Foreign Policy

A Palestinian State – The Day After

On Thursday, August 4th, Arab League foreign ministers and representatives from Jordan, Egypt, Saudi Arabia, Morocco, Lebanon and Qatar announced that they would support the plan of the Palestinian Authority (PA) for collective recognition of a Palestinian state at the UN General Assembly (UNGA). So what kind of state exactly would the UNGA be endorsing especially given that it has no power to do so without Security Council approval… but we’ll leave that legal issue aside for the moment, as well as the geo-political implications of a sovereign Palestinian state that will inevitably be controlled by radical Islamists.

The 1933 Montevideo Convention on the Rights and Duties of States defines a “state” as an entity with a permanent population; a defined territory; a government; and a capacity to enter into relations with the other states – none of which the Palestinian state scheduled to be declared by the UNGA in September would possess. As Steven Rosen points out in Foreign Policy, this particular UN “state” would have two incompatible presidents, two rival prime ministers pursuing incompatible policies, a constitution whose central provisions are being violated by both Hamas and the Palestinian Authority, no functioning legislature, no ability to hold national elections (Abbas is in the 80th month of his 48-month term and has cancelled local elections four times), no effective judicial system, a population not entirely under its control since a terrorist group allied with Iran holds half its putative state, questionable borders that would involve annexing territory under the control of another state (Israel), and no clear plan to resolve any of these conflicts.

Political Consequences

Assuming, however, that such a “state” is declared, both Israel and the United States have made it clear that unity talks between the PA and Hamas and the PA’s unilateral UN bid for statehood would have serious financial and political consequences.

For Israel, sufficient grounds already exist to abrogate the Oslo Accords (1) should it wish to do so. UNGA “recognition” would merely be additional icing on the cake. According to Israel’s ambassador to the United States, Michael Oren: “We have a lot of agreements with the Palestinian Authority, we have no agreements with a ‘Government of Palestine.'” The PA’s continuing violations have led to increased terrorism and diplomatic isolation, two costly wars in Lebanon and Gaza, and the disenfranchisement of Israel’s political center. Abrogating the Accords would not only terminate the basis upon which the PA itself was established and release Israel from cooperating with the Palestinians on numerous issues (most notably in the economic and security spheres), but would open the door to annexation and the extension of Israeli sovereignty over several major cities and towns on the West Bank which it currently controls in Area C – notably Ariel, Ma’aleh Adumim and the Gush Etzion bloc.

From a security perspective, should a Palestinian state be declared, and should the Accords be abrogated and Israeli security forces withdrawn, Palestinian officials are well aware that Hamas (whose charter calls for jihad and genocide against Jews and Israel) is waiting in the wings for its opportunity to take over the West Bank, as it did in Gaza, and the Palestinians are not overly anxious to commit collective suicide through a third intifada that could quickly spiral out of control in favor of these Islamists – although Israel must prepare for that possibility.

Economic Concerns

Nor does the economic horizon appear to be any better if statehood is declared. The habit of throwing money at international whiners has become the preferred method of keeping peace in the world, at least temporarily. Well over two hundred NGOs operate in the West Bank and Gaza, and 30% of the Palestinian GDP comes from foreign aid, making the Palestinians the largest per capita recipients of foreign aid in the world.

According to World Bank estimates, the PA received $525M in international aid in the first half of 2010, $1.4B in 2009 and $1.8B in 2008 making foreign aid the principal funding source for economic growth in the Palestinian territories. These billions of dollars in foreign aid would be jeopardized should the UNGA approve a Palestinian state outside the Oslo framework.

Few states can claim to have failed before they are even declared, but the Palestinian Authority may be about to create one of them. Part of the problem the PA faces relates to the multitude of programs and services in Gaza and the West Bank provided by the UN Relief and Works Agency (UNRWA), the vast majority of whose funding is derived from foreign aid. UNRWA defines “refugees” much more broadly than any other NGO globally. Its broad definition includes not only those Palestinians who fled their homes in 1948 – then numbering about 750,000 – but their children, grandchildren and great-grandchildren as well, who now number four million in Gaza, Jordan, Lebanon, Syria and the West Bank.

