How Not to Botch a Peace Deal with Israel 101

How Not to Botch a Peace Deal with Israel 101

Trump's foreign-policy team should not contemplate any deal with Israel unless that deal clearly advances U.S. interests.

Of all of President Donald Trump’s priorities in the Middle East—defeating ISIS, countering Iran, and rebuilding damaged alliances among them—none is as surprising as his zeal for pursuing an Israeli-Palestinian peace agreement. The prevailing sentiment in Republican foreign-policy circles had been that President Obama and Secretary of State John Kerry pushed too hard for such a deal when the time was not ripe and other regional priorities should have taken precedence. The two-state solution—which became firmly entrenched in the foreign-policy lexicon under President George W. Bush yet under Obama it became associated in Republican minds with wringing unilateral concessions from Israel—fell so out of favor with the GOP that reference to it was removed from the party platform in 2016.

Yet President Trump has taken up the issue with gusto. Israeli prime minister Benjamin Netanyahu visited the White House in February, and Mr. Trump took the opportunity to speak publicly on the issue of settlements. He has twice dispatched a White House envoy, Jason Greenblatt, to the Middle East for consultations on the peace process. He welcomed Palestinian Authority president Mahmoud Abbas for an early visit—offered without any preconditions—to the White House, a major boost for a leader who had faced setbacks on both the domestic and international stage. And his first foreign trip will not be to Canada or Mexico as has long been presidential tradition, but to the Middle East, where he will visit with Netanyahu and Abbas again in Jerusalem.

Why the focus on the Israeli-Palestinian conflict? Perhaps it should not be so surprising: the issue has been a presidential preoccupation for decades. As Dennis Ross has noted, even Ronald Reagan—associated in the public mind with the fight against communism and the fall of the USSR—lent his name only to one diplomatic initiative, the “Reagan Plan” for Arab-Israeli peace. Perhaps even more importantly, an Israeli-Palestinian peace agreement would be, in Mr. Trump’s words, “the ultimate deal,” a strong temptation for a president who regards himself as a consummate dealmaker.

Yet if in defiance of the odds President Trump is determined to tackle the Israeli-Palestinian conflict, those dealmaking instincts may prove useful. Indeed, he could do worse than to begin by analyzing the situation as he might a prospective business negotiation.

Parties and Interests

An Israeli-Palestinian agreement is not an end in itself, except perhaps for those negotiators who will forever trade on having cinched one. Instead, the parties engage in negotiations to advance one or more interests. In business, these interests tend to be straightforward: profit, access to a market or technology, or perhaps a desire to disadvantage a competitor. In politics, they need be no more complicated.

For Israel, the overriding interest implicated in any peace negotiation is security. A recent poll by the Jerusalem Center for Public Affairs found that 76 percent of Israelis felt Israel should retain full security control of the West Bank in any future peace agreement, and that 57 percent would not support a deal without such a condition. Israel has other territorial, economic and diplomatic interests, to be sure, but will only consider a prospective deal if it clearly advances the nation’s security.

Palestinians’ interests are more controversial, and more difficult to pin down. In the near term, Palestinians are preoccupied with the concerns of everyday life—a recent poll by the Palestinian Center for Polling Studies and Research shows that as many Palestinians believe the “spread of unemployment and poverty” should be the Palestinian Authority’s top priority as those who answered “continuation of occupation and settlements.” Almost as many suggested “the spread of corruption in public institutions” should be the Palestinian Authority’s first concern. Yet while many would consider a peace agreement to be instrumental to addressing these concerns, polls also suggest that most Palestinians oppose the sort of compromises represented in past peace proposals and instead continue to harbor maximalist aspirations, as Daniel Polisar of Shalem College has noted.

That reality is harsh enough, and there is clearly no squaring Israel’s interest in security with maximalist Palestinian territorial ambitions. Yet negotiations turn not only on each side’s true position, but on what each side believes to be the other’s position, whatever the reality. On this score, the situation appears even bleaker. Both Israelis and Palestinians tell pollsters they are skeptical of the other side’s ultimate intentions, with about 80 percent of Israelis indicating that an Israeli withdrawal from the West Bank would not bring an end to the conflict with the Palestinians, according to the JCPA poll.

In addition, the interests of decisionmakers may not match those of their citizenry—a misalignment known in business as a principal-agent problem. For the Palestinians, this problem appears acute—Palestinian Authority officials seem more likely to suffer a loss of status and reputation by making concessions to Israel than by refusing to do so. Yet even Israel, a vibrant electoral democracy, is not immune: its coalition politics mean that small parties can have outsized influence, and thus their narrow interests can trump those of the broader populace. Coalitions can be reshuffled, of course, but there is a cost in doing so; a right-wing prime minister would surely be reluctant unless a worthwhile peace deal seems truly within reach.

