Dear Friends,
The appointment of a new Prime Minister this month marks a major ideological shift in Israel's leadership, even if only temporarily, giving a positive boost to the Index despite a pessimistic Palestinian outlook. The PA is increasingly concerned that the peace process will be marginalized on President Biden's upcoming visit, with the focus on potential Israel-Saudi developments. Meanwhile, settlement expansion and violence continue as Israel attempts to erode Palestinian nationalism by targeting the flag.
The Two State Index jumped 2.1% in June (up 0.11 points from 5.52 to 5.63). Click on the headlines below for our analysis on developments this month impacted the feasibility of the two-state solution.
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Despite Public Support for Two-State Solution, Lapid Unlikely to Take Significant Steps Towards Peace as Interim PM
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PA Fears Biden Visit Will Sideline Palestinian Issue, With Diplomatic Upgrade Consolation for US Consulate
Ahead of President Joe Biden’s visit to the region next month, the US upgraded its mission to the Palestinians renaming the "Palestinian Affairs Unit" (PAU) as the "U.S. Office of Palestinian Affairs" (OPA). The re-brand also came with an upgrade in diplomatic chain of command, with the new OPA dealing directly with the State Department in Washington as opposed to first going through the US Ambassador to Israel.
The move continues to fall short, however, of Palestinian demands for the US to re-open its consulate in Jerusalem. The gesture signals that the Biden administration may not be able to make good on its pledge, despite the State Department reiterating on multiple occasions this month that it remains committed to reopening the Consulate.
“The Palestinian leadership is not happy with the American approach to the peace process nor the bi-lateral relationship between the US and Palestine. The US has ranked the Palestinian issue very low on President Biden’s agenda during the visit, as evidenced by the Palestinians’ exclusion from any multi-lateral regional dialogue and the failure to re-open the consulate,” analyst Mohammed Daragmeh says.
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![Consulate](https://www.publicators.com/app/images/1608/June2022/Consulate.JPG)
Ahead of Biden’s July 13-16 visit, US Assistant Secretary of State for Near East Affairs Barbara Leaf and her deputy for Israeli-Palestinian Affairs Hady Amr shuttled between Israel and the PA, meeting with officials on both sides. Abbas told the US diplomats that he expected Israel and the US to present some kind of a political horizon for the Palestinians, and reiterated demands that Israel halt all unilateral actions.
The US indeed asked Israel to avoid actions that could stir tensions ahead of the visit – but the request likely had little connection to the Palestinians’ demands and more to do with concerns over violence and provocative actions or statements, in light of the diplomatic crisis ignited by Israel’s announcement of new settlements during Biden’s 2010 visit to the region as Vice President.
In addition to its implications for US-Israel, US-Palestinian, and Israeli-Palestinian relations, Lapid this month hinted that “small advances in relations” between Israel and Saudi Arabia could be expected during Biden’s visit, including the possible establishment of a regional defense alliance consisting of several Arab countries, Gulf emirates and Israel and limited bilateral gestures. Meanwhile, senior diplomats from Israel, Bahrain, the UAE, Egypt, Morocco, and the US held the first meeting of the Negev Summit Steering Committee this month, in another signal of advancing regional cooperation.
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EU Approval of $224 Million in Long-Delayed Funding Gives Boost to Palestinian Authority
The EU this month voted to release $224 million in funding to bolster the Palestinian Authority, after withholding the funds for months amid a dispute in Brussels over whether to condition the aid on alleged incitement in PA curriculums. While the results of the EU vote have not yet been made public, the PA said that the funds were ultimately released with no contingencies. The funding agreement was signed by PA Minister of Finance Shukri Bishara and EU Representative Sven Kuhn von Bergsdorff during an official ceremony at the presidential headquarters in Ramallah, in the presence of President Mahmoud Abbas, PM Mohammad Shtayyeh and ambassadors and representatives of several EU countries.
The decision to release the funding came as EU Commission President Ursula von der Leyen embarked on a three-day visit to the region. Italian PM Mario Draghi and German Vice Chancellor Robert Habeck also visited the region this month, holding meetings with senior Israeli and Palestinian officials, while French President Emmanuel Macron spoke by phone with President Abbas expressing his concern over a recent surge in violence and expressing his “availability” to help broker a “lasting peace” in the region.
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Recent diplomatic engagement came as the UN Human Rights Commission of Inquiry (COI) into May 2021 violence blamed Israel’s “perpetual occupation” as the "underlying root cause" of recurrent tensions, instability and protracted conflict, and charged that Israel “has no intention of ending the occupation". Israel slammed the report as heavily biased and accused commission members of ignoring Palestinian violence, incitement and antisemitism.
The US also reiterated its opposition to the "open-ended and vaguely defined nature" of the COI, along with 22 other nations whose opposition to the report will be counted when it moves to the UNGA in September. On the heels of the report’s publication, the COI announced that it will also eventually investigate whether Israel committed acts of apartheid against Palestinians, as the PA, South Africa, and Namibia push to reconvene the UN Special Committee Against Apartheid to probe the issue.