If foreign aid to UNRWA dries up because of the UN bid, the PA would be hard-pressed to pay for the vast educational, social, healthcare and relief services the agency now provides to its West Bank and Gaza “refugees” and this will have serious political consequences.

Complicating these matters, the PA has also reached its borrowing limit. It carries a $585M deficit, is dependent on foreign aid to sustain its infrastructures, is the largest employer on the West Bank, and pays the salaries of approximately 150,000 civil servants and military personnel. During June and July, in a foretaste of what is to come, those salaries were cut in half (a decision later reversed when a general strike was threatened) and the prognosis looks even worse in the run up to September if they choose to proceed with their UN statehood initiative. Palestinian banks and the private sector have lent the PA more than $1B and they are loath to lend more.

Reports from credible media sources have noted that some ministries have already lost electricity due to their inability to pay their bills. In July, the PA ordered a reduction in the price of bread, leading to bakery strikes, and September will bring additional bills for educational fees and school supplies. In some areas, garbage is said to be piling up in the streets. In a very real sense, the economic repercussions of a massive loss in foreign aid revenues would be staggering, not to mention the political fallout that would certainly follow in its wake.

The U.S. Congress is also threatening to cut off aid should the PA reconcile with Hamas and move forward on its statehood initiative. In fiscal year 2011, U.S. foreign aid to the PA reached $550M. On July 7th, the House passed a resolution opposing the statehood initiative by a 407-6 margin. House leaders followed up the resolution with a letter sent directly to PA President Mahmoud Abbas to “warn of the severe consequences” of continuing the UN initiative. As Jonathan Tobin writes in Commentary: “This initiative is rightly viewed by the Obama administration as a direct challenge to its leadership. The PA’s tactics are sufficiently insulting to the U.S. that it may just motivate the administration to make good on threats to cut off American aid.”

In addition, 87% of Palestinian exports now go to Israel, making the Palestinian economy dependent on good relations with its neighbor – a relationship that is deteriorating by the day. Over and above this, one-seventh of the total Palestinian workforce are employed in Israeli West Bank towns and cities, which the PA has, at least for now, sought to ban.

Nor is the possible loss of Western foreign aid the PA’s only dilemma. Donations from the Arab world have plummeted. Its chief Arab benefactors (most notably Saudi Arabia) have failed to meet their own multi-billion dollar commitments to economic aid this year. Arab donors pledged $500M in 2008, 2009 and 2010 (of which only 7% was delivered) and increased it to $971M in 2011, but the year is more than half over and only $330M has been delivered. While Saudi Arabia did announce a $30M donation to the PA recently, that is far cry from the billions it promised. It is more concerned with shoring up its anti-Iran Sunni alliance with Jordan than pouring more funds into a dysfunctional Palestinian state that would be politically and economically problematic. The Saudis have therefore saved Jordan from bankruptcy and infused the country with an estimated $1B in July alone on the condition that Jordan accepts Saudi policies instead of bowing to Washington’s demands that are based on the delusion of a democratic Arab Spring. In this regional Sunni-Shiite power struggle between Iran, Saudi Arabia and Turkey, the PA’s economic woes seem to have taken a back seat to Arab power politics, and the PA is becoming more trouble and costing more money than it’s worth.

Compounding Palestinian concerns, a recent Palestinian Media Watch report just presented to the U.S. Congress documents that, in May 2011, the PA paid just over $5M in salaries to Palestinians in Israeli jails, including 5,500 convicted terrorists, many of whom have Israeli blood on their hands – not to mention the families of Palestinian “martyrs” after whom tournaments, summer camps and marketplaces have been named. As Herbert London notes in Hudson (NY): “It pays to be a terrorist. These monthly stipends are more than the average salary for a PA civil servant or military officer.” Last year, the U.S. provided $225M to the general Palestinian operating budget from which these salaries continue to be paid. As this represents a flagrant violation of U.S. anti-terrorism laws, Congress is now reviewing its options, and PA actions in September, as well as its pending pact with Hamas may tip the scales in favor of those in Congress seeking to terminate foreign aid.

