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ACTION MEMORANDUM

TO:	The Next President of the United States
FROM:	Chuck Freilich
DATE:	September 1, 2008
SUBJECT:	The Right Return

The Israeli-Palestinian “peace process” is in deep trouble, and unless we pursue bold new approaches, it may soon be dead. If that happens, the situation could deteriorate further into violence and terror, with severe consequences not just for the sides themselves, but for the entire region and U.S. interests.

One such bold approach would be to turn upside-down the assumption that the refugee issue can only be settled after a final status agreement is achieved. It may be possible not only to save but also to re-invigorate the peace process by Israel’s offering to begin the resettlement process beforehand. Such a proposal, if supported by the next U.S. administration and other relevant international actors, could break psychological barriers and help ease the politics of a final status accord.

IMPASSE AND CRISIS

Each side blames the other for the present impasse in the peace process, and to some extent both are right. On the Israeli side, 15 years of Palestinian terror and violence since the signing of the Oslo Accords have severely eroded public belief in the possibility of a real peace. By clear majorities, Israelis continue to support major territorial concessions in the West Bank as the price of peace, but they no longer believe that the Palestinians are capable or desirous of ending violence and reaching a viable peace.

Nevertheless, Israel does not wish to re-establish the status quo ante Oslo, or even the state of affairs that existed before its summer 2005 withdrawal from Gaza. It has instead made do with half measures that have, not surprisingly, produced partial results. Israel’s limited military operations in Gaza have failed to stanch the barrage of rockets fired into its towns, and the current “ceasefire” (in which some rocket fire continues) is likely to prove short-lived. It is therefore increasingly likely that Israel will conclude that it must re-conquer Gaza, at least temporarily. This, however, will produce only a temporary respite from the rocket fire and may have other negative consequences as well, which is why Israel has been loath to re-enter Gaza in force even despite the June 2007 Hamas takeover of that territory and ongoing rocket fire.

As difficult as Israel’s dilemma is, it could get worse. Only highly effective counterterror operations, and some good luck, have prevented thus far the firing of rockets from the West Bank into Tel Aviv and its suburbs. Political and technical trends are working against Israel, however, and when its luck runs out and rockets are fired into its heartland, the government will face a totally untenable situation requiring even stronger and riskier military measures.

On the Palestinian side, strong Israeli counterterrorism measures (including construction of theseparation barrier), and especially the continued building and expanding of settlements, have also eroded popular belief in the possibility of peace. The ongoing failure of the corrupt, feckless Palestinian Authority (PA) to deliver even minimal public security and social services in the West Bank has exacerbated the general sense of helplessness. In Gaza, Hamas’s brutal Islamic regime has proven no better at addressing the needs of the population.

Even worse, President Mahmud Abbas (known as Abu Mazen), the first Palestinian leader ever committed to a peaceful resolution of the conflict with Israel, has declared his intention to step down at the end of his term in early 2009. His premier, Salam Fayyad, lacks the necessary political base to succeed him. So unless Abbas changes his mind, probable only in the event of a last-minute breakthrough in the peace talks, he is most likely to be succeeded by a Hamas leader. That would leave the West Bank, as well as Gaza, in the grip of this extremist organization, with severe ramifications for the Palestinians themselves, a newly encircled Israel, and U.S. policy in the region.

The early months of the new U.S. administration are thus likely to coincide with a serious, possibly severe, deterioration in the Palestinian situation. With the Iranian nuclear portfolio growing increasingly urgent, the situation in Iraq improving but still bloody, and the price of oil high and possibly getting higher, there will be considerable pressure on the next U.S. administration to “do something” about the Palestinian issue, notwithstanding the absence of direct strategic links between these other issues and Arab-Israeli problems. Nothing short of a major new initiative, however, stands a chance of preventing the collapse of the peace process.

A BOLD STEP

Given the disarray on the Palestinian side, the onus for stimulating change will have to come from Israel. Indeed, it is highly questionable whether the Palestinians are capable of responding to any initiative of significance, no matter how forthcoming.

Several options exist in theory, but not in practice. For example, Prime Minister Ehud Olmert’s daring electoral platform of unilateral Israeli withdrawal from the West Bank is now politically dead because prior withdrawals from the Lebanese and Gaza fronts did not leave those borders secure, or Israelis near them safe. Israel could announce a significant dismantlement of settlements in areas it does not intend to keep in a final agreement. Given the nature of Prime Minister Olmert’s coalition, however, this proposal is only feasible politically in the context of a final or nearfinal peace treaty, not as a gambit to advance a fragile and underdeveloped process.

What might work, however, is an Israeli initiative to begin a graduated process of resettling Palestinian refugees, in areas it clearly does not intend to retain in a final settlement, without waiting for a final peace agreement—in other words, to front-load the benefits of solving a final-status issue.

