the Israeli government has also continued a policy of freezing Palestinian Authority funds. The PA has announced that due to the tax revenues Israel continues to withhold, it cannot pay last month’s salaries prior to the Eid, which impacts its reputation, control and capacity within the West Bank. More legislation is currently going through Knesset which would further target PA funds.

The policies to marginalize and weaken the PA undercut the opportunities to replace Hamas presented by recent developments. INSS Senior Researcher Yohanan Tzoreff points out, "The increasing waves of criticism of Hamas in Arab and Palestinianmedia, as well as from rivals, commentators, and conflict researchers in the Arab world, have put the organization on the defensive and deepened internal divisions.” That criticism was translated into on-the-ground protests in Gaza for three consecutive days towards the end of March, with Palestinian protesters calling publicly for Hamas to step down and an end to the war.

Protester holds up a sign: Hamas does not represent us.

Tzoreff shows how the PA now stands aligned with the values and vision of the most influential Arab states, after years of broadening fissures on issues like funding and normalization with Israel. All of these dynamics have opened up a clearer path than before towards replacing Hamas control of Gaza, but steps towards such a move depend on Israeli and US support. As Tzoreff points out, “A key prerequisite for advancing this initiative is Israeli agreement to integrate the Palestinian Authority (or an entity acting on its behalf) into the governing body that will manage Gaza.”

In their Haaretz analysis, Jess Manville and Ibrahim Dalalsheh point out the contradictory nature of Israel’s simultaneous demand that Gazans replace Hamas and opposition to the Palestinian Authority: “Israel's post-war deradicalization agenda hinges on the premise that military and humanitarian pressure will rally Gazans against Hamas. But pressure without a political alternative risks tipping Gaza not toward moderation but toward collapse.”

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No changes in relevant parameters.

Israeli Public Opinion

The hostages in Gaza is the topic overwhelmingly prioritized in Israeli public opinion and discourse, followed closely by the renewal of legislation and steps connected to the judicial overhaul. The continued lack of discourse regarding policy agreements and political processes towards peace have a negative feedback effect on public opinion, as indicated in the TAU Peace Index released this month.

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Israeli public opinion drops from 3.5 to 2.5 this month. Israeli public discourse drops from 4.5 to 3.5.

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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