And the U.S. Congress is not alone in its threat. Part of the 500M euros ($720M) in aid funds from the European Union, the largest single donor to the Palestinians, is also being used for similar purposes, and it’s causing an uproar. It was disclosed recently that the PA has authorized payments of almost £5M to the families of “martyrs”, and another £3 million to the same Palestinian prisoners held in Israeli jails. According to the official Palestinian daily newspaper Al-Hayat Al-Jadida, payments to the families of “martyrs” (the definition of which includes suicide bombers) totals 3.5% of the PA budget.

And there is one final fear facing Palestinian leaders. Since 1998, more than $500M in judgments have been won against the PA by the families of victims of Palestinian attacks under the Anti-Terrorism Act of 1991. PA Prime Minister Fayyad has urged the U.S. administration to impose a presidential waiver that would protect the PA from having its bank accounts frozen in the United States to pay for these judgements, but that waiver depends very much on PA actions over the next thirty days.

Daniel Greenfield summed it up well in FrontPageMagazine: “The Palestinian Authority can’t pay its own bills. It can’t even fund its own army, yet insists on having one. It can’t generate its own electricity (95% of the electricity on the West Bank and 75% in Gaza comes from Israel), provide its own water, or even hold elections. If that’s not the definition of being unready for statehood – what is?”

Finally, there is talk of a third Intifada breaking out following the UN vote in September. But it’s important to note that the second Intifada (2000-2004) led to one of the deepest recessions the Palestinian economy has experienced in its short history and the memory lingers. According to the October 2004 World Bank Assessment, GDP per capita shrunk by 35% percent from its pre-Intifada numbers. After four years of conflict, the Report noted that average Palestinian incomes declined by more than a third, and one-quarter of the work force was unemployed with nearly half of Palestinians living below the poverty line. A recent poll showed that two-thirds of Palestinians oppose a third intifada, and only 14% said they would participate in one. Palestinian leadership knows full well that it has much more to lose this time around, both economically and politically if it proceeds with the statehood plan and joins with Hamas.

Possible Scenarios

Taking everything into account, Abbas is in the midst of what Robert Satloff of The Washington Institute for Near East Policy terms a self-generated diplomatic train wreck” at the UN. Abbas knows that the Islamic Middle East cannot tolerate the presence of even one acre of land under sovereign Judeo-Christian control. He recognizes that peace is the only way Israel can win, and peace is the only way the Arabs can lose. Accordingly, surrendering land for peace is not the issue; Israel must cease to exist. As late as July 13th, Fatah’s foreign relations boss Nabil Shaath gave an interview to a Lebanese television station in which he stated point blank that the PLO will never accept Israel’s right to exist as a Jewish state.

With that in mind, for the past sixty-three years, Palestinian leaders have promised an absolute Palestinian “right of return” to Israel. Abbas knows he can’t make peace with Israel and negotiate a two-state solution that would recognize Israel’s legitimacy – no matter what the terms of the agreement or where the final borders might be drawn. That’s why the PA is unwilling to compromise on the issue of refugees; Israel as a Jewish state; or any future agreement that would constitute an end to the conflict. That’s why it has consistently chosen to avoid resuming talks without first demanding that Israel agree in advance to all its demands.

But he also knows that he can’t afford to lose the massive financial aid pouring in from the U.S. and European Union without causing economic ruin for his embryonic state. Both Arab League Secretary-General Nabil Elaraby and PLO Council Member and former PA Information Minister Nabil Amr have expressed concern over the plan. Amr told the London-based Al-Quds Al-Arabi newspaper in an interview in late July that he was advising Abbas to reconsider the move.