This offer can be a component of the phased agreement now under negotiation or it can be a standalone proposal. If the former, a refugee-resettlement proposal would provide an element lacking in the “phased agreement” concept: namely, an actual change for the better on the ground. This option, however, depends on the “shelf agreement” being achieved. A standalone offer would enable a bolder and more radical breakthrough, not least because it would vault over all existing ideas and methods, in which little hope still resides.

In either case, an Israeli offer to start resettling refugees would be based on the following political and security parameters:

In the West Bank, refugees would be resettled in existing population centers, east of the security fence. Pending a final peace agreement, the establishment of new population centers would have to be mutually agreed upon. Any refugee who sought to settle in areas beyond these centers, including Israel itself, would be in violation of the plan and could be deported. Resettlement would continue as long as the PA remains in power and is governed by a leader acceptable to Israel and the international community. The process in the West Bank would be independent of that in Gaza.
In Gaza, return of refugees would be made contingent upon an end to Hamas rule and the restoration of the PA, along with an end to cross-border violence. There would be no territorial limits on resettlement, and the rate of return would be governed only by some reasonable and agreed upon absorptive rate that would prevent unmanageable dislocations.
Implementation of the plan would be graduated and contingent on both a sharp drop in terror and concrete proof of the PA’s growing ability to govern responsibly. Either an international or U.S.-led management mechanism would serve as arbiter of these criteria and other issues of mutual concern, though Israel would retain a veto.
At least in the beginning, resettlement would be limited to refugees from Jordan. Given Jordan’s strong security services, this would help facilitate a careful (if not hermetic) screening process to prevent infiltration by terrorists and others who present a danger to the success of the initiative. It would also alleviate the economic burden Jordan faces and, just as important, provide it with a role in shaping the ultimate resolution of an issue of great, even existential importance to the Kingdom, whose population is 60 percent Palestinian. If the Jordanian phase of resettlement goes well, the process could be expanded to apply to refugees in Lebanon and other countries.

RISKS AND BENEFITS

In agreeing to a conditional resettlement of refugees in advance of a final peace settlement, Israel would be ceding an important negotiating card. However, it would gain international approbation, deny the Palestinians a primary grievance, and perhaps most important, finally placing the onus for a breakthrough where it should be: squarely on the Palestinians’ shoulders. Indeed, creating a popular task for the Palestinian Authority to implement should help improve its sorely lacking governance capacities. It would also undercut those Palestinians and others who argue that Israel does not really want peace and will never concede anything significant to the Palestinians in the West Bank.

Such international approbation as Israel might gain would probably be short-lived, and pressure for further unilateral concessions would soon resume. However, given the dramatic nature of the proposed Israeli initiative and the fact that, unlike the unilateral withdrawal from Gaza, it would be coordinated with both the PA and international community, the United States, the European Union and other international actors should provide assurances that they will not support such demands, but instead back the resumption of final-status talks in which both sides will need to make concessions.

In addition to security concerns, the biggest obstacle to the plan on the Israeli side will reside in that country’s fractious domestic politics. The political situation in Israel is volatile, as usual, and early elections will probably be held before the summer of 2009. Former Likud Premier Benyamin Netanyahu, if elected, would be reluctant to adopt major new initiatives. He would be inclined to cater to his right-wing constituency and concentrate more on security issues. Foreign Minister Tzipi Livni, the heir apparent to Olmert within the Kadima Party, clearly wishes to find a way forward and is far more open to new ideas, especially if it can be seen as an outgrowth of the “Annapolis process.” Livni’s subsequent ability to keep the proposal politically viable, in turn, would depend on the cessation of violence and a visibly improving Palestinian capacity for self-government. Though we cannot entirely rule out Olmert or Labor’s Ehud Barak, the prospects of their election seem remote and this proposal is too bold to serve their electoral needs. Should Olmert choose to step down, however, as looks increasingly likely, he might be inclined to raise the idea during his final months and bequeath it to his successor.

While opposition to a Palestinian “right of return” to Israel proper may be the only issue that still unites the entire Israeli political spectrum, most Israelis also recognize that Israel’s national security objectives can be met only if Palestinian aspirations are addressed. It follows, therefore, that if the refugee issue has to be addressed, but that refugees cannot return to Israel proper, then they must return to the territory of a future Palestinian state. If that is already clear, then why not leverage the beginning of a solution to the refugee issue for the broader benefit of the peace process?

