By Adam Hanieh and Jennifer Thompson
The May 29 election of Likud candidate Benyamin Netanyahu as Israeli prime minister has raised doubts about the future of negotiations between the Israeli state and the Palestine Liberation Organisation. Likud has traditionally been more hostile to any independent Palestinian entity, particularly if it involves returning Israeli-occupied land to Palestinian control. Since the election, Netanyahu has indicated both that the "peace" process will continue and that he doesn't envisage that a Palestinian state will be the result.
Netanyahu also repeated his promise that the final status talks — concerning the status of Palestine, its final borders, Israeli settlements, Palestinian refugees' rights to return, a division of water resources and Jerusalem's status — which began symbolically on May 5, would continue. He told Israel Radio that his preferred outcome would be for the Palestinian autonomous areas to exist alongside "Jewish security and settlement zones" which make up 70% of the West Bank's land. This area encompasses 100 Israeli settlements and 120,000 settlers, so-called state land appropriated from Palestinian farmers since 1967 and areas of "strategic importance" such as the Jordan Valley.
The US administration's response to the conservatives' election win — despite Clinton's overwhelming support for Peres' Labour campaign — was to reaffirm US support for the peace process and warm support for Israel with Likud in government.
Netanyahu's foreign policy adviser telephoned chief Palestinian negotiator Abu Mazen on May 31 to confirm that the negotiations would continue. Even Ehud Olmert, Likud mayor of Jerusalem, whose actions have long been designed to force Palestinians out of Arab East Jerusalem and replace them with Israelis, stepped back from the Likud promise to shut down PLO office in Jerusalem. After Likud warmonger and probable government minister Ariel Sharon told an interviewer on May 31 that the agreement for Israel to withdraw from the West Bank city of Hebron would be "reopened", Netanyahu's office issued a rebuff, stating that he alone would present the government's policies.
But Yasser Arafat's statement that Palestinians would "very soon" declare a state, with Jerusalem as its capital, was rejected by Netanyahu. A Likud statement on June 17 reaffirmed opposition to a Palestinian state, demanded negotiations with Syria without any commitment to return the occupied Golan Heights and vowed to retain exclusive Israeli control over Jerusalem.
Netanyahu is maintaining that there will be no further Israeli military withdrawal from or redeployment in the occupied territories, including the West Bank town of Hebron — which was due for a partial redeployment of Israeli troops on March 28 — southern Lebanon and Syria's Golan Heights.
These statements indicate an intention to go even further than Labour in withdrawing any real concessions to the Palestinians or the Arab countries. The danger for Israel — and its US backer — is that too hardline a stance could disrupt a "peace" process from which Israel was already doing quite well.
The Palestinian Authority called on the new government to honour the agreements signed by the previous government, including continuing the negotiations for a final settlement. But the negotiations process aimed at establishing an independent state in the West Bank and Gaza — just 22% of the original British mandate of Palestine — appears to have reached a brick wall.
Economic stakes
Israel could not have existed without the explicit support of the US following the second world war, and it still receives around $6 billion per year from the US in various forms. Israel represented an opportunity to establish a state that relied completely on the US for its existence and thus would promote the objectives of the United States.
Following the collapse of the USSR, the Cold War competition for regional influence declined and the US moved to consolidate its economic interests in the region. Chief among these are oil reserves. The Middle East holds two-thirds of the world's proven reserves. Many of the Gulf countries have spare capacity — meaning that as the demand for oil increases, so will their share of production.
The key issue to be resolved in any economic liberalisation is the Palestinian-Israeli conflict, including for the 3.5 million Palestinian refugees in the Middle East. This is the principal reason for the enthusiasm shown by the US for the peace process: Israel must be integrated with the economies of the region and a solution found for the Palestinian "problem" if the area is to be opened fully to western capital.
From 1990 onwards, under US pressure and the pressure of the continuing Intifada, Israeli big business and its government representatives in the Knesset were moving towards a settlement with the PLO. The Gulf War decisively changed the balance of forces in the region, as even the nominal Arab front against US imperialism split.
During January 1991, at the height of the shooting war against Iraq, Henry Kissinger began putting forward the post-Gulf War period as the best chance for the US to push its agenda for ending the Arab-Israeli conflict. Supporters of the Palestinian struggle had been calling for an international peace conference on the Middle East for years earlier, and had consistently been opposed by the US and Israel.