Given all this, the best the PA can hope for is a compromise that would elevate it’s status at the UN from a non-voting “Observer Entity” to a non-voting “Observer State” like the Vatican 2. This status could conceivably expand PA rights by allowing it to leverage international pressure by joining numerous United Nations bodies and conventions, and running to the International Criminal Court (ICC) with charges designed to demonize and delegitimize Israel. But in so doing, it would have to become a signatory to the Rome Treaty. If so, it could backfire as it would open itself up to prosecution for Hamas’s war crimes. On the other hand, “Observer State” status is a far cry from the full membership state status Abbas promised his people, and anything short of full statehood might well be viewed as a betrayal. If so, all the foreign aid in the world won’t save him.


  1. As Arafat saw the Oslo Accords as part of his 1974 Phased Plan calling for the phased destruction of Israel, it is little wonder that the Accords have been honored more in their breach than in their observance. In violation of the Accords, the PA has failed to change the PLO Covenant by amending the clauses which call for the destruction of Israel (Article XXXII (9)). It has actively instigated rioting and taken few steps to halt armed attacks by PA police against Israeli forces. It has failed to confiscate illegal arms and disband terrorist militias like the Al-Aqsa Martyrs Brigade thus enabling them to remain active (Article XIV, and Annex I, Articles II (1) and XI). It has failed to extradite suspected terrorists to Israel. It has conducted official activity in Jerusalem by maintaining headquarters, funding schools, paving roads and providing municipal services – all of which are prohibited under the Oslo Accords. It has recruited terrorists to serve in the Palestinian police. It has not protected Jewish holy sites from being desecrated. It has failed to revoke the death penalty for selling Arab lands to Jews. Its security forces have systematically utilized arbitrary arrests, detention and torture. It has signed a pact with Hamas – a terrorist organization committed to Israel’s destruction. It has conducted foreign relations by concluding economic and cultural agreements with other states which is specifically forbidden by the Accords (Article IX), and it has circumvented direct negotiations with Israel by seeking statehood from the UN on what are required to be final status talks with Israel. Each of these actions constitute a violation of the Oslo Accords. But the most flagrant violation continues to be its incitement to hatred of Jews and Israel in its school textbooks, public speeches, and its official media. An Arabic translation of the “Protocols of the Elders of Zion” can be found on the website of the Palestinian Authority’s Ministry of Information. For almost two decades, Israelis have bristled at maps in Palestinian schoolbooks and documents that designate Israel as Palestine, Palestinian TV broadcasts of mosque leaders denigrating Jews, and statements by Palestinian leaders calling for the ethnic cleansing of all Jews from any future Palestinian state in the West Bank, Gaza and east Jerusalem – for starters. In total, more than 600,000 Jews reside in east Jerusalem and the West Bank. Any Israeli who would call for the expulsion of Arabs from Israel would be rightly branded as an extremist, but few in the West think it odd that the Palestinians’ view of a two-state solution is to have one state with Jews and Arabs, and one Arab state from which all Jews have been expelled. All this is reinforced by the fact that Palestinian terrorists who carried out deadly attacks against Israeli civilians are widely regarded as “martyrs” in Palestinian society. CAMERA reminds us that Article 26 2 of the U.N. Universal Declaration of Human Rights implicitly condemns incitement to hatred and violence against other ethnic/religious groups in textbooks and the U.N. Commission on Human Rights Resolution 2003/37 (No. 4) condemns incitement of ethnic hatred, violence and terrorism, but the PA seems to be violating the Accords without consequence.
  2. If the Palestinians can get a two-thirds majority in support of statehood in the General Assembly, they also could put forward a so-called Uniting for Peace resolution. This non-binding, advisory resolution could provide legal cover to nations wanting to treat Palestine as a state – for example, allowing sanctions and lawsuits against Israel to go forward. The Uniting for Peace option was first used to circumvent a Soviet veto in the Security Council against action during the Korean War, and it was employed during the 1980s to protect countries that sanctioned apartheid South Africa from being sued under international trade laws.

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