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A Palestinian state - a threat to Israel?
- lecture held at 3rd Pugwash Workshop on the Middle East, 10 - 12 December 1993, Tynningo near Stockholm, Sweden.

A Palestinian state, en compassing the West Bank and Gaza, has frequently been characterized as "a pistol held against Israel's heart" or "a cancerous growth in the Near East" based on the argument that it would be impossible to imagine the PLO abandoning its goal of destroying Israel. It has been said that a Palestinian state would only be the first stage in the achievementof this objective, and that any hint of a more conciliatory Palestinian attitude was no more than a tactical ruse. According to this line of reasoning, the references to "a Palestinian state living in peace along side Israel" included in all Swedish government statements of policy on the Middle East must be regarded as an axiomatic impossibility. A return to Israel's 1967 frontiers would greatly increase Israel's military vulnerability and would also increase the risk of war. A Palestinian state would inevitably become a playground for extremists and a base for terrorist actions against Israel. Furthermore,it would not contribute to a solution of the refugee problem.

These arguments have been deliberately put forward and stressed by Israeli governments over the years. Together with the verbal militancy of Arab states and Palestinian terrorism, both in Israel and elsewhere, this has resulted in a situation in which the decisive factors for the future political orientation of a Palestinian state have been neglected or totally forgotten.

The obvious fact that even a Palestinian state will be forced to live in the real political world has been ignored. The future politicial and ideological orientation of a Palestinian state will not be based on militant formulations in political programs and charters, or by statements made by the heads of various factions within the PLO, but instead be charaterized by factors such as the existing political and social realities on the West Bank and in Gaza,the interests of neigbouring Arab countries in a Palestinian mini-state, the inevitable economic dependence of such a state on the conservative oil-rich Arab states (especially Saudi Arabia), the mutual economic dependence which has evolved between the occupied territories and Israel since 1967, the geographical dependence of a Palestinian state on Jordan and Israel for all its imports and exports, Israel's colossal military superiority, and multilateral and bilateral guarantees and demilitarization agreements. Last but not least, the problems and the demographic developments which Israeli democracy will face if the occupation of the West Bank and Gaza continues must be taken into account in any discussion of future worst-case scenarios, even if occupation occurs within the framework for some form of autonomous solution.

The Political Orientation of a Palestinian State As a result of exile, a high level of education, urbanization and geographical and social mobility, there is a high degree of Palestinian awareness and mobilization. Consequently, the discussions of fundamental political questions will no doubt be just as intensive in a Palestinian state as in Israel and, unfortunately, this discussion will probably not be confined to the political sphere. As in Israel, a number of political groups - ranging from Communists, Baathists, Greater-Syrian nationalists, Pan-Arabists to the fundamentalist Muslim Brotherhood - will be competing for political influence. Many of these groups will try to get external political support.

The only more or less safe prediction which can be made about a Palestinian state is that it will have the stamp of the PLO on it, in that both the Palestinian diaspora and the inhabitants of the West Bank and Gaza have supported the PLO almost unanimusly for a very long time, prior to the emergence of the Intifada. However, no conclusion about the future ideology of a Palestinian state can be drawn from this

The PLO is an umbrella organization for a number of disparate political groups in a state of mutual conflict, which are essentially only united by what they have jointly lacked,that is to say a national home. Thus the PLO covers a broad spectrum of political ideas. At same time, however, it is important to emphasize that Fatah clearly plays a dominant role in the PLO, claiming the support of 80-90 % of its members. But, ideologically, Fatah has stayed neutral and refused to associate itself with Nasserism, Baathism, Communism or the conservative camp. Arafat and the majority of the Fatah leaders have dismissed questions regarding the ideological orientation of a Palestinian state as premature, counter-productive and designed to split the organisation. In pursuance of this line, Fatah has not produced any ideological interpretation of its "Palestinian revolution"which is not couched in national, anti-zionist and anti-imperialist terms.

