The Phantom Peace

By Sonja Karkar – Melbourne

The end of Ehud Olmert’s Israeli Prime Ministership should see the likely new leader Tzipi Livni continue peace talks with the Palestinian Authority. She will have a difficult time. The illegal settlement movement supported by every Israeli administration to date has burgeoned out-of-control and its right-wing leaders are vehemently opposed to negotiating land for peace. More than likely, we will see Livni use the same stalling tactics that have up until now allowed land grabs from the Palestinians for the Zionist dream of a greater Israel. After all, Livni was nurtured on that dream. What that means is a fifteen-year peace process ominously poised for failure – not just politically, but economically.

The 1993 Oslo Peace Accords were supposed to offer the Palestinians the political freedom and economic independence to which they have always been entitled.  Since then, Palestinian society has been taken on a rollercoaster ride of promises, lies, provocations and chaos with not a single benefit to show for its painful concessions. 

So much has been made of Oslo’s promise of new beginnings when in actual fact the real historic moment of peace occurred when Palestinian Chairman Arafat agreed to a two-state solution at the UN General Assembly in 1988, accepting on behalf of his people, Israel’s “right to exist” on 78 percent of the land stolen from them. That was the hard-won chance for resolving the conflict that Israel should have grasped with both hands. However, Israel was never going to let go its dreams of taking all of the land, and the Oslo Accords and every renewed peace process since then, have simply paid lip-service to Palestinian aspirations while Israel has pursued its own objectives in defiance of international law.

Powerful Israeli interests, and not Arafat’s intransigence or Palestinian terrorism, have caused Oslo’s failures. From the beginning, Israel and the World Bank violated the economic clauses of the Accords supposedly designed to improve and stimulate recovery from the disastrous circumstances that had already been visited on the Palestinians by Israel’s military assaults and occupation in the previous decades. As the Harvard University political economist Dr Sara Roy points out, “decades of expropriation and deinstitutionalisation had long ago robbed Palestine of its potential for development, ensuring that no viable economic (and hence political structure) could emerge.” (1) And, a viable Palestinian economy is essential for the functioning of an independent Palestinian state.

No sooner had control of Oslo’s economic development programs shifted to the World Bank, than the basic infrastructure that was supposed to have been built was reported as “repairs” to infrastructure when none in fact existed, while the building of a casino in Jericho took precedence over essential ports, roads and canals. As Israel’s major newspaper Haaretz reported earlier this year, “the casino was one of the most corruption-laden aspects of the Oslo Accords”. (2) Those who were involved reads like a Who’s Who of the Israeli political establishment – Prime Minister Ehud Olmert, former Primer Ministers Netanyahu and Sharon, Minister Avigdor Lieberman and Sharon’s advisor Dov Weissglas in concert with an Austrian-Jewish businessman Martin Schlaff who is now being investigated for giving millions of dollars in bribes to Lieberman and Sharon.

The “Gaza and Jericho First” stage of the Oslo Accords, provided the perfect opportunity for gambling tycoons to by-pass Israel where gambling is illegal. The casino took in around a million dollars a day from Israelis streaming into Occupied Jericho for the pleasure of gambling while the Palestinians were barely able to put food on the table. When the Gaza airport and seaport were finally built due to European Union efforts along with roads, waterways and the Palestinian broadcasting station, Israel set about destroying each of them citing security reasons.  Conservatively, Israel’s destruction of infrastructure from 1994-1999 has been estimated at $3.5 billion, whilst lost potential income for the Palestinian economy has been estimated at around $6.4 billion, the total loss far exceeding the overall international assistance received by the Palestinian people during those years. (3)

The deliberate pauperisation of the Palestinian economy was further exacerbated by the punitive closure of Palestinian society. A complicated system of checkpoints and roadblocks severely restricted the movement of Palestinians and goods and prevented Palestinians from travelling to Israel for work. Unemployment hit record highs going from less than 7 percent before 1993 to 25 percent in the West Bank and 38 percent in Gaza in the first quarter of 1996. (4) What is not widely known is that Israel had created a Palestinian economy deeply dependent on its own during the previous 30 years, which meant that closure was now far more devastating than it would have been otherwise. 

As the living standards plummeted and destitution pervaded every level of Palestinian society, Palestinians reacted angrily. But, Palestinian violence was not wholesale. Subjected to a barrage of provocations, minority groups and traumatised individuals committed most of the violence with homemade weapons. One of those early provocations was the terrorist attack and killing of 50 praying Palestinians in a Hebron mosque by right-wing extremist Baruch Goldstein who is today venerated by the Kach settler movement to which he belonged. Nevertheless, Israel launched reprisals each time against the entire Palestinian population – almost half under the age of 15 – using the powerful force of its military arsenal in defiance of international law, which prohibits collective punishment. Even so, international public opinion has not been swayed, then or now, by the non-violent efforts of Palestinian resistance carried out weekly by community groups in towns and villages all over the West Bank.  Instead, it remains fixated on Palestinian armed attacks and suicide bombings without any regard for the disintegration of Palestinian society under Israel’s humiliating control and human rights abuses. 

