Israeli Prime Minister Binyamin Netanyahu touted economic development in the West Bank as the strategy to obtain a political resolution to the Israel-Palestinian conflict. By increasing the standard of living in the territories and focusing on economic stimulus, the peace process could progress even if political disputes, such as the status of Jerusalem, remain as significant hurdles. Economic cooperation between Israelis and Palestinians could develop the trust needed to overcome the disputes, according to the theory that economic peace would propel the peace process towards success.

Even though Netanyahu had not yet began his second term as Prime Minister, the Palestinian economy seemed to be improving, especially due to increased trade between Israel and the Palestinian Authority. According to a recent report from the Israel Tax Authority, Israel-PA trade rose to $19 billion shekels ($5 billion) in 2008, with approximately two-thirds of the funds resulting from local trade and the rest as a result of import-export initiatives. These figures indicate a 17-percent increase in trade between Israel and the PA in spite of the global economic crisis. Doron Arbel, head of the Israel Tax Authority’s Customs Department, told The Jerusalem Post:

“The most recent figures for 2008 show that the global economic crisis has not had a real impact on the Palestinian economy. Figures for the first half of this year point to a growing trend in commercial activity.”

The Israeli government released the figures to Israeli and Palestinian businessmen at a conference funded by the United States Agency for International Development.

Translating the positive economic developments into a viable peace process requires more effort than merely releasing some figures. The increased trade revenue must turn into tangible life improvements for the Palestinian people. In the past, corruption and embezzlement plagued the Palestinian Authority and the people received minimal benefits from an improved economy and international aid. If the Palestinian Authority can translate economic growth into improvements to the daily life of Palestinians, the current government could diminish the power of competing political parties (such as Hamas) and rally support for renewed peace negotiations.

Even though Netanyahu plans to commence a face-to-face dialogue with PA Chairman Mahmoud Abbas, the general attitude in Israel still reflects the belief that the Palestinians have no individual leader with the support of enough of the population to ensure security for Israel. Perhaps the continuation of an improved economy could bolster the domestic credibility of Abbas to actually lead the Palestinians towards statehood.

Photo taken from here.

Today’s State Department press briefing included a light quip at the expense of the Israeli-Palestinian conflict following questions regarding the recent political instability in Honduras. After a few minutes of back-and-forth, State Department Spokesman Ian Kelly and reporters had the following exchange:

QUESTION: Well, but by declaring it a military coup and, you know, taking other measures –
MR. KELLY: You’ve given up on me?
QUESTION: That’s fine.
QUESTION: — isn’t that convincing – isn’t that trying to get them to follow the way that you think is the best way forward? What is –
MR. KELLY: It’s not just what we think. It’s what the Organization of American States thinks.
QUESTION: Yeah, but a minute ago – I’m sorry, a minute ago, you said that you’re not going to determine what the best way forward is for them. I mean, it’s for them to decide.
MR. KELLY: Well, it is ultimately, but we still have our own opinion. And it’s not just our opinion. It’s the opinion of the region.
QUESTION: Can we move to an easier subject?
MR. KELLY: Is there an easier subject, Charlie?
QUESTION: Sure, the Israeli-Palestinian – how about the – (laughter) –
MR. KELLY: I’m going to say something that I’ve heard many spokesmen say –
QUESTION: How about the talks next week?
MR. KELLY: — in the past: I have nothing new for you on that.

Aside from the joke, the State Department did not release any details on upcoming meetings between Amb. George Mitchell and Israeli officials attempting to iron-out plans for peace negotiations.

Shabbat Shalom.

The latest issue of the City Journal includes an article on the unmatched economic and scientific accomplishments achieved by Israel in its short history. The high-tech industry dominates the Israeli economy and the author includes some interesting statistics regarding the country’s global standing in the technology sector. As of 2007, Israel houses more foreign NASDAQ-traded companies than any other country. Notably, the author writes:

“In under 25 years—starting from those first modest tax reforms of the mid-1980s—Israel has accomplished the most overwhelming transformation in the history of economics, from a nondescript laggard in the industrial world to a luminous first. Today, on a per-capita basis, Israelfar leads the world in research and technological creativity. Between 1991 and 2000, even before the big reform of 2005, Israel’s annual venture-capital outlays, nearly all private, rose nearly 60-fold, from $58 million to $3.3 billion; companies launched by Israeli venture funds rose from 100 to 800; and Israel’s information-technology revenues rose from $1.6 billion to $12.5 billion. By 1999, Israel ranked second only to the United States in invested private-equity capital as a share of GDP. And it led the world in the share of its growth attributable to high-tech ventures: 70 percent.”