These developments raise the TSI’s “International Decisions & Norms” parameter from 7 to 8 this month, as the international community inches closer towards greater accountability for Israel’s policies of occupation with potentially significant consequences for Israel. The EU decision to release financial support to bolster the EU also leads to a rise in the “Integrity of Palestinian Governance” parameter from 2 to 3, taken together with the US to re-upgrade diplomatic times at a particularly vulnerable time for the PA.
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Abbas Succession Battle Heats Up As Fatah, Hamas Jockey for West Bank Political Support
PA President Mahmoud Abbas this month controversially announced the appointment of close aide Hussein al-Sheikh as secretary-general of the Executive Committee of the PLO, effectively placing him within reach of the presidency, as rumors of Abbas’ deteriorating health fueled debate over who should succeed the 87-year-old leader. Analysts suggested that media reports of Abbas’ deteriorating health were meant to sow discord within Fatah’s ranks over al-Sheikh’s un-democratic appointment.
“Some apparently wanted to remind the Palestinian people that their President is indeed aging, and that the process of replacing him is pressing. The succession battle reflects deep divisions on the Palestinian political front. From one side, the ruling Fatah party has not agreed on the next-in-line to lead the PA. And on the other side, Hamas preparing for succession in its own way,” says analyst Mohammed Daragmeh.
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![Abbas](https://www.publicators.com/app/images/1608/June2022/Abbas.JPG)
Hamas, which continues to build and strengthen a power base in the West Bank and East Jerusalem at Fatah’s expense, has warned that it will not recognize any newly-appointed PA or PLO leader that has not been elected through a general vote and would promote an alternative political leadership if elections are not held in the post-Abbas era. Hamas’s victory in student council elections at Birzeit University, and before that at Bethlehem University, have also stirred outrage within Fatah's ranks. The defeat signals a further erosion of Fatah’s political influence in the West Bank, especially among young Palestinians who are growing increasingly frustrated with stagnation in the peace process and skyrocketing inflation which have seen bread and oil prices rise by more than 30%.
Results of a poll released by the Palestinian Center or Policy and Survey Research (PSR) reflect a significant change in the domestic balance of power in favor of Hamas and its leadership. Public support for Fatah and Hamas is almost equal (at 35% and 36% respectively), with the gap between them narrowing to one percentage point from six points in March. The poll also showed that 73% of respondents are dissatisfied with Abbas’ performance, with a vast majority of the public (77%) calling for him to resign.
Despite these developments, the TSI’s “Fatah-Hamas relations”, “PLO cohesion” parameters hold steady at 3 this month.
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Settlement Expansion Ahead of Biden Visit Presents Lapid’s First Major Political Challenge:
Israel announced this month that it would convene a Civil Administration subcommittee next month to hear final objections to the construction of 3,412 settlement units in E1. The controversial plan, which would ostensibly prevent Palestinian territorial contiguity from north to south, from Ramallah to Bethlehem, was first approved by former prime minister Benjamin Netanyahu’s government in 2012 and has since been repeatedly delayed as a result of intense international pressure. The planned July 18 hearing is the final opportunity to lodge objections to the plan the Higher Planning Council can approve the plan for validation.
The US asked Israel to postpone the E1 hearing, which is scheduled on the heels of President Biden’s visit to Israel, angering right-wing activists, politicians and settler leaders. Meanwhile, the West Bank settler movement "Nachala" said they had launched a campaign to identify sites for illegal outposts they plan to establish simultaneously next month in a direct challenge to interim PM Yair Lapid. Also this month, Israel announced plans to establish a massive 5,445 acre nature reserve in the West Bank, of which some 1,482 acres are on private Palestinian land.
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Israel Targets Palestinian Nationalism with Bill Outlawing Displays of “Enemy State” Flags
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Other Developments:
- Israel increased the number of work permits for Palestinians in Gaza to 14,000 after temporarily freezing the move in response to Hamas rocket fire. Israel responded by striking, but not destroying, a Hamas post using a helicopter gunship as opposed to a warplane. The decision reflects a cautious deterrence, which has sought to minimize prospects for further escalation and maintain progress on economic confidence building measures. Outgoing PM Bennett has said that under his premiership, the Israel-Gaza border has been the quietest year on record since Israel evacuated the coastal enclave in 2005. The TSI’s “Gaza - Humanitarian & Economic Conditions” rises from 5 to 5.5 this month.
- Ben & Jerry's parent company Unilever struck a deal with the ice cream company's Israeli franchisee American Quality Products (AQP), allowing the brand to continue to be sold in Israeli settlements in the West Bank. The deal comes after a lengthly legal battle, during which multiple US states triggered laws against the Boycott, Divestment and Sanctions (BDS) movement. Israel hailed the deal as a major victory against the boycott movement, while Vermont-based Ben & Jerry's reiterated its position against settlements.
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The Two-State Index (TSI) 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 produced by an Israeli-Palestinian team, and reflects a unique bilateral perspective.
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