Has the administration found a creative solution to the settlements issue?

The US-Israel dispute over Israel’s apparent determination to continue with settlement construction in the occupied Palestinian territories in spite of its Roadmap commitments and demands from the Obama administration is reaching a critical phase. MJ Rosenberg of the Israel Policy Forum argues that, “Netanyahu believes that President Obama has gone as far as he intends to go and that he need only dig in to win.”

However, any impression that the US is backing down in this developing standoff is undermined by the fact that, “Special US envoy to the Middle East George Mitchell has called off a meeting scheduled for Thursday in Paris with Prime Minister Benjamin Netanyahu on the backdrop of the ongoing dispute over West Bank settlements.” Both Israel and the US claim to have canceled the meeting, giving contradictory accounts about how and why this has happened.

However, it is very difficult not to see the meeting cancellation in light of the Israeli government’s approval of 300 new settler housing units in the West Bank, beyond the territory incorporated by Israel’s “separation barrier.” This announcement is obviously a direct challenge to the Obama administration’s demands for a complete settlement freeze, and it is likely that the meeting cancellation is, in reality, a response to this unacceptable development. The State Department has reiterated that it is opposed to all settlement activity, including in Jerusalem, and that there were no “secret understandings” between Israel and the Bush administration to allow for continued settlement activity.

The AP reports that, contrary to Israel’s insistence that settlement activity focuses mainly on “natural growth” due to new births among existing settler populations, “Data from Israel’s Central Bureau of Statistics…[is] showing that in 2007, 36 percent of all new settlers had moved from Israel or abroad.” The report adds that, “2007 wasn’t a random blip. Migration accounted for between a third and half of the population growth in each year between 1999 and 2007, save 2005, when numbers were skewed by Israel’s withdrawal of 8,500 settlers from the Gaza Strip.”

I have been arguing for a number of weeks that a US-Israel deal on settlement activity is likely, and that if it essentially serves as a cover for Netanyahu to effectively agree to a settlement freeze, also desirable. However, if an agreement provides a face-saving way for the administration to back down on its demands for Israeli compliance with its Roadmap obligations on settlements, it would likely prove a fatal blow to the Obama administration’s efforts to reengage seriously with the peace process and make any meaningful progress in the coming months. That would, of course, be a disaster.

Unlike MJ, I don’t see any serious signs that the administration is preparing to back down. All the statements coming out of the State Department and other administration sources over the past couple of weeks have been clear and firm about the United States position that all settlement activity must end. If Netanyahu believes that he has simply stared down the US government or has been rescued by the crisis in Iran, I think he is in for something of a surprise, as signaled by Mitchell’s cancellation of his meeting with the Prime Minister.

One can already see the outlines of what amounts to a face-saving agreement for Netanyahu to give way to the administration’s demands. Ha’aretz reports that, “Israel is considering enacting a temporary freeze on settlement construction, excluding projects already underway, if the United States agrees to continued construction for natural growth once the freeze ends.” Such an agreement might appeal to the administration not only as a way of avoiding a costly and pointless confrontation with Netanyahu, but also because it fits in with a scenario the administration has been toying with for some time. A temporary settlement freeze might give the administration grounds for deploying the Annapolis agreement provision that once Phase 1 Roadmap obligations are being met, Phase IV permanent status negotiations can begin simultaneously with Phase 1 implementation.

The administration has indicated interest in front loading these permanent status talks on the issue of borders, sketching out which settlements are mutually agreed to be retained by Israel in a land swap with a future Palestinian state. If a settlement freeze is in place until a broad understanding on which areas will eventually be retained by Israel can be arrived at by the two parties, additional settlement activity within those areas, so the logic goes, would no longer pose a mortal threat to the peace process or create additional complications to the achievement of a permanent status agreement. Therefore, the “temporary” nature of the settlement freeze does not contradict the administration’s strategy for significant progress, and the grandfathering of already initiated construction projects can serve as the necessary political cover for Netanyahu to essentially give way to President Obama on this issue.

If this sounds overly elaborate, or too much like a longshot, that’s because the settlement issue is one of the most difficult that any Israeli government will be facing until it is finally confronted with the need to compromise on Jerusalem and some of the other more difficult permanent status issues. No Israeli government has ever successfully implemented a genuine settlement freeze, and Netanyahu faces particular difficulties given the sentiments in his right-wing coalition. It is understandable and wise for the administration to seek to avoid a confrontation ultimately designed to bring down the Netanyahu government over the settlement issue because it would be a draining, exhausting and costly exercise that might leave little political momentum and capital left to actually push the peace process forward, and would reinforce the idea in Israeli politics that the settlements issue is political poison that leads to the downfall of governments. For all of these reasons, any realistic agreement on settlements that is effectively an Israeli capitulation to US demands would have to be couched in these kinds of caveats.

Just as it is reasonable for the Obama administration to give Netanyahu as much political cover as possible, without backing down on the essential elements of a genuine settlement freeze, it is also important for Palestinians and their supporters to understand the difficulties the administration is facing. The kind of agreement outlined by Ha’aretz, if it is really pegged to a major push to achieve an understanding on the nature of an Israeli-Palestinian land swap in preparation for Palestinian independence, would be an entirely useful development. It would be wrong to see this, in spite of its caveats and “temporary” nature, as a capitulation by the United States to Israel’s settlement agenda. On the contrary, if it is handled properly, it could be a creative solution to an extremely difficult hurdle that has to be overcome with considerable degrees of finesse and determination.

The Obama administration is to be encouraged in its efforts to find a solution that allows the parties to move into permanent status negotiations in a serious manner for the first time since January, 2001. Thus far, there is every indication that they are still serious about achieving this and not prepared to allow Netanyahu to simply dig his heels in and thwart the administration’s determination to find a way to move forward. The Obama administration appears to have developed a strategy that actually could work through a combination of a “temporary” settlement freeze followed by an understanding on permanent status border issues. Actually implementing it will be a tall order, but no one ever suggested that progress on Middle East peace would be easy or straightforward.