Australia/Israel Review

A “Grand Bargain”

Feb 27, 2024 | Ilan Evyatar

Netanyahu’s current cabinet, containing some hard-right parties, would likely be a barrier to accepting the US plans. But could he agree to do so with support from centrist opposition parties? (Image: GPO/ Flickr)
Netanyahu’s current cabinet, containing some hard-right parties, would likely be a barrier to accepting the US plans. But could he agree to do so with support from centrist opposition parties? (Image: GPO/ Flickr)

Opportunity or danger after Gaza?


As the Gaza war enters its fifth month, with Israel waiting outside the gates of Rafah, having defeated Hamas’ Khan Younis division, the Biden Administration was said to be looking for a “grand bargain”. This would be a deal that would bring the Israel-Hamas conflict to an end, get the hostages released and bring about normalisation between Israel and Saudi Arabia, in exchange for “substantial steps” towards a Palestinian state.

Several European countries, including France and the United Kingdom, have reportedly raised the possibility of unilateral recognition of such a state even before talks on a comprehensive deal have begun. The Biden State Department is also said to be reviewing the possibility of a statement of intent to recognise a future demilitarised Palestinian state as part of a process to kick start a regional process, although it is unclear what form this may take. 

Not unexpectedly, Israeli Prime Minister Binyamin Netanyahu has strongly rejected any such unilateral recognition. A cabinet statement passed on February 8 backed his position: “Israel absolutely rejects international diktat regarding the permanent arrangement with the Palestinians. Such an arrangement will be achieved only by direct negotiations between the parties, without preconditions… Israel will continue to oppose unilateral recognition of a Palestinian state. Such recognition, following the October 7 massacre, will award an immense and unprecedented prize to terrorism, and prevent any future peace agreement.”

This position has also been endorsed by National Unity party leader Benny Gantz, the key member of the War Cabinet – who, according to polls, would score a sweeping victory were elections to be held today – and by his fellow National Unity war cabinet member Gadi Eisenkot. Both of them are former IDF chiefs of staff.

Before examining whether the political conditions for such a “grand bargain” exist, we should take a look at how Israelis themselves feel about the possibility of a two-state resolution in the wake of October 7. 

Israeli President Itzhak Herzog, who hails from Israel’s centre-left, probably spoke for most Israelis when he said in Davos on Jan. 18, “If you ask an average Israeli now about his or her mental state, nobody in his right mind is willing now to think about what will be the solution of the peace agreements, because everybody wants to know, can we be promised real safety in the future?”

Thus, polling has shown that Israelis are largely sceptical that any such peace arrangements can be made to work, a trend that has been developing for some time. A Pew Research Center survey from before the Hamas massacre showed that only 35% of Israelis surveyed between March 15 and April 24, 2023, believed that “a way can be found for Israel and an independent Palestinian state to coexist peacefully.” A Gallup poll conducted just weeks after the massacre found that 65% of Israelis were now opposed to a Palestinian state, a reversal from a decade ago when over 60% supported a Palestinian state. Moreover, the poll found that a record-high 74% of Israelis do not expect permanent peace between the sides can ever be achieved. A similar Israel Democracy Institute poll that asked whether Israel should agree to pursue a two-state resolution after the war found a 52% majority opposed.

But polling, as we all know, depends on the questions asked. A poll conducted on behalf of the pro-peace Geneva Initiative in January found only 31.7% of Israelis thought a two-state resolution was the most viable solution to the Israeli-Palestinian conflict – a finding similar to the other polls. Yet when asked whether they would support or oppose an agreement signed with US support that included: the return of the hostages, an agreement to establish in the future a non-militarised Palestinian state in the West Bank and Gaza, and total normalisation between Israel and Saudi Arabia, a 51.3% majority of Israelis were in favour, 29.8% were against and 19.8% said they didn’t know. 

So, while there is a broad consensus in Israel against a Palestinian state in the near future, when it is specified that such a state would be established sometime in the future and be demilitarised, and Israel would be given strict security guarantees and gain normalisation with much of the Arab world, a majority of Israelis would likely support such a move.

What then are the chances of progress toward this kind of comprehensive agreement, and would the current Netanyahu Government be able to get on board? 