If the Palestinians can be brought to support this graduated right of return to a future Palestinian state (with its mix of some literal “return” for some and financial compensation for lost property, for others), international and Arab recognition should be extended to the plight of Jewish refugees who fled Arab countries for Israel after 1948. This quid pro quo will not only address an important issue that has not gained sufficient attention to date, but will also be of enormous help in gaining the support of the population in Israel likely otherwise to be the most critical of the proposal.

If Israeli politics align in such a way as to give rise to this idea, there is plenty to commend it on the Palestinian side. Honest observers, however, have a right to be skeptical. The Palestinians, as Abba Eban famously quipped, never miss an opportunity to miss an opportunity. Indeed, their ability to reject proposals designed to alleviate their own suffering and advance their own cause is astounding. Historically, they have always adopted an all-or-nothing approach, rejecting all proposals that provided for anything less than 100 percent of their demands. As a result, they have ended up with nothing. Just as they initially opposed Israel’s unilateral withdrawal from Gaza, some will undoubtedly find reason to oppose this initiative, as well, and demand a full “right of return.” Instead of rising to the occasion, Hamas and other radicals will denounce its partial and “traitorous” character. In light of that pressure, even Abbas and Fayyad may be constrained to express only conditional support.

Unlike previous proposals, however, this one would provide the Palestinians with immediate, tangible and gradually growing results. These results would also be coordinated with the PA, and it will reap rewards for that coordination. Pictures of returning refugees, of family reunifications, would be dramatic. Even weak and hesitant Palestinian leaders would be hard-pressed to reject such an historic opportunity. Indeed, they would have a concrete and immediate incentive to finally say “yes” to something that would help actual Palestinians. They might even find a way to fulfill their part of the bargain because, after all, the Palestinian side would gain something of great value without having to make commitments or concessions on the scale of a final status agreement.

Nevertheless, to overcome Palestinian skepticism, Israel would have to give assurances that this graduated resettlement process is not an endgame or a ploy to avoid the establishment of a future Palestinian state, but instead part of a process leading to that end. The Palestinians would also have to be assured that those refugees who decide not to avail themselves of this limited “right of return” would not forfeit any rights or compensation left for future negotiations. If this can be achieved, it would constitute a huge confidence-building measure in Israeli-Palestinian relations and would create incentives for both sides to pursue further progress. Acts that would lead Israel to suspend the flow of refugees back home would clearly contravene Palestinian interests; even Hamas would have a hard time doing that. Less violence from the Palestinian side in turn would boost confidence in Israel that real peace truly is possible.

There could be significant political benefits on the Palestinian side as well. To encourage Abbas to stay on as President, or to increase the chances of Fayyad’s succeeding him, Israel’s proposal should be packaged as a concession to them (or to an acceptable successor). As an historic step, it would dramatically illustrate the advantages of the moderate, negotiated path that Abbas and Fayyad represent, compared to Hamas’s vision of endless bloodshed. If Abbas, Fayyad and other moderates can reap the political benefits of this proposal, it could sufficiently strengthen them to move toward a peace agreement despite Hamas’s opposition. The proposal would not impose any new burden or commitment on the PA beyond those it has already undertaken, such as combating terror and providing effective governance. The prospect of the return of refugees, however, might provide them with the political wherewithal to finally perform these tasks.

The international community and moderate Arab states, too, would have important roles to play in facilitating the process and providing necessary assurances to both sides. The support of Arab states, especially Saudi Arabia, Egypt and Jordan, would be important in legitimizing the proposal and countering the opposition of radicals such as Iran, Syria, Hamas and Hizballah. This is a task for U.S. policy in coordination with Israel, particularly in gaining the support of the Palestinians and those moderate Arab governments with which Israel still lacks diplomatic relations. Clearly, the oil rich states, together with the international community, would have to undertake a substantial commitment to provide funding for transportation, housing, employment, education and other requirements to ensure the success of the resettlement process. The overall costs for the program would run ultimately into the billions of dollars, but its graduated, multiyear nature would make the economic burden manageable—indeed, far more manageable than a more concentrated refugee return that would follow any peace agreement. More important, it would help promote peace itself.

TIME OF THE ESSENCE

By addressing this ultimate issue, the proposal would provide the peace process with a vital boost. The alternatives are its likely demise and further regional deterioration. We therefore recommend that the President discuss this idea in detail in a private meeting with the Israeli Prime Minister at his earliest convenience after the Inauguration. Like all bold proposals, this one will raise serious concerns on all sides and elicit strong opposition from many quarters, but it nevertheless warrants consideration. It may, indeed, very well prove to be too much for the political traffic in Israel to bear, let alone for Palestinians to accept. In this case, it will be worthwhile broaching the concept with the Israelis as an American initiative to which they would accede, rather than take the more daring role of initiation. If the President waits too long to launch this bold stroke, the deterioration of the situation is likely to overtake his best intentions.