By 2000, the Palestinians were highly charged, especially after Arafat was derided for refusing to negotiate “peace” when he walked away from Barak’s much-lauded “generous” offer at Camp David. Concessions on Jerusalem and the Palestinian right of return were not his alone to make and Barak knew it. To bolster his own political ambitions, Barak was able to persuade the public that Arafat had pre-planned the Second Intifada while negotiating peace and had sought to destroy Israel through the return of millions of refugees. Israeli researchers though have shown that the heads of Israel’s Military Intelligence and the Shin Bet security service dismissed the existence of any such plan and that Israeli public opinion – hitherto ready for territorial concessions even during periods of violence – had been manipulated by Barak to accept that Palestinians had chosen terror instead of peace to achieve their objectives. (5)

At the same time, Israel increased its settlement expansion in the Occupied Palestinian territories, in spite of the Oslo Accords prohibiting “any change in the status of the West Bank…” Throughout the last fifteen years, successive Israeli governments have all continued to build these illegal housing estates for waves of Jewish settlers from abroad while the Palestinians are being pushed into arid areas creating a series of disconnected Bantustans much like what was created in Apartheid South Africa. Despite Israeli-only roads, concrete walls, electric fencing and military zones separating the two peoples, Israel promotes these modern housing estates as “normal” developments. In effect, it has forced the Palestinians into a system of complete dependency where Israel controls all borders, Gaza’s territorial waters and 80% of all the water resources.

Prevented from producing and competing with Israel’s economy, the Palestinians became forced consumers and this is perpetuated by foreign aid. Effectively international donors foot the bill while Israeli companies reap the profits out of the desperate need of an entire population under Israel’s occupation. Foreign aid has done nothing to revitalise the economy, and has only made the Palestinians one of the most aid-dependent populations in the world. According to the latest World Bank report, “aid and reform are unlikely to revive the Palestinian economy unless Israel removes economic restrictions at the same time”. (6) Even so, with a staggering 98 percent of Gaza’s industry now inactive due to Israel’s punitive sanctions, (7) removing those restrictions will not bring about economic recovery any time soon, if at all. The magnitude of social destruction is incomprehensible as 1.4 million people grapple with failing sewers, sewage-polluted water, rationed food, practically no electricity or fuel and a crumbling infrastructure of roads, schools, hospitals, transport system and other normal municipal services. This systematic “de-development” is spiralling into an unprecedented humanitarian crisis likely to have grave political consequences.

Today, Israel will cite the demographic problem it faces with a Palestinian population fast catching up in size to the Israeli population. It is a problem of Israel’s making and one that it could solve tomorrow if it was not moving systematically and determinedly to expand its territory and fulfil its colonial ambitions for a Greater Israel. It will not be long before the 4 million Palestinians being herded into reservations will be as much a problem for Israel to police as it will be for the Palestinians to endure. The word apartheid looms large. If comparisons begin to be made with Apartheid South Africa, Israel will have to justify its existence as an exclusively Jewish state under a whole new set of rules. Thus, the more it normalises its current position and keeps talking about peace, the less likely there is of that happening. Once the Palestinians are crushed economically, they will have few choices left: it will be slave labour in the industrial estates now being built or transfer if they survive. With time, Palestinians will simply vanish into the ether as if they never existed. That is the truth that is being silenced and that is a narrative that the public needs to hear.

– Sonja Karkar is affiliated with Women for Palestine, Melbourne – Australia. She contributed this article to


[1] Roy, Sara, A Dubai on the Mediterranean, London Review of Books, 3 November 2005
[2] Halevi, Ezra, Expose links Olmert, Lieberman and Sharon to Jericho
Casino, Israel National News, 13 October 2008,
 [3] United Nations General Assembly, Report of the Secretary General; A/60/90, 14 November 2005, (d) Assistance to the Palestinian people – Mr Mansour (Palestine)
[4] Farsakh, Leila, Economic Viability of a Palestinian State in the West Bank and Gaza Strip: Is it possible without Territorial Integrity and Sovereignty? The MIT
Electronic Journal of Middle East Studies, 2001
[5] Siegman, Henry, ³Sharon and the Future of Palestine², The New York Review of Books, Vol 51, No 19, December 2004
[6] World Bank. Palestinian Economic Prospects: Aid, Access and Reform, 22 September 2008, p.12
[7] Ibid, p.8

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