As I previously posted on Israeli Independence Day, Israel accomplished far more in its short time than could ever be expected. If Israelis maintain the same curiosity, innovation, tenacity, and determination that the country’s founders exhibited, Israel will assuredly remain among the world’s high-tech leaders.

The new issue of Bitterlemons International includes two great articles on the relationship between Israel and Egypt. Egyptian President Hosni Mubarak touts his role in the peace process, negotiations for the return of abducted IDF soldier Gilad Shalit, and Palestinian reconcilliation. Moreover, as Mubarak faces growing opposition from the Muslim brotherhood, the Egyptian leader has cracked down on Muslim extremism, which includes preventing munition from reaching Hamas in the Gaza Strip through smuggling routes in the Sinai Penninsula.

Ashraf Khalil discusses factors revolving around the mutual interests between Israel and Egypt, even though Cairo may not always acknowledge the shared goals. To accentuate this point, Khalil writes:

“The Israelis like to call it the “cold peace”. The Egyptians would rather not call it anything at all because that would admit there’s actually something there to name.”

Egyptian officials have permitted various Israeli military operations without intentionally generating hype. The recent Israeli attack on a weapons convoy from Sudan used Egyptian airspace but did not generate a response from Egyptian officials. Similarly, IDF warships crossed the Suez Canal, including one submarine, to threaten Iran; Egyptian officials remained tight-lipped.

Another article from the recent Bitterlemons International issue questions the relationship between Israel and Egypt, describing recent cooperation as “episodic” and laden with “distrust.” The main factors hindering the alliance include the mistrust among the populations in both countries that still regard one another as enemies. Similarly, Egypt must refrain from alligning itslef too closely with Israel in order to retain standing in the Arab world. Similarly, the IDF has strenghtened its pressence in the north due to concerns regarding Hezbollah instead of increasing coordination efforts with the Egyptian military on mutual interests in the south. Amb. James Larocco includes a list of actions that both countries should undertake in order to strengthen their relationship and coordination towards issues of mutual concern. His list states:

“* The Israeli leadership must make clear that upgrading the security relationship with Egypt is a key short- and long-term national security priority, and be prepared to devote the necessary time and human resources on a sustained basis. There should be a holistic approach, starting with the leaders themselves but bringing together all elements at all levels, within and outside the government.
* The IDF should establish a true liaison office, in the Operations Directorate, headed by a flag-rank officer. That office should retain key staff as long as possible, allowing for the building and maintaining of personal and professional relationships with their Egyptian counterparts. If necessary, retired officers with existing ties should be brought into the office.
* Egypt should accept the institutionalization of military-to-military ties, especially between operational officers at all levels, recognizing this is not only key to building trust during a time of transition but is also essential for any prospect of achieving the longer-term goal of replicating what Israel has with Jordan: no demilitarized zone and no foreign forces.
* Egypt should be open to expanding bilateral intelligence cooperation, to include intelligence agencies that have a key role in the Sinai and other border areas.
* Israel should consider ways to ease the burden of Gaza on Egypt, perhaps through the establishment of a border crossing regime that ensures that Gazans have sustained access to needed goods and services. In exchange, Egypt must convincingly do all it can to stop smuggling of certain items into Gaza.
* Both sides should expand their dialogue on their shared border, with regular biannual meetings chaired by senior operational military leadership and quarterly meetings at the technical level.”

Last week, Egyptian President Hosni Mubarak masqueraded around Washington puffing up his chest as a major broker in the Middle East peace process. In interviews, he accentuated his role in attempting to forge an agreement to renew Israel-Palestinian peace talks, to secure the release of abducted IDF soldier GiladShalit, and broker reconciliation between Fatah and Hamas.

Mubarak intends on fixing the latter of these issues by this time next month.  The Egyptian leader gave an ultimatum to Fatah and Hamas officials to solve their dispute by September 25, according to reports. Because of the lack of Palestinian unity, PA officials repeatedly postponed elections until the groups come to a resolution. Furthermore, the peace process cannot effectively move forward until the Palestinians resolve their internal disputes in order to negotiate with one voice. Mubarak threatened to involve the Arab league in the event that no deal is reached regarding Fatah-Hamas reconciliation.

On Gilad Shilat, some reports indicate that Israeli and Hamas officials could reach a deal could shortly. Key Hamas officials travelled to Cairo for Egyptian-brokered negotiations, signalling a renewal in hope that the terror group will free Shalit in exchange for its prisoners held in Israel. Similarly, other reports suggested that the relocation by Israeli of a key prisoner represents preparations for a prisoner swap (see a previous blog entry). However, every few months similar reports arise with no results.

