Changing the Equation: International Incentives
for Israeli-Palestinian Peace

Dr. Lior Lehrs March 2021

How can the international community advance peace? Leaders and diplomats have pondered this question for years with regard to conflicts and wars around the world. International incentives for peace, an important component of any diplomatic toolbox, are one method. International actors can offer the parties incentives as a strategy to advance peace and as a tool to sway the attitudes of both decision makers and the public towards a peace process. The aim of such incentives is to influence the considerations of the sides involved and to change the existing equation. They can be used at different stages of a process – for example, to encourage the sides to enter into negotiations or to promote agreement on a peace arrangement. However, in order for them to be effective, incentives must provide a response to the collective and unique needs of the sides while also relating to their fears and hopes.

Over the years, various international actors have offered incentives for the advancement of Israeli-Palestinian peace, to name a few: The Arab Peace Initiative (2002), the EU proposal of a Special Privileged Partnership with Israel and a future Palestinian state (2013), and the American security package compiled by Gen. John Allen within the framework of US-mediated Israeli-Palestinian negotiations (2014). These incentives were presented at different stages in an uncoordinated manner and their efficacy fell short of their sponsors’ expectations. More recently, against the backdrop of the diplomatic freeze between Israel and the Palestinians, various parties, including the EU’s Foreign Affairs Council, have pointed to the need for a package of diplomatic and economic incentives to help the sides achieve a breakthrough and a path out of the stalemate.

Against this background, the Mitvim Institute convened a team of Israeli and Palestinian policy experts to discuss the formulation of a joint proposal of international incentives for peace in cooperation with the Friedrich-Ebert-Stiftung. The resulting proposal seeks to respond to five key needs the experts identified as common to both sides: Security, recognition and legitimacy, religious rights, economic prosperity, and domestic demands. While these needs are common to both Israelis and Palestinians, they differ in substance and significance.

Security needs are key in any conflict and international security guarantees can help the sides accept compromise and take risks for the sake of a future arrangement. The US has played an important role in this regard in previous peace processes, for example in providing security guarantees within the framework of the Israel-Egypt peace agreement. The US could be similarly instrumental in an Israeli-Palestinian agreement by offering Israel security guarantees, such as security aid or the presence of US troops within the framework of special security arrangements in the Jordan Valley or other areas. Concurrently, international actors, chief among the US and the EU, could offer the Palestinians security guarantees to compensate them for agreeing to a demilitarized state and the presence of foreign forces. The neighboring states, Egypt and Jordan, could take part in an international security incentives package as well.

Additionally, recognition and legitimacy are of great importance. In this context, Arab states could offer Israel significant incentives, including regional normalization and recognition measures. At the same time, the Palestinian side seeks international recognition of an independent Palestinian state. Various international players, chief among the five permanent members of the UN Security Council, could offer incentives responding to this need in tandem with progress toward a peace arrangement.

The religious aspect, including the issue of the holy sites, will also require incentives, having been a key obstacle to progress in previous peace talks. International incentives, such as involvement in a special regime in Jerusalem’s Old City, could respond to these sensitive issues. Muslim religious leaders and religious institutions around the world could offer incentives of recognition and legitimacy in the religious context and help tackle the symbolic dimension of the issue. UNESCO, the Vatican, and the Organization of Islamic Cooperation could also contribute their share.

Economic incentives are a necessary and important component in efforts to promote peace, and various efforts have been made in this regard throughout the Israeli-Palestinian peace process. They were particularly prominent in the Oslo process in the 1990s, which included regional economic conferences, but the diplomatic crisis between the sides thwarted the economic endeavors. More recently, the Trump Administration proposed a series of economic incentives as part of its “Deal of the Century”, but it failed to link these incentives to peace negotiations and to a viable diplomatic horizon based on the two-state solution. Various actors could take part in an economic incentive package, chief among them the EU, the US, the Gulf States, and international financial institutions. The package could include aid for building a passage between the West Bank and the Gaza Strip, for creating an artificial island off the Gaza Coast and advancing regional tourism initiatives.

Furthermore, any incentives package must also provide a response to each side’s domestic needs, whether collective or specific to groups on each side. Thus, for example, incentives for Israel could address the issue of property Jews left behind when they were forced to flee Arab and Muslim countries, and incentives for Palestinians could address the status of Palestinian residents of East Jerusalem or Palestinian refugees.

The process of formulating and presenting the incentives package should be led by a mechanism comprised of various international actors, among them states and organizations who are able to offer relevant incentives. The mechanism must also be effective, flexible, and dynamic, with the capacity to coordinate among all the players and promote the incentives package as a long-term process. Presentation of the package must also distinguish between different target audiences. It must address different parties on each side of the conflict – decision makers, civil society organizations, religious leaders, and the media – as well as various actors in the international arena. In order to be credible and effective, the incentives must be offered in close conjunction with a clear political vision and progress in the peace process.

Renewal of the Israeli-Palestinian peace process does not seem to be on the horizon, and the issue is not high on the international agenda. Given the failed initiatives and efforts of past years, international actors are debating how best to proceed and are looking for new ideas to advance Israeli-Palestinian peace. The international incentives package proposed by the Mitvim Institute team provides one potential tool for breaking the deadlock, and discussion of the ideas it raises could help advance an optimistic, forward-looking discourse, empowering the actors and peace advocates and bolstering the sides’ willingness to entertain peace initiatives.

*This article is based on a policy paper he authored with Moien Odeh, Dr. Nimrod Goren and Huda Abu Arqoub based on Israeli-Palestinian deliberations held by the Mitvim Institute in cooperation with the Friedrich-Ebert-Stiftung.

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