Until the Gulf War, Fatah could obtain physical and economic support from Saudi Arabia,Kuwait,the Gulf Emirates and Egypt by pursuing a policy of neutrality against a background of continuous and recurrent inter-Arab quarrels. And, until 1982, this also applied to support from Libya and Syria. Refusal to become commited to any political ideology and an emphasis on the idea that the political objective of establishing a Palestinian state is a matter of Palestinians themselves have won approval in every camp. This applies particularly to broad Palestinian groups in the diaspora due to the simplicity and clarity of the message - a message which has contrasted with the doctrinal intricacies of the discussion conducted by the radical Marxist-Leninist groups, which the majority of the refugees, with their traditional peasant background and often deep religious sympathies, have instinctively rejected.

Once a Palestinian state has actually been formed and the objective which has held the organisation together has been achieved, the PLO will have more or less lost the justification for its existence, and it may split up and disintegrate. In any case, the range of different ideologies which the various groups in the PLO currently represent might overthrow the existing political and social realities on the West Bank and in Gaza, more or less overnight. Many of those who currently support what are known as "objector groups" may adobt a more realistic and pragmatic approach once a Palestinian state has been established. History points to several examples of how guerilla leaders change their political profile when they assume political responsibility. A state cannot allow itself to act in the same way as an underground organisation. On the other hand, as long as there is no Palestinian state in existence, many consider that they have everything to win and nothing to lose by desperate actions. But once a Palestinian state does exist,the stakes would probably be too high, even for the fanatics. However,we cannot exclude the possibility that independence might lead to "a night of the long knives", in which radical minorities try to neutralize their political opponents and seize power by spectacular deeds, thus immediately setting the existance of the new state at risk.

If the objective of a Palestinian state is achieved, however, even if certain groups may claim that this is only one stage in the process, the overwhelming majority will probably not be prepared to risk losing what has already been gained, since they will be well aware that any independent state would itself have to deal with direct consequences of terrorist actions, in the form of Israeli retaliation. As a result, one the most important tasks for a new Palestinian state would be to keep Palestinian extremism under control. The inhabitants of the occupied territories have a realistic attitude to the existence of Israel and their primary interest would probably be the termination of Israeli occupation.

Palestinians who have established themselves in the diaspora and who do not intend to return, but who, with the creation of a Palestinian state, nonetheless see the possibility of finally acquiring a national passport, a flag and a homeland, will also counteract political tendencies which aim to frustrate what has finally been achieved after so many years. Such Palestinian groups therefore have a common interest in trying to keep the wild men and the maximalists under control. Apart from the fact that the "objectors "are already only a small minority within the PLO, their position is also weakened by mutual rivalries between their leaders and by ideological conflicts, despite all the Marxist phraseology.

As the representative of an independent state, the Palestinian leadership will be obliged to move from political rhetoric to dealing with concrete political problems and realities. The first major question will be how to take care of refugees returning from other countries. Some sort of compulsorry limitations on the size of the population will not be accepted by a future Palestinian government,of course. But there is little doubt that such a government will be compelled to set an annual ceiling on immigration in order to cope with the integration of refugees. As a result a peace treaty must also include provisions which mean that no Arab state can abrubtly force its refugee population to depart for the new Palestinian state. Instead Palestinians must be given the free choice of living within or outside the frontiers of their homeland,once it has been reestablished.

It is impossible even to make an approximate guess as to how many of the more than 3,5 million Palestinian refugees must decide to return. This depends on factors such as the political climate in and around the new state, the compensation which refugees might receive as a result of a peace agreement and the measures which other Arab states take to assist Palestinians who want to remain in their present countries of domicile.Many of the refugees who left Palestine in 1948, and their descendants, will probably choose to stay where they are, even if they have kept their dream of a homeland alive for so many years.

With Palestinian passports, they would be able to live in other Arab states on a basis of equality. This would apply primarily to Palestinians in Jordan, Saudi Arabia and the Gulf Emirates, and also to those who established themselves in the United States and Western Europe. This would give them the national identity which they have been refused for so long, but would still allow them to choose to remain in exile in their Babylonian fleshpots.

