During her near-monthly visits to Israel to push forward the Annapolis process, Rice has weathered continued setbacks, and there is now a growing realization among all sides that a U.S.-brokered agreement will not be reached before President George W. Bush's term expires in January 2009.
The question now is what to do next, and how to contain the damage.
While the crisis in Gaza and violence along its border with Israel continue to dominate headlines, it is the changing facts on the ground—settlement outposts in the West Bank considered illegal under Israeli and international law—that pose the greatest challenge to the comprehensive two-state deal currently being negotiated.
"[Keeping the two-state solution alive] means saying it's all about settlements, it's all about not further eroding the situation in the territories, not further allowing the creation of an infrastructure of occupation," said former Israeli peace negotiator Daniel Levy during a panel on Capitol Hill Monday sponsored by the think tank New America Foundation.
"To the extent to which [a shelf agreement] is still part of the narrative of this administration, that is what should actually be shelved," he said, adding that Bush's vision was "not doable nor desirable" in the present political climate.
If successful, the Annapolis plan would make Israel and a "reformed" Palestinian leadership agree to a "roadmap" for peace—a "shelf agreement" outlining two separate, contiguous Israeli and Palestinians states, living side-by-side.
Failure to reach a deal would, as Israeli Prime Minister Ehud Olmert warned, lead to the end of a two-state solution: "If the day comes when the two-state solution collapses ... and we face a South African-style struggle for equal voting rights [also for the Palestinians in the territories], then, as soon as that happens, the State of Israel is finished."
Bush's roadmap for the Middle East requires Israel to freeze settlement activity in return for an end to Palestinian attacks. But since the Annapolis meeting in late 2007, 1,900 new settlements have been slated for construction, a record number for the last 10 years, according to an April report from the Israeli advocacy group Peace Now. Freedom of Palestinian movement has been curbed, and the number of checkpoints has increased from 521 to 607. During the same period of time, the number of attacks on Israel has increased by 300 percent.
"If you want to keep building settlements, you continue to build the wall," said Mustafa Bargouti, a former presidential candidate and minister in the short-lived Palestinian Unity Government, referring to Israel's security fence, a 25-foot-tall barrier that separates Israel from parts of the West Bank and is considered illegal under international law.
"But there will be no Palestinian state, that is the reality," he continued, "not a contiguous entity that could survive, but something that looks like clusters of ghettos."
"The only other map that looks like this is the map of Bantustan in South Africa during the apartheid system," he said. "They had governments in Bantustan. They even had a king."
Despite Palestinian President Mahmoud Abbas' strong condemnations and the threat of eroding confidence on the ground, Washington and Olmert have done little to halt the construction of settlements.
Olmert, tainted by corruption scandals, hostage to a fragile political coalition, and focused on the daily barrage of rockets from Gaza and Israeli reprisal raids, has been unable—or unwilling—to take the initiative on the Israeli side.
The settlement movement has integrated itself into the Israeli bureaucracy to the extent that the long-term impact of expansion is often ignored, or forfeited, in Israel's domestic political arena, said Levy.
"What does it matter if we add a thousand units tomorrow, we're negotiating the final borders, and we're trying to keep our political coalition together, and you know how hard it is," he said, repeating what he described as a common Israeli government explanation. Placing too much emphasis on the day-to-day problems, he said, causes the type of paralysis that is being witnessed today.
"The consequence of this, the product has been neither a peace deal nor an ability to manage the situation on the ground, and constant erosion on the two-state solution," he said.
The U.S. ability to manage the process and its unfolding consequences has also deteriorated, as the administration continues wars on fronts in Iraq and Afghanistan. If Lebanon is Washington's sideshow and Iraq is the show-stopper, then resolving the Israeli-Palestinian dispute was meant to be Bush's swan song.
Aaron David Miller, a former advisor to six different U.S. secretaries of state, said the Bush administration's final adventure in transformative diplomacy comes too little too late, and occurs in a "negative" atmosphere where the political realities cannot support an agreement to settle all claims.
"Neither side is prepared to pay the price for what an agreement would cost," said Miller, adding that this time, the cost of failure to U.S. interests is greater.
"The U.S is like some modern-day Gulliver, wandering around the region, tied up in knots of its own making," he said. "Clinton stumbled badly, and for eight years under Bush, we stumbled galactically," he continued. "If you cannot help to make peace in a credible way, what kind of great power are you really?"
For Levy, what he describes as the inevitable decline in U.S. hegemony is a reality. As it ebbs, so too does the hope of a two-state solution. For some continuity to exist in the handover of power from one administration to the next, some of the content from the Annapolis process should be "locked into place," and if a deal is to be struck, it should come sooner rather than later.
"As Israelis," he said, "we have fundamental interests in locking in permanent borders that are recognized by the entire region while American power is still such that it can help us achieve that."
Khody Akhavi writes for the Inter Press Service.
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