Up until now, all three initiatives pursued by Egypt have effectively failed. U.S. efforts to renew the Israel-Palestinian peace process seem on the verge of actualization. Freeing Gilad Shalit or achieving Palestinian unity may prove that Egyptian leverage is as strong as Mubarak claims.

Flag taken from IMEMC.

A conflict is escalating between Israel and its long time enemy Sweden…

What?!?!?!

A previously irrelevant Swedish newspaper published an article last week accusing the Israeli military of harvesting Palestinian organs. The Israeli government condemned the publication as antisemtic and requested an apology from the Swedish government alongside a formal censure of the article. Many Israelis contend that Israel’s “overreaction” to the article actually incited the only publicity for the article that would otherwise have disappeared quietly. The author of the article and the publication reject calls of antisemitism and stand by the story as accurate, citing unidentified wounds on Palestinian bodies. In some rare cases, IDF soldiers have violated human rights and performed heinous crimes against the Palestinians. I don’t think harvesting organs is one them.

The calls of antisemitism may prove accurate, however. Earlier this year, a group of religious Jews were arrested for harvesting human organs in New Jersey and selling them abroad for profit. Connecting the Israeli government to that horrible case raises the concern of an impression that all Jews conspire together, particularly to rule the world and make money.

One Israeli writes a satire for Ynet that accuses the Swedes of flavoring their salmon with fungus from the feet of fisherman. You may not laugh out loud from the satire, but I hope you chuckle at the organ harvesting circus.

A notable excerpt from the satire reads:

“In the 1950s, Bjorn revealed, Sweden faced a sharp decline in pickled salmon exports, mostly because of the growing competition against Norwegian salmon. Secret experiments and taste tests performed by Swedish scientists finally identified the secret ingredient that would give Swedish salmon the edge: One gram of fungus taken from human feet for every 100 grams of gravad lax.”

Photo taken from here.

The mediating role of the United States in the Israel-Palestine peace plan seems to -slowly- be picking up steam.

President Obama met with PA Chairman Mahmoud Abbas, Israeli Prime Minister Binyamin Netanyahu, and Egyptian President Hosni Mubarak. Following the latter meeting, Obama called Jordanian King Abdullah and now sent the U.S. regional envoy George Mitchell to meet with Netanyahu in London on Wednesday. The commotion around negotiations could represent a prelude to the unveiling in September at the United Nations of a comprehensive U.S. peace proposal. At Wednesday’s meeting, Mitchell could be ironing out the final details of the plan with the Israeli leader. Rumors of the peace plan’s release emerged following Mubarak’s visit in Washington. Notably, some reports indicate that the Israeli government agreed to a temporary settlement freeze that would exclude East Jerusalem construction. In another step indicating progress, Netanyahu seems willing to begin negotiations with Abbas as early as next month, the Israeli leader said in remarks at the weekly cabinet meeting.

State Department Spokesman Ian Kelly said the following about the Mitchell-Netanyahu meeting:

“Well, I think – you know that we have placed a very high priority on getting a comprehensive peace – comprehensive in the sense that we want a regional solution to the problem. And we wouldn’t want this solution to be based on a two-state solution. What we’re trying to do right now is we are trying to lay the foundation – or what George Mitchell is trying to do is lay the foundation that will lead to the resumption of meaningful negotiations. And this is part of that whole process. There have been some reports that we’re close to a breakthrough. I think I would say that – I would characterize it as that we’re getting closer to an agreement. But any reports that we’ve come to an agreement, or that we expect one on Wednesday necessarily, I would have to call premature.”

Moreover, the Palestinian leadership appears more invested in the current peace process than in previous negotiations. Palestinian Prime Minister Salaam Fayyad intends to release a 65-page document tomorrow that outlines a strategy to develop the West Bank into a sovereign nation. His plans, largely unrealistic, include the establishment of both an airport and railways that run between countries. In the past, Palestinian leadership focused on Israel, including a peace plan, the right of return, and the status of Jerusalem. The focus on Palestinian institutions indicates that Fayyad, while still urging negotiations with Israel, believes that it is about time for Palestinians to take responsibility for their own state. Fayyad maintains strong support from the West but faces increasing internal opposition, particularly from Hamas. Notably, Fayyad’s document states:

“The government will work on encouraging investment in Palestine through offering tax cuts to local and foreign investors (and) will review investment regulations and remove obstacles that hinder investment… Our national duty stipulates that we should do whatever we can to get our economy out of the cycle of dependency and alienation.”