Those who return, on the other hand, will probaly largely come from groups which are poorly integrated into their current countries of domicile, that is to say people who are living in refugee camps, and are poor and uneducated. As a result, the existing Palestinian proletariat on the West Bank, and particularly in Gaza, will have new recruits. This, in its turn, will require political and economic measures to ensure that growing social discontent does not disturb the political balance in the new state, providing a base for recruitment for desperate actions. For some time to come, the existing inhabitants of the West Bank and Gaza will probably be in a clear majority in the new state, and are unlikely to be prepared to accept that outsiders take over the leadership, since this would simply mean that newcomers replaced Israel as an occupying power.

Therefore, one of the most difficult questions will undoubtedly be how power is to be allocated between the current leadership on the West Bank - the leading families who have exercised control for centuries - and Palestinian leaders who would come from the outside under a Palestinian "law of return". In addition, economic and political disputes would inevitably occur between the existing inhabitants of the West Bank and those who return from other countries, particularly since there will be an accute shortage of jobs.

Tension between the two "halves" of the nation will probably also be inevitable.Demands will no doubt be made by a heavily overpopulated Gaza to transfer some of the people in the camps to the West Bank. The allocation of financal resources and foreign aid between the two areas will be a further source of conflict, particularly since the economic importance of Gaza will increase, because it would be the only outlet of Palestinian state to the sea.

Thus, the birth pains will be considerable and, in wiev of what has already been said, no definite conclusions can be drawn about the future political orientation of a Palestinian state. There will be many differences of opinion, ranging from advocates of a Western democratic system to various extreme socialist positions.

However, a Palestinian state might also have a number of advantages which other small states have lacked when they achieved independence. One stabilizing factor is the homogeneity of the population. They would all speak Arabic and more than 90% would not only be Moslems but would also share the same Sunni-Islamic faith.

Thanks to UNRWA, the Palestinians have the highest level of education in the Arab world. An administrative structure has been built up over the decades in the camps, and the PLO has been a state within a state, with its own independent bodies in Lebanon. UNRWA's Palestinian personnel thus already constitute an effective administrative apparatus for Palestinian ministries of the interior, health care, social welfare and education. Many Palestinians now have many years of experience of competent administration in other parts of the Arab world, particularly in the Gulf states. As a result, a Palestinian state , unlike so many Third World states, would not have to suffer any shortage of domestic expertise for its governmental administration.

A Palestinian State's Relations with Other Arab States One of the most frequent and possibly most effective Israeli arguments against the establishment of a Palestinian state is that it would be a springboard for a collective Arab attact against Israel, and would thus be "a dagger held against Israel's heart". However, history has shown that none of the Arab frontline states have allowed the PLO to force them into any hazardous undertakings. An independent Palestinian state would be in even less of a position to do so. Unilateral Palestinian provocations, undertaken with the ulterior motive of drawing a united Arab world into a war with Israel, would therefore involve such enormous risk that such ventures would appear to be totally unrealistic.

States which, for ideological reasons, might be expected to encourage Palestinian extremists to undertake actions against Israel and which themselves might continue their militant rhetoric after a settlement has been reached - that is to say Libya, Iraq and Iran - lack the geographic prerequisites to directly influence events. Similary, they cannot force their policies on a Palestinian goverment, and their chances of overthrowing such a goverment are even more remote.

On the other hand, those Arab states which have the best opportunities of exercising direct influence on a Palestinian state also have the most to fear from a new war, or from political instability in the Middle East encouraged by the Palestinians. These states, that is to say Egypt, Jordan and - in view of their oil revenue - especially Saudi Arabia and the Gulf states, are destined to become the principal financal backers of a new Palestinian state. A Palestinian state which is accepted by credible representatives of the Palestinian people in an international conference would give these states a moral pan-Arab fig leaf, and it would also solve a problem in domestic politics. This means that one of the main political tasks of political leaders in these countries will be to ensure that a Palestinian state does not enter into ventures which seriously endanger any agreement which is finally reached.

King Hussein accepted the Rabat Resolution under which the PLO was declared to be the legitimate representative of the Palestinians, but this was in an emergency situation and it is unlikely that he has completely abandoned his hopes or aspirations of somehow reconquering the West Bank. Instead, ussein has bided his time in the hope that developments will play into his hands, in one way or the other. This does not mean, owever, that a peace settlement would directly lead to some form of joint Palestinian-Jordanian state.

