A number of observers have noted recently the progress being made in the West Bank under the premiership of a former economist at the International Monetary Fund (IMF), Salam Fayyad. This situation has been laid out notably by Robert Danin in A Third Way to Palestine (Foreign Affairs, January-February 2011, pp. 94-109).
The progress is indeed impressive. Official IMF figures show growth in the West Bank of 8.5 per cent for 2009 and more than 11 per cent for the first half of 2010. Unemployment has been reduced by nearly a third, and infrastructure projects (in health, education, and road- building) have increased markedly.
Equally impressively, Fayyad has restored order, the latter having been accomplished by a Palestinian security force trained in Jordan, with the support of the U.S. under General Keith Dayton, who however is no longer there, and with the approval of the Israelis.
But here's the problem: the West Bank government of Salam Fayyad has control over only 40 per cent of the West Bank. The remaining 60 per cent, the so-called "Area C", is under exclusive Israeli control. Nevertheless, Fayyad has stated that the Palestinian state must include the entire West Bank, Gaza and East Jerusalem, in other words, the borders of 1967 before the Six Day War (presumably with equitable land swaps to incorporate those settlements close to the Border (the Green Line) into Israel).
It would seem very doubtful that the Israeli Government would agree to Fayyad's terms for a peace settlement, especially given the Israelis' intransigence in the face of the Palestinians' flexibility in the 2008 negotiations, as revealed by al-Jazeera earlier this week. The Israelis, then, might continue to stall and feint, paying occasional lip-service to the idea of a two-state solution while letting the 40 per cent of the West Bank continue to develop. Such a situation would prevent Israel from becoming an Arab-majority state faced with the dilemma of remaining Jewish and also remaining democratic.
Instead of a two-state solution, which Mr. Netanyahu has only reluctantly endorsed, a one-and-a-half state solution, if you will, may well be the Israeli end-game, in that it may be as far as Israel would be prepared to go. However, it would not give Israel the international legitimacy it seeks. And it could well bring on a third Arab uprising (intifada).
Charles G. Cogan was the chief of the Near East and South Asia Division in the Directorate of Operations of the CIA from August 1979 to August 1984. He is currently an Associate at the Belfer Center for Science and International Affairs at Harvard's Kennedy School.