A reader takes issue with my encouragement of efforts to promote investment in Palestine when I wrote that “it would not be at all inconsistent with the imperative of transforming the Israeli-Palestinian dynamic into a win-win equation in which what is good for Palestinians does not threaten Israel and vice versa." He points out that “what is good for Palestine does in fact threaten Israel, or at least some of the benefits it currently enjoys. The occupation is not a series of fumbling, short-sighted errors; it is the result of a deliberate policy to increase the totality of material goods for Israel, water and land, for starters. How is it not a huge problem for Israel to cede these resources to their rightful owners?”

Of course if Israel could come up with a workable solution that would allow it to completely annex all of the occupied territories, it would do, and already have done, so. But the fact is that the occupation is completely unworkable and untenable. No amount of brutality has broken the Palestinian will to resist, and the international community has remained steadfast in refusing to recognize the legitimacy of the occupation or Israel’s maximalist claims on Palestinian lands. Indeed, resistance of all forms to the occupation has only intensified over the years, not diminished. There is no constituency in Israel that embraces the status quo as workable or acceptable. The reality is that ending the occupation is the only way for Israel as a whole to achieve its fundamental national interest of peace, security and generalized acceptance and diplomatic normalization in the Middle East. The alternative is endless war, bloody occupation and continued illegitimacy in the eyes of the rest of the peoples and most of the states of the Middle East. There is no doubt a powerful collection of constituencies in Israel that have a vested personal and economic interest in maintaining the occupation, but the broader interests of the state and society require that the national interests trump the special interests. If the Israelis follow their manifest self-interest, they will agree to end the occupation. Of course, societies sometimes refuse to follow their manifest of interests and engage in self-destructive behaviors over long periods of time, sometimes until it is too late. Both Israelis and Palestinians face this choice, and it’s up to all of us to help both of them make the painful but rational decision on a compromise that no one will like but both parties can live with. The essence of this is ending the occupation.

The reader further points out that, “while I agree in the abstract that building Palestinian infrastructure would be a terrific immediate-term goal, how on earth do you suppose one could interest investors in a place where the transport of goods and the reliability of services depends upon the whims of hostile IDF teenagers carrying out the wishes of a expansionist government?”

Here we have a really important observation and a serious objection. The reader is absolutely right: serious economic development, in the long run, is absolutely impossible under conditions of occupation. In particular, even limited economic development and institution building efforts depend on access and freedom of movement, which the occupation has specialized in constricting in a most outrageous manner. I certainly think Palestinians should follow the lead of Salam Fayyad in his constructive suggestion that they focus on building state institutions, insofar as possible, in preparation for statehood. However, the reader is correct that economic development in particular, and even institution building, are seriously impeded by the nature and the reality of the occupation. For this reason, economic development and institution building are not and cannot be a substitute for serious diplomatic efforts and real political progress. This is why Netanyahu’s initial proposals when he recently resumed the position of prime minister about “economic peace,” whatever that means, as opposed to a political peace were utterly ludicrous.

On the other hand, this doesn’t mean investment or limited degrees of economic development are impossible, even under current conditions. There have been successful efforts at both, and what is crucial is that the political process quickly yields greater access and freedom of movement for Palestinians that can allow them to move forward with economic development, understanding that a full program depends on independence. Wages in the West Bank are reported up by 24% in the past year, and unemployment is down, although the PA is undergoing a financial crisis due to the failure of international and Arab donors to meet their pledges to the Palestinians.

One of the developments that has allowed promising economic activity to proceed in the West Bank in recent months has been the creation of the new professional Palestinian security forces, much maligned in some quarters, but by almost all accounts successful in restoring law and order to cities like Jenin and Nablus and in helping to ease the pressure of occupation forces on the Palestinian population. Developments such as the new Herbawi department store in Jenin reflect what some, probably exaggeratedly, call an "economic boom” in the West Bank. But it does show that improvements in living conditions and economic activity are possible with improved security, and insofar as a dynamic political process can increase access and freedom of movement leading to real independence, investment and economic development in Palestine are by no means preposterous fantasies.