Particularly in the view of the need for all the Arab states participating in a settlement to bind the PLO to such a settlement and to give Arab concessions and comprises a Palestinian legitimacy, a more likely scenario would appear to be that an independent Palestinian state is proclaimed which, sooner or later, at least in formal terms, decides on some form of association with Jordan. The Palestinians already constitute more than half the population of Jordan, and this majority would be even greater in a Jordanian-Palestinian federation or confederation. Faced with Israel to the west, with its total military superiority, and in the absence of support for an aggressive policy from the states which it would be financially and politically dependent on, it would instead appear to be rather natural for a Palestinian state to focus any expansive political ambitions on Jordan,thus making it possible to finally settle affairs with King Hussein, after the events of September 1970.

Somewhat dramatically, it might therefore be said that a peace settlements - irrespective of whether it leads to some kind of association with Jordan or not -would mean that the responsibility for keeping radical Palestinian tendencies under control would mainly lie with King Hussein, who does not lack the prerequisites to do this. Jordan would be the Palestinian state's door to the Arab world and, as a result, closing the border at the River Jordan would strangle it. Furthermore, from a military point of view, a Palestinian state can only survive with the acquiescence of both Israel and Jordan. Even if it was a painful task for Jordan, Amman might despatch hundreds of thousands of Palestinians to a West Bank which was already facing considerable problems in absorbing people returning from the refugee camps.

The Syrian perspective on a federation between Jordan and a Palestinian state is rather different. According to the Syrian national myth, from about 200 BC until The First World War, Syria was a geographical concept encompassing the modern states of Syria, Lebanon, Israel and Jordan. Syria is therefore supposed to have a special historical responsibility in the struggle for Palestinian national rights, and this is one of the motives underlying Assad's heavy-handed attempts to get the PLO under his control. For historical reasons, the Palestinian cause is said to be of even more concern to Syria than to the PLO since Syria, particularly in the view of the ruling pan-Arab Baath party, considers that it holds overall political responsibility for the entire region.

According to the official Syrian view, a Palestinian state is nontheless the fundamental component in a solution of the Palestinian question, but Damascus has explicitly opposed all ideas of a Jordanian-Palestinian confederation. Instead, Syria is aiming for a future Palestinian state with some form of guaranteed Syrian influence which, in the long run, might lead to a confederation comprising Lebanon, Jordan and the Palestinian state, and controlled by Damascus.

However, if a comprehensive peace settlement is achieved, Syria's possibilities of preventing the fusion of Jordan and the Palestinian state would be limited. In this case, Syria would also have a considerable self-interest in keeping extremist groups under control, providing that the establishment of a Palestinian state were linked to the termination of Israel's annexation of the Golan Heights. In a situation of this kind, a tacit Israeli-Syrian agreement to keep dangerous Palestinian ventures under control would not be an impossibility, as demonstrated by repeated Syrian interventions against the PLO in Lebanon and the tacid agreement between Jerusalem and Damascus on the bounderies for a Syrian presence south of Beirut.

An Israeli withdrawal from Golan as a result of a simultaneous Syrian-Israeli peace agreement would, in addition, take place gradually, covering a period of at least five years. This would mean that Syria would have a clear national interest in ensuring that a simultaneous gradual Israeli withdrawal from the West Bank was not disrupted by Palestinian extremists.

In the light of this, Syria may find that it is in its own interest to accept a Jordanian-Palestinian confederation or federation and to concentrate its efforts on keeping it out of Cairo's, Riyad's and Baghdad's spheres of interest, in the hope that Syrian national ambitions might be satisfied in the long term by means of friendly relations with a Jordanian-Palestinian state.

If, on the other hand, the Palestinian question is solved without Syrian participation, Damascus will do everything in its power to sabotage the settlement and to make the Palestinian state into a permanent trouble spot.