Netanyahu’s current hard-right coalition partners, Bezalel Smotrich and his pro-settler Religious Zionist party, and Itamar Ben-Gvir’s Otzma Yehudit [“Jewish Power”] party, can be expected to jump ship as soon as any talk of such an agreement becomes concrete. That would leave Netanyahu with the sole option of trying to form a new coalition with the centrist National Union party and possibly Yair Lapid’s Yesh Atid [“There is a Future”] party – which, despite Gantz’s current runaway lead in the polls, has double the number of seats (25 to 12) in the current Knesset.

The question is, would Netanyahu be willing to go down that route? At a briefing I attended with Netanyahu several years ago, the Prime Minister turned to the audience and explained that he would be willing to accept a Palestinian state, “just not the Palestinian state you are thinking of.” “You” was of course not referring to me personally, but the collective audience of some two dozen journalists, apparently all guilty by association of being left-wing progressives willing to trade security for an illusion of peace (in fact, at least some of those present could be described as hard right). In other words, he would be willing to accept some kind of truncated and limited Palestinian state.

Historically, for the best part of the past 15 years, Netanyahu has vacillated between expressed willingness to accept a Palestinian state and baulking at many concrete proposals. In 2009, he said he would be willing to accept a demilitarised Palestinian state in his famous Bar Ilan speech, but then engaged in a running verbal battle with the Obama Administration over its plans to push such statehood. He did offer concessions such as a ten-month settlement construction freeze, and releasing Palestinian prisoners, and was said by US mediators to have “sweated bullets” to try to find a way to agree to a workable US-negotiated “Framework Agreement” for a future two-state resolution in 2014. But he also made many public comments insisting there was no Palestinian partner for peace, and denigrating any hopes of a two-state deal. 

When Donald Trump offered him the opportunity in 2020 for a peace deal with the Palestinians that would have seen Israel remain in control of much of the West Bank while giving the Palestinians minimum statehood, Netanyahu ostensibly accepted. However, in practice he preferred to focus on plans to annex some 30% of West Bank land which Israel was slated to keep under the plan. Later, he suspended planned annexation moves to facilitate the Abraham Accords normalisation deal with the United Arab Emirates and Bahrain.

A senior figure who served in more than one Netanyahu government told me that at the end of the day, when push comes to shove, Netanyahu as the leader would always opt against a Palestinian state and would prefer to kick the can further down the road.

Netanyahu now faces perhaps the most decisive moment of his career, a juncture that is potentially fateful for the future of Israel and the Middle East. 

If he chooses to stick with his hard-right partners, he may well lose the chance to make any progress on the Saudi front and Israel’s relations with Europe and the United States will come under increasing strain.

If he takes this route, he will also come under growing public pressure to hold early elections – a ballot that, if present polling is anything to go by, could bring a heavy defeat, given the intelligence and military failures of October 7 that occurred on his watch. 

However, early recognition of a Palestinian state by the Europeans or the US – or extensive pressure on Israel to agree to one – could result in blowback that could give Netanyahu the ammunition to launch a campaign to shore up support on his right. He is certainly hinting that may be his political strategy. On Jan. 18, he told journalists, “Whoever is talking about the ‘day after Netanyahu’ is essentially talking about the establishment of a Palestinian state,” suggesting he may campaign as the only leader who can prevent such a state coming into being.

On the other hand, a coalition with Gantz and Lapid to facilitate a hostage deal that might lead to a “grand bargain” would also likely see his own coalition partners demanding elections as soon as the current conflict begins to wind down. 

Normalisation with Saudi Arabia and other Arab and Muslim states could potentially offer him a chance to seal his legacy at the cost of an “over-the-horizon” commitment to a future demilitarised Palestinian state. But it is less clear that this option leaves him with any reasonably plausible path to remaining in power.

The arguments for backing a deal include that it presents Israel the chance to go from calamity to a situation where it expands the circle of peace, achieves full integration into an American-backed regional security architecture against Iran and gains concrete security guarantees.

On the other hand, many Israelis see any move toward Palestinian statehood at the moment as essentially rewarding Hamas for its intolerable and unprecedented violence on October 7, and have strong doubts, in the wake of Israel’s experience with past withdrawals, that any security guarantees can be truly effective. 

As has often been the case over the last decade, we once again find ourselves asking, what will Netanyahu do this time? 

Ilan Evyatar is a former editor-in-chief of the Jerusalem Report. He is co-author with Yonah Jeremy Bob of Target Tehran: How Israel Is Using Sabotage, Cyberwarfare, Assassination – and Secret Diplomacy – to Stop a Nuclear Iran and Create a New Middle East (Simon & Schuster, 2023) [see Paul Monk’s review of this book – Ed].


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