The Israelis and Palestinians, of course, are not the only parties to the conflict. Arab states have historically played a role in it. Ironically, however, to the extent they have an interest at stake, it is in expanding relations with Israel, with whom they share common regional enemies, rather than in the creation of a Palestinian state. Yet they already enjoy Israel’s tacit cooperation, the formalization of which would likely yield only incremental gains and entail domestic blowback, dampening their incentive to act.

The United States is also in the thick of the conflict. This has been the case for so long that policymakers might forget to question why it is so. Yet it is vital that they do so lest they end up supporting an agreement that does not clearly benefit the United States. The U.S. interests most implicated by the Israeli-Palestinian conflict are twofold: first, in regional stability, since Gaza and the West Bank remain potential flashpoints; second, in the security of Israel, Jordan and Egypt, all allies vital to higher U.S. priorities in the region, such as the struggle against ISIS or Iran. If the Trump foreign-policy team has a rallying cry, it is “America First,” and with that in mind they should not contemplate any deal or step unless it clearly advances those U.S. interests.


In evaluating any potential deal, each party makes a simple comparison—is it better or worse for my interests than the best available alternative to a negotiated agreement?

In Israel, there has long been robust discussion of alternatives to a negotiated peace deal with Palestinians. Former Israeli prime minister Ehud Olmert campaigned in 2006 on a platform of unilateral withdrawal from the West Bank, similar to Israel’s previous withdrawal from Gaza. Other Israelis have argued for a supposed “one-state” solution, and yet others for annexation of the West Bank. But for Israel the clearest alternative to a negotiated agreement is simply the status quo. Despite the turmoil in the Middle East, Israel is doing well. Terrorism is largely under control, the economy has grown at a healthy clip, and Israel’s foreign relations are steadily improving, both with Arab states and the world beyond. It is counterintuitive, perhaps, but Israel’s prosperity means that it has less to gain from a peace deal.

For the Palestinians, several alternatives to a negotiated agreement present themselves. For Palestinian Authority president Abbas, the preferred alternative is internationalization—that is, to recruit the “international community” to impose peace terms on Israel in lieu of negotiating them. Until the election of Donald Trump, Abbas had reason to believe this approach was paying off. The European Union and the American Left were increasingly in favor of sanctions against Israel, and the Obama administration at long last allowed a UN Security Council resolution condemning Israeli settlement activity to be adopted. Abbas, of course, is not the only Palestinian voice, nor is his preferred alternative the only one available. His bitter rivals in Hamas, for example, prefer a different alternative: violence, which it recently reaffirmed in an updated draft of its charter.

The leadership of each side is continually comparing these alternatives not to any particular deal, since neither side has proposed one, but to what each believes is the real aim of the other side. Whether conflict leads Israelis to prefer negotiations to the status quo, for example, depends in part on whether they feel the Palestinians’ aim is to compromise with them or eliminate them. Not only Hamas but many ordinary Palestinians, through polling, have made clear that their aim is the latter. And the UN, Europe and others have only reinforced the problem by steadfastly refusing to back Israel during wars with Hezbollah in 2006 and with Hamas in Gaza on numerous occasions, leading many Israelis to conclude that peace efforts have compromised rather than enhanced their security.

The Way Forward

If negotiations are to have any chance of success, there must be a range of theoretical deals that both sides prefer to their respective alternatives. This is what negotiation experts call a “zone of possible agreement” or ZOPA. Discussions of past failures of Israeli-Palestinian negotiations often focus on tactical matters—for example, whether talks should be phased as in the case of the 2003 roadmap, whether the parties should hold to the principle that “nothing is agreed until everything is agreed,” or whether talks should be bilateral between Israelis and Palestinians or include an American delegation. Yet it is far more likely that past failures simply result from the absence of a ZOPA—i.e. that the most one side was prepared to give did not meet the bare minimum of the other—and that such tactical considerations were therefore largely irrelevant.

If no ZOPA exists, the question before American policymakers keen to pursue the peace process is how to create one. Because the existence of such a zone depends on each party’s comparison of the value of a negotiated deal to its best alternative, there are two ways to open a ZOPA: improve the deal, or worsen the alternatives. And because entering negotiations tends to entail a political cost for leaders, it is important not just how each side judges the presence or absence of a ZOPA in light of its own interests, but how it perceives the other side’s calculations. U.S. officials will need to address all these questions, all the while keeping American interests front and center in their plans lest negotiators’ zeal for an agreement overwhelm sensible policy.