A Dagger Aimed at Israel's Heart? Seen in this perspective, the idea that a Palestinian state might constitute a deadly threat to Israel, and could distrupt a settlement guaranteed by the great powers and negotiated in a peace conference, would appear to be highly unlikely. Surrounded by Arab neighbours who had decided to swallow the bitter pill and accept the existence of Israel in a peace settlement, a Palestinian state would be extremely vulnerable from a military point of view. Any settlement which involves an Israeli withdrawal from the West Bank will also inevitably be accompanied by demilitarization measures and restrictions on offensive weapons and the number of troops. In addition, comprehensive security guarantees for Israel will be a sine qua non for Israel and America in a peace settlement. Such guarantees can be drawn up in a number of different ways, for example in the form of bilateral or multilateral guarantees within or outside the UN framework, demilitarized zones,international peace-keeping forces and "technological peace-keeping devices" of the type employed in Sinai.

However, a strong government in a Palestinian state can not be established without some form of regular military forces. Firstly, such forces are one of the attributes of independence, without which independence - with all the limitations this will in any case involve - would hardly be acceptable from the Palestinian point of view. Secondly,military contingent forces are required to secure internal security, to keep radical groups under control and ensure that no armed actions are launched against Israel from Palestinian territory. Restrictions could be applied to a Palestinian army,making it in practice a force for maintaining internal order in the Palestinian state, particularly in the transitional phase when Israeli troops are being withdrawn. A Palestinian army could be employed to patrol the Israeli-Palestinian border, prevent fighting between rival Palestinian fractions and stop attempts by Palestinian extremist groups to enter Israeli territory.

Therefore, only a purely symbolic number of soldiers should be allowed access to offensive weapons, but the army should be supplied with defensive weapons in sufficient quantities to perform the tasks which I have described. Palestinian military forces with duties of this kind would be a security guarantee for Israel.

If a Palestinian state is excessively fenced in by such restrictions, this would only serve the interest of forces which are irreconcilably opposed to Israel. The greater credibility a Palestinian state has in the eyes of the Palestinians themselves, the less irredentism there will be and the greater its chances of survival. Furthermore, the military odds against a Palestinian state are so overwhelming that any act of provocation would have to be regarded as a national suicide attempt. Gaza and the West Bank are separated by Israeli territory whose width varies from 32 to 55 kilometres. The Gaza Strip is between 8 and 15 kilometres wide, and a little less than 50 kilometres long. Activities in the strip are fully visible both from land and sea. Gaza has no early warning against air attacts and every square metre of its territory is accesible on foot from Israel in less than an hour and, with military vehicles, within a few minutes. The West Bank extends for almost 140 km from north to south, with a maximum width of 65 km and a minimum of about 30 km, at Jerusalem. No point on the West Bank is within more than 40 kilometre's radius from the nearest Israeli frontier post, and most parts of the territory lie within 30 kilometrs. There are a no natural obstacles such as woods, etc. and Israeli military vehicles can reach any part of the West Bank in less than an hour. Foot soldiers only require a maximum of six hours to reach the most remote areas. Thus, like Gaza, the West Bank has no early warning posibilities for air attacks and the entire area can be observed from Israeli airspace with the naked eye.

This does not mean, however, that the risk of terrorist actions directed against Israel and based on the West Bank and Gaza would be totaly eliminated, particularly if the borders are relatively open. But, as I have already mentioned, if a Palestinian state is established, it would have to accept the consequences of the Israeli retaliatory actions which would inevitably ensue, without being able to count on any support from its Arab friends. Apart from undertaking attacks directed against targets on the West Bank, Israel would, for example, also be able to cut off communications between the West Bank and Gaza, or perhaps reoccupy Gaza within ten minutes.

An Israeli withdrawal from the West Bank and Gaza would probably not take place immediately after a peace agreement was signed, but would instead be implemented over a period of five or ten years, during which the Israeli forces would be withdrawn in stages to specifically agreed security zones.

As a result, a Palestinian state would be subject to Israel's goodwill. Israel would not only be able to take tough action to deal with Palestinian provocations, commited with or without the acquiescence of a Palestinian government, but could, for example, cause mass unemployment and social unrest by closing off the frontier overnight.