In October 1991 the Madrid conference was established. The PLO was not formally admitted, but instead a joint Jordanian/Palestinian delegation took part. There were 10 rounds of negotiations between 1991 and 1993 in which little formal progress was made. Meanwhile, Israeli land confiscation in the occupied territories continued at a rapid rate.
Oslo
In 1992 a Labor government headed by Yitzhak Rabin was elected under the slogan of "Land for peace". This was interpreted by the Israeli public as support for peace negotiations that would involve handing back some of the occupied territories in return for peace agreements with Syria, Jordan and the PLO.
In late January 1993 a series of secret meetings were begun between the Israeli government and the PLO which led to the Oslo Accords. On September 13, 1993, the Declaration of Principles was signed, which formally looked at transferring the West Bank and the Gaza Strip to Palestinian control after a series of "steps" and a five-year interim period. Israeli forces would initially withdraw from the Gaza Strip and the West Bank town of Jericho whilst retaining control over foreign affairs and external security.
At the time, many viewed the declaration with cautious optimism. There were significant steps forward: the recognition of the occupation; the recognition of the PLO; and the small steps towards statehood. However, without the continued mobilisation of the Palestinian people, these small victories did not lead anywhere.
It became increasingly clear that Israel wished to replace the military occupation of the territories with an economic integration into the Israeli state. Israel aims to build industrial zones along the border with Gaza that would resemble those along the Mexican and US border, and the industrial parks of Taiwan. These zones would be fed by cheap labour but would not create the attendant security problems of having a work force based within Israel.
In April 1994 the PLO and Israel signed the Paris Protocol on economic relations. It affirms the right of both parties "to determine ... the extent and conditions of the movement of labour into the area". This means that Israel will be able to turn on and off the flow of Palestinian labour into Israel. The protocol also agrees to refer to the PLO/Israeli Joint Economic Committee any Palestinian imports of goods that might undermine Israeli economic interests.
The Israeli government is encouraging the development of a subordinate economy in the occupied territories. There is a widespread system of subcontracting of Palestinian labour, with Israeli companies exporting raw materials for assembly in the territories. Simultaneously Israel is supporting the growth of agricultural crops that complement Israeli industry. Since 1991 one-third of the arable citrus land has been confiscated by the Israelis from Gaza; 90% of Gazan citrus production now ends up in Israeli juice companies, and is then exported to other Arab countries with Palestinian labels.
Divisions in Israel
While the prime ministerial election was between only Labour's Peres and Likud's Netanyahu, the choice in the Knesset was much broader. Smaller parties, many representing extremely conservative forces, religious and otherwise, raised their representation in the Knesset at the expense of the two main parties.
This reflected not only the similarity in Labour's and Likud's political programs, but also the increasing differentiation within Israeli Jewish society, on an ethnic and racial basis. Most of the smaller parties ran without an economic program, except one of maximising their representation in order to secure better funding for their constituencies.
Israel has traditionally had an economy characterised by a high level of state ownership and welfare, although almost exclusively for the benefit of its Jewish citizens. Hence a June 6 editorial in Israel's business newspaper Globes warned Netanyahu against rushing headlong into implementing a "US-style conservative-liberal economic direction".
Examining a cross-section of Netanyahu's voters, said Globe, revealed that it would not be a preferred economic policy of most Shas supporters, the new immigrants list, Torah Judaism, a large part of the National Religious Party or half of those voting for Likud. They would be harmed by such a policy, said the editorial, adding that "Israel has a tremendous socio-economic gap, which Netanyahu's policy would widen even further".
The Jerusalem-based Alternative Information Centre analysed this aspect of the election outcome: "Jewish-Israeli society is deeply divided between a Westernised, modernist, secular sector, belonging mainly to the upper-middle class; and a second sector with a strong Jewish and religious identity which rejects modernist-secularism. This second group is divided between the Askenazi (European) religious community and the largely working-class Mizrahi (Middle Eastern, Asian and African) community. The two Orthodox parties (United Torah Judaism and Shas, representing each of these communities, respectively) are based primarily on identity politics. Their religious or right-wing content is secondary, although formidable."
Some of these parties have the strongest opposition to a Palestinian state, as they identify the peace process with undesirable changes to the Israeli economy, and expansion of the Israeli state into the West Bank and Gaza with improved economic opportunities for the growing number of unemployed inside Israel. Under these circumstances, Likud — far from homogenous itself — and Netanyahu will face political difficulties carrying through the US-Israeli version of the Middle East peace process. Unfortunately, the Palestinians may again pay the price.