Worsening Israel’s alternatives to a negotiated peace would be irresponsible for U.S. policymakers. It is one thing to argue against annexation or a “one-state” solution, neither of which enjoys much support among Israelis or has been fleshed out in realistic detail. Undermining Israel’s relatively secure and prosperous status quo, on the other hand, would make no sense, as the United States has a direct interest in Israel’s strength and stability. This is why calls to cut off military aid to Israel or sanction it for settlement activity are so foolhardy. Not only is this no way to treat an ally, but such actions would amount to the United States cutting off its nose to spite its face by sacrificing a current advantage (U.S.-Israel cooperation on high-priority security threats such as Iran and terrorism) for the mere hope of future progress on peace. And even that faint hope would be unlikely to materialize, as steps to weaken the U.S.-Israel alliance would likely call into question any American or international guarantees that would accompany a peace deal. In other words, an American effort to worsen Israel’s alternative to a deal might end up instead undermining the value of that notional deal itself.

The real question regarding the status quo in Israel, however positive it may be, is where it is leading and how long it can possibly last. While President Obama and Secretary Kerry recognized this (and expounded on it ceaselessly), their mistake was thinking that Israelis did not. In fact Israelis debate these questions incessantly and their politicians and parties are divided over them. But for Israeli politicians like their counterparts everywhere, short-term imperatives often trump long-run concerns; it would do an Israeli prime minister little good to take bold steps for peace if the result was the collapse of his government. This is why the United States is better off seeking to strengthen the prime minister through political support and joint action against regional threats. The stronger his position, the more leeway he likely has to engage in long-term thinking.

Enhancing the value of a peace deal is also complicated with respect to Israel. The Palestinians have little to offer Israel, and even international financial and military guarantees are unlikely to be viewed by Israelis as compensating for the risks involved in ceding territory. This is why past U.S. efforts to plan for Israel’s post-peace security—led by Gen. Jim Jones and then Gen. John Allen—failed to move the needle on negotiations. Israel welcomes such efforts on their own merits, but does not see them as remotely offsetting the advantages of an Israeli military presence in the West Bank. To the extent the United States can improve the value of a peace deal in Israel’s calculus, it is likely in three ways. First, by securing commitments by Arab states to improve ties with Israel in the wake of a deal; and second, by ensuring those states and others, like the EU, commit to supporting a Palestinian state in ways that reduce the risk that it will fall into chaos or into the hands of extremists. Finally, it is vital that the United States press European and other states to support Israel when it is attacked now from territory previously vacated, such as Gaza and southern Lebanon, if international guarantees of a future peace deal are to carry any credibility. A deal would likely also be undergirded by American defense guarantees, but realistically U.S.-Israel military ties will continue to deepen with or without a peace deal, given the serious regional threats the two countries face in common.

When it comes to the Palestinians, the first order of business for the United States is to quash any notions of alternatives to bilateral negotiations, and press the EU and other states to do likewise. It must be abundantly clear to the Palestinian Authority that Washington will oppose any effort to impose peace terms on Israel, and that the United States will support Israel in responding to Palestinian violence. To preserve the value of a peace deal for Palestinians, the United States should work with Israel to place limits on further settlement activity (for example, limit construction to “upward and inward” growth of existing settlements) and the eastward expansion of Jerusalem’s municipal boundaries. Yet perhaps more important is that Palestinians themselves reach a realistic understanding of what they can achieve, since it seems unlikely they will receive more territory than they have rejected in past Israeli proposals—just the opposite, in fact. While the United States cannot instill such realism in the Palestinian leadership, it can urge Arab states to counsel Palestinian leaders in private exchanges with the Palestinian Authority and to offer public support for whatever concessions Palestinian leaders must make.

In parallel with steps designed to open a ZOPA, such as those above, the United States should encourage both sides to take actions to signal the other side regarding their own intentions, as well as to reverse the deep cynicism about peace that grips both populations. Countless specific “confidence-building” proposals have been offered along these lines; what is important is the effect that they achieve. Israel must signal recognition that it is ready to yield territory in the West Bank, for example, by limiting settlement activity. Also, Israel must be willing to loosen its control of Palestinians’ lives, for example, by allowing for the expansion of Palestinian economic activity. Palestinians, for their part, need to indicate an acceptance of Israel’s permanent existence as a Jewish state and a readiness to end their conflict with Israel by ending the lionization of terrorists and the teaching of hate. Palestinian leaders should also signal a readiness to govern responsibly by fighting corruption and building a functioning state, even prior to a peace agreement, which would also serve them well should Israel ultimately opt for unilateral withdrawal.


In business, few would dispute that negotiations are of little use if one party’s minimum price exceeds the other’s maximum. Yet in both business and diplomacy, that need not be the end of the story. By taking steps away from the negotiating table to enhance a deal’s value—or worsen the other party’s alternatives—conditions can be created for talks to succeed in the future. This is where President Trump should begin: by asking how to create the possibility of an agreement, rather than worrying too much about what such an agreement would look like. The actions involved in doing so not only hold better long-term prospects for fostering peace than any summit or conference, but will advance American interests whether or not peace is achieved in the next four to eight years.

Michael Singh is managing director of the Washington Institute for Near East Policy.

Image: Prime Minister Benjamin Netanyahu during a 2011 interview. Flickr/Israeli Embassy Washington