It might be objected that a coup d'etat in Egypt, Syria, Jordan and Saudi Arabia might change the prerequisities for peaceful developments in the Middle East from one day to the next and that therefore Israel's frontiers can only be secured by Israeli control of the Golan Heights, Gaza and the West Bank. Naturally the possibility of new, extremist regimes in neigbouring Arab states cannot be excluded, and the same applies to the possibility that a radicalized Arab world might then try to exploit a Palestinian state as a spearhead directed against Israel.

Developments as this kind might be precluded if a peace treaty also included agreements regarding frontier monitoring under the auspices of the United Nations to prevent terrorist infiltration and arms smuggling, for example as regards border crossing into Jordan. Troop limitation agreements like those employed in the Egyptian - Israeli peace agreement might also be applied to the areas immediately to the east of River Jordan.

The combined military potential of the Arab states is one thing, but the chances of uniting the Arab countries in a joint military effort are quite another matter. The cumulative problems which would have to be solved prior to any attempt to undertake joint Arab military action would appear to be insurmountable: historical and political rivalry, mutual suspicion and differing national and political priorities. Furthermore, as a result of its highly developed reconnaissance technology and its efficient intelligence services, Israel would not need to run the risk of facing an attack along its frontiers with the Palestinian state, that is to say in practice along the 1967 border. If sizeable forces were to be assembled in Jordan, this would almost certainly be regarded as a causus belli. Having learnt its lesson in the Yom Kippur War in 1973, the Israeli army would rapidly advance to take control of the Palestinian heights above the Jordan Valley and, if required, would make a preventive strike, taking hostilities into Jordanian or Syrian territory.

Mutual Economic Dependence - a Factor for Peace Economic developments since 1967 have made the occupied territories and Israel economically dependent on each other to an extent which can not be ignored in a future negotiated settlement. The various sectors of the economies of the occupied territories and the corresponding sectors in Israel are now mutually dependent on each other. An increasing proportion of agricultural production has been geared to the Israeli market and the limited exports of industrial products are mostly aimed at the Arab population in Israel. The West Bank's small number of factories are sub-contractors to Israeli industry, for the most part . Roughly two thirds of the "exports" from the occupied territories go to Israel, which is responsible for almost 90% of their "imports" compared with only 1,5% fron Jordan. Today, the West Bank and Gaza are Israel's second largest export market after the United States, and thus the occupied territories are of considerable importance for major areas of the Israeli economy.

In addition, if it is to maintain communications between its two halves, a Palestinian state would be dependent on transportation routes accross Israeli territory. This also applies to a high proportion of the exports and imports of a Palestinian state, even if there is still the possibility of utilizing a circuitous route via Aqaba in Jordan. Furthermore, the water and electricity requirements of a Palestinian state and, initially, its food supplies can only be secured in close cooperation with Israel. Arab assistance to a Palestinian state, however generous, can not liberate the West Bank and Gaza from this economic dependence overnight, and indeed this is not an aspiration espoused by the inhabitants of the occupied territories. Thus, it may be said that there are solid foundations for future economic cooperation across open frontiers between a Palestinian state and Israel which, in its turn may establish a permanent basis for peaceful coexistence rooted in economic pragmatism and mutual benefit, in which both states have a direct interest in the welfare of their neigbour.

Israel's acute shortage of water - it currently takes 30% of its groundwater from wells of West Bank - almost makes cooperation and mutual consideration a matter of necessity. The desalination of seawater, the exploitation of mineral resources in the Dead Sea, united efforts to preserve its current water level and the joint development of the Eilat and Aqaba harbour facilities on the Red Sea are further possible projects for cooperation between Jordan, Israel and a Palestinian state.

The former Israeli Foreign Minister, Mr. Abba Eban, has referred to a de facto coalition between Jordan, the West Bank and Israel, and he has cited the Benelux countries as an example to be emulated. One way to achieve this objective would be open frontiers which, if the sensitive question of Palestinian economic vulnerability were taken into account, might result in the industrialization of the West Bank and Gaza with the help of public and private Israeli and Arab investment, Palestinian private sector investment, and an open market in the Arab world for Israeli goods and vise-versa. It could also mean cooperation in the tourist sector, in which the future status of Jerusalem would obviously be a major factor.