Regardless of all the overtures from the United States, Israel, and the Arab world, significant hurdles in the peace process remain intact. Any agreement could quickly be torpedoed by extremist groups throughout the Middle East. Even with determination, compromise, and understanding by the region’s leaders, many other factors will influence the final outcome of negotiations that will lead towards an independent Palestinian state alongside a secure Israel or lead to total failure like previous peace processes.

Netanyahu and Mitchell photo from the Israeli government website.

Fayyad photo taken from Wikipedia.

Since the election of both President Barack Obama and Israeli Prime Minister Binyamin Netanyahu, the debate on the downfall of the Israel-U.S. alliance re received significant media attention. Particularly following the U.S. Administration’s insistence of an Israeli freeze on settlements, pundits heightened concerns that the strategic alliance between the two countries was reaching its end.

In an op-ed on Ynet News, Prof. Alon Ben-Meir outlines the reasons for a U.S. hard-line position on settlements. By pressuring Israel, Obama gains clout in the Arab world and can force concessions from the Netanyahu government on the peace process. However, in doing so, Obama alienated the Israeli public who, according to recent polls, do not consider the U.S. president a friend of Israel.

Ben-Meir wrote:

“Whereas it was critically important for the Obama administration to improve its relations with Arab states to regain its moral footing and influence, it absolutely cannot undermine the nature of US-Israeli special relations. This unique bond has offered successive American administrations a strong leverage with Israel, allowing it to exact important concessions in negotiations, as Clinton was able to do with Netanyahu in the Hebron agreement in 1997.

Although Arab states have in the past complained about American lack of evenhandedness, they understand that the US-Israeli relationship gives the American President a leverage to deliver for them. Any erosion of that relationship will create serious difficulties in future negotiations, as Obama is currently finding out for himself. The president must now correct that impression before he can move the peace process forward, restoring the trust and confidence of the Israeli people.”

The Israeli public generally considers former U.S. President George W. Bush to be among the strong allies of all time for the Jewish state. Using the ‘an enemy of my enemy is my friend’ logic, many Israelis praise Bush for attacking Saddam Hussein who was largely regarded as a major threat to Israel. Similarly, the Bush Administration seemed eager to attack Iran, a country that regularly threatens the Jewish state. The Bush Administration also launched the war on terror that bonded the two countries over the similar goals of thwarting Islamic extremism.

However, the U.S. military’s entrance into Iraq and the Bush Administration’s rhetoric against Islamic radicalism led to an increased negative perception of the United States in the Arab world. Until now, as favorable opinions of the United States increase in the Arab world, the positive perception of the U.S. Administration drops in Israel, and vice versa.

The catch-22 of the Middle East peace process is clear. The U.S. needs a strong relationship with both Israel and the Arab world in order to extract concessions from both parties on a peace process. However, any actions to strengthen one relationship often superficially diminishes the other.

One of the curve-balls in the logic, though, is the ’shared values’ between Israel and the United States. Both countries pride themselves on their democratic values and pursuit of freedom, although the Israeli government has some work to do in that arena. Regardless, the relationship between the two countries based on these values runs far deeper than any minor disagreements between two temporary administrations. U.S. clout and perception in Israel may temporarily diminish, but the overall partnership endures.

Photo taken from al-Arabiya.

Tomorrow marks the beginning of the Islamic holy month Ramadan when Muslims around the globe fast from dawn until dusk. In an effort to show respect for religious Muslims, IDF chief of staff Gabi Ashkenazi and Defense Minister Ehud Barak ordered soldiers to follow etiquette and refrain from eating, drinking, and smoking around Palestinians during the day. Muslims believe that God revealed the Koran to the Prophet Muhammed during this month.

The IDF also removed some restrictions on the West Bank during the month, including easing border restrictions to permit Arab-Israeli families who live on both sides of the separation wall to celebrate the holiday together. Moreover, to avoid any misunderstandings, the IDF notified its patrols that Palestinian children may be palling around with gun shaped toys and firecrackers during celebrations, particularly the Eid ul-Fitr feast that marks the end of the fasting period.

Photo taken from here.

Israeli military technology firm Rafael will sell the Indian army $1 billion worth of anti-aircraft systems with a range of 45 kilometers, making Israel the largest military supplier to India. The technology is capable of destroying aircraft, helicopters, and unmanned aerial vehicles. Last year, India bought $270 million worth of the technology. Previously, Russia provided the most military technology to India.

You might remember the Israeli firm from the following video that mimics Bollywood to make the sale.