TEL AVIV
Whatever glimmer of hope remained for a Middle East peace accord is being snuffed out by the financial crisis, which is likely to preoccupy the White House into the next administration and sap financial resources to bolster an accord, analysts here say.
The Bush administration had targeted the end of 2008 for an Israeli-Palestinian peace agreement, but with Israeli and U.S. administrations in transition as well as a weak Palestinian Authority, the chances of a breakthrough were already slim.
Now Wall Street’s implosion over the past month and expectations of a deep U.S. recession will leave little time for the next U.S. president to be actively engaged in the talks.
“We are being shelved for the moment,” said Hanna Siniora, co-president of the Israel-Palestinian Center for Research and Information and a veteran Palestinian interlocutor with Israel and the United States.
“And if the crisis deepens, it’s bad news for all of the Middle East. There won’t be any interest in the government of the U.S. to do anything.”
Though the next administration is likely to dispatch its secretary of state or a special envoy to keep on top of Arab-Israeli peacemaking, presidential involvement has been required in the past to clinch deals.
There is also concern that squeezed government budgets could sap foreign financial support for the Palestinian Authority , which is almost entirely dependent on foreign aid to pay salaries.
“It will be less popular to get the American or European taxpayers to contribute money for the Palestinians,” said Akiva Eldar, a political commentator for the Israeli newspaper Ha’aretz. “Especially if the peace process isn’t going anywhere.”
So far, a Palestinian official charged with overseeing foreign aid to the Palestinian Authority said she has seen no signs of donors reneging on the $2 billion the Palestinians are slated to receive over the next year.
Low expectations for an agreement by the Bush deadline have already spurred an uptick in chatter among Palestinians that negotiating a two-state solution to the conflict is futile, and alternative strategies - such as promoting one binational state - should be explored.
Outgoing Israeli Prime Minister Ehud Olmert surprised the country recently when he said that Israel would have no choice but to withdraw from most of the West Bank and parts of East Jerusalem if it wants peace with the Palestinians.
But Foreign Minister Tzipi Livni, who is trying to form a coalition government to back her as Israel’s new prime minister, said that neither Palestinians nor Israelis are ready to move forward on a breakthrough land-for-peace deal.
With the steady expansion of Israeli settlements in the West Bank - settlers claim they now number more than 300,000 - and construction of a separation barrier that cuts Palestinian areas into jigsaw-puzzle pieces, Arabs are beginning to despair that a viable Palestinian state in the West Bank is still possible.
Some Palestinians have called for a strategic reassessment if the sides fail to reach a treaty by the Bush administration deadline. Others, such as Kadoura Fares, a former legislator for the Palestinian party, Fatah, say there is a two- to three-year window before the two-state solution becomes impractical.
“If they continue to build settlements, there doesn’t need to be any negotiations,” he said. “If we don’t succeed in negotiations, we need to switch to a new strategy.”
Realizing that demographics are in their favor, some Palestinians have suggested pressuring for the creation of one binational state including the West Bank, Israel and the Gaza Strip. But others remain skeptical.
“You cannot just sit back to wait for demographics to take over,” said Hanan Ashrawi, a former Palestinian Cabinet minister and negotiator. “Israel is not just a neutral actor.”
Please read our comment policy before commenting.