Jerusalem It is not possible to imagine the formation of a Palestinian state without Jerusalem. The area annexed by Israel is the largest unit on the West Bank, and Jerusalem is the link between Nablus to the north and Hebron in the south. In addition, many members of the Palestinian academic, political and social establishment come from Jerusalem, which is where the most important social and political institutions and the Palestinian daily press are located. Furthermore, Jerusalem is not merely a Palestinian concern - it also has a crucial religious status for other Arabs, and is thus politically significant. As a result, Eastern Jerusalem is the natural capital for a Palestinian state.

If the Palestinians accepted a solution which excluded Jerusalem, the result would be that they would be cold-shouldered in every Arab and Islamic context. This would have serious consequences for the new state, particularly for assistance provided by countries with extensive oil revenues, which would instead use their resources to overturn an Israeli-Palestinian agreement.

The UN Security Council's requirement that Israel should withdraw from the occupied territories, stipulated in Resolution 242, must also apply to Jerusalem. A number of proposals for possible solutions have been presented in this context, but it would take too long to discuss them in detail. If it is to be politically acceptable, however, a peace agreement must mean that Jerusalem will become the future capital of both Israel and of a Palestinian state, and that all parties will have free and unrestricted access to the sites designated by their religions as holy places. These holy places could be given international status and placed under Palestinian and Israel surveillance, leaving the Arab sectors of Jerusalem under Palestinian administration and the Jewish districts to Israel.

The Settlements - a Military Advantage or a Negotiating Card? On the Syrian front in the 1973 war, it proved that the Israeli settlements were an obstacle to an Israeli counter-offensive, rather than an advantage from a security point of view. The Israeli forces had to rush to their defence, creating additional problems for the Israeli advance and for the evacuation of civilians. If a new war broke out, similar defensive measures would be required to protect Israeli settlements in densely populated Arab areas on the West Bank.

If the settlements were allowed to remain in place, they would be a permanent potential target for terrorist attacks and would thus undermine the authority of a Palestinian state and the very basis for a peace agreement. Furthermore, as long as the Israeli settlements were allowed to continue, refugees from the 1948 era and their descendants would see no reason to abandon their demands to return to what is now Israel. Instead, the settlements would be a continual reminder of the previous occupation and the humilation associated with that era. They would thus be an obstacle to normal coexistance between the two states, in what used to be Palestine.

One of the most important problems, but also one of the most difficult, will be the question of compensation. If claims can not be regulated in a generous manner, they will be like a cancerous growth, poisoning relations between Israel and the Palestinian state and providing implacable Palestinian groups with political ammunition. A generous and flexible interpretation of the right to compensation might reduce politial tension, however, and would also facilitate the efforts of a Palestinian government to integrate refugees who return.

The Israeli settlements might thus contribute to peace instead of being, as was originally claimed, a security element in a new war. If Israel handed the settlements over to the Palestinian state, Palestinian demands for the right to return to Israel and for compensation for confiscated Arab property would lose their political weight. Furthermore, the evacuated settlements and the confiscated land on the West Bank might be offered to returning refugees from the camps in Lebanon, Syria and Jordan, as a political gesture. In view of the infrastructure which is already in place in the settlements, they would then facilitate the problem of integrating the refugees, even if a single gesture of this kind could hardly be expected to solve everything.

At the same time, the Palestinian government should declare that it considered that Israel had fulfilled the General Assembly's Resolution of 1949 regarding compensation to refugees (Resolution of 194 (III) ) . And the Israelis should declare that Arab assets constituted compensation for the property which Jews had to leave behind them without compensation when they left the Arab world after 1948, and both parties should declare that they no longer had any compensation claims vis - a- vis the other party. This would turn the settlements into a key Israeli negotiating card in a peace settlement.

Continued Occupation - the Real Threat to Israel One risk factor from the Israel point of view is the way in which the Arab inhabitants of Israel itself will react if a Palestinian state is established on the West Bank and in Gaza. Will such a state become a magnet, leading to demands that areas in Israel where Arabs are heavily concentrated - for example in the Galilee "triangle" - should become part of the Palestinian state? According to the 1947 UN plan for allocation of territory, this area and others where the Arab population is in the majority belong to the Arab state in Palestine. Today, the Arab population in Israel itself represents about 17% of the total number of inhabitants. As a result, the risk of a breakaway must be regarded as a political reality. From an Israel point of view, this must be regarded as one of the most serious aspects of the formation of a Palestinian state. However, these risks must weighed against the consequences of continued Israeli sovereignty over the West Bank and Gaza. If there is no peace settlement, tension between Jews and Arabs will grow inside Israel, especially since the Arabs are already second-class citizens with a number of restrictions on their democratic rights. As a result the situation may become so explosive that the risks involved in the formation of a Palestinian state as regards the loyalties of the Arab inhabitants of Israel would appear to be easier to handle.

One solution would be to require some sort of declaration of loyalty from the Israeli-Arabs and allow them to choose, for example, between Palestinian and Israeli citizenship.Those who chose the first option could stay in Israel if they wished, but they would lose the civic rights which they currently enjoy, for example the right to vote.

As I have already indicated, claims that a Palestinian state, per se, would be a military threat to Israel are patently not based on sound arguments. Another argument which is constantly heard is that a Palestinian state would be a playground for terrorists and a base for actions against Israel, but, as I have pointed out, the Palestinian state's instinct for self-preservation will mean that every effort is made to keep Palestinian terrorists under control. It is unlikely that attacts can be totally avoided, however.

Continued occupation is the major threat faced by Israel. Attacts directed against Jews have been intensified under the Intifada, and they have become more brutal, claiming more Jewish lives. What is more, they have been commited by the inhabitants of the occupied territories. This antagonism seems to be increasingly reminiscent of the period prior to 1948, when there was civil strife between the Jewish and Arab inhabitants of the former British mandate of Palestine, and the Palestinians' Arab neigbours were passive bystanders. No matter how benevolent continued occupation might be and no matter what form of autonomy were to be granted, it is impossible to imagine that the inhabitants of the occupied territories will accept a future under some form of Israeli sovereignty and control. The inevitable consequence of continued Israeli control in some form of Arab area would be the evaporation of the understanding and moral support which Israel can still count on in the Western world. The fact that the atrocities of the Nazi epoch are increasingly remote and are rapidly becoming history will also contribute to this tendency. In terms of international opinion, the "right of the underdog" and sympaty for the injured party will instead increasingly be transferred to the Palestinians. This means that Israel's international isolation will continue to increase.

Israel has now developed into a democracy in which the civic rights of its inhabitants can be placed in four categories: Jews in Israel proper, with rights and obligations which characterize a democratic society; Arabs in Israel, who are entitled to vote in general elections but those rights are restricted in a number of spheres (under Israeli law, for example, less than 10% of the land can be transferred to Arabs); settlers on the West Bank, who have plenty of rights but no obligations; and finally Palestinians on the West Bank and in Gaza, who have no legal rights, but are the subject to emergency powers taken over by Israel from the British mandate authorities and which the Jews once characterized as worse than those of Nazi Germany when these powers were applied to Jews, prior to the division of Palestine.

The incorporation of the West Bank and Gaza, whether this takes the form of incorporation with Israel as a result of legistation as in the case of Golan and East Jerusalem or is a de facto contination of the current policy of occupation, will therefore present Israel with two equally challenging dilemmas. The Palestinians will either have to be excluded from the political system, thus causing Israel to totally lose its democratic character, or they will have to be given full political and democratic rights.The Zionist dream of a state in which Jews could live a normal life as a nation would be definitely smashed to smithereens.

For historical reasons, Israel's suspicions of fundamental Arab intentions are easy to understand, as is the deep-seated conviction that only the Jews themselves can be responsible for their own security. However, political recognition of Israel's frontiers is the only way to make them secure. Hence, an internationally guaranteed resolutionof the Palestine problem, involving the establishment of a Palestinian state on the West Bank and in Gaza, would not only guarantee Israel's continued status as a Jewish country and the survival of the Jewish state as a democracy, but it would also be the best way of serving Israel's security policy interests.

The establishment of a Palestinian state would not provide an absolute security guarantee - no state enjoys such favours - but all the alternative options involve much more serious and much greater risks for Israel's continued existence.

Ingmar Karlsson

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