For Middle East peace, think small

By Michael Singh

When it comes to the Middle East, American presidents like to think big, and President Obama is no exception. His agenda for the region, at the outset, included ending thirty years of enmity between the U.S. and Iran, reviving American popularity amongst Arabs and Muslims, and resolving the Arab-Israeli conflict. Such big thinking is laudable (if not necessarily pragmatic), given the Middle East's increasingly prominent role in U.S. national security. When it comes to that last agenda item, however -- Arab-Israeli peace -- the President would be better served to think small. An opportunity exists to achieve progress between the Israelis and Palestinians, but it is a modest one, and the surest way to quash it is to overreach.

Despite Obama's talk at the White House press conference following Israeli Prime Minister Benjamin Netanyahu's May 18 visit of a "historic opportunity" for peace, he surely understands that the odds are currently stacked against such progress. Hamas remains firmly in control of Gaza, and there are few prospects for dislodging, defeating, or taming the militant Islamist organization. Palestinian Authority President Mahmoud Abbas appears likely to postpone presidential elections, and enjoys mixed support at best from his constituents. Netanyahu heads a right-wing coalition that may not support far-reaching peace talks. Further afield, Hizballah continues to rearm, a jumpy Iranian regime continues its march toward nuclear weapons, and Arab states are not, for the most part, forthcoming with outreach to Israel or financial assistance to the Palestinians.

Adding to these obstacles, relations between the U.S. and Israel have suffered, and the peace process itself has entered a diplomatic cul-de-sac over the otherwise peripheral issue of "natural growth" in West Bank settlements. With both Jerusalem and Washington staking out inflexible positions on the issue, it will take exceptional creativity on the part of special envoy George Mitchell to craft a compromise that neither undercuts Netanyahu politically nor tarnishes U.S. credibility with the Palestinians and Arab states. Far from eliciting support in the region or enhancing the American position as an "honest broker," the prolonged dispute has hardened the positions of Palestinians and Arab states, and undermined American reliability in Israeli eyes.

Amid these disheartening developments, however, are some areas of remarkable progress that suggest a way forward. According to Quartet envoy Tony Blair, Israeli and Palestinian officials have continued to cooperate on economic and security projects despite the freeze in political negotiations. And Netanyahu, who came to office speaking of economic progress with the Palestinians and improving the quality of life in the West Bank, appears to be following through on those promises. Checkpoints are being removed in the West Bank, economic activity is increasing (the IMF has predicted growth of 7 percent this year in the West Bank economy), and security is improving in many Palestinian cities. Added to these hopeful signs is the courageous message of outreach to Israel by Bahrain's Crown Prince Salman last week.

These "on-the-ground" developments are hardly peripheral to the peace process. The premise of the process launched at Annapolis in November 2007 was that, while political negotiations must be pursued in earnest, economic cooperation, institution building, and security efforts must be conducted in parallel. There is no reason why the logic of this structure should not continue to hold today. While the economic and security progress in the West Bank cannot serve as a substitute for political negotiations, it can provide an exit from the current dispute that has prevented the resumption of those negotiations. The need to improve life and ensure security for residents of the West Bank is a rare area of agreement between Netanyahu and the Palestinian leadership of Abbas and Prime Minister Salam Fayyad, and the U.S. needs to take advantage of such convergences wherever they can be found.

To move forward, the U.S. should urge Netanyahu to flesh out his plans for "economic peace" with the Palestinians. It is likely that the resulting plan of action would find wide support among both Israelis and Palestinians, and provide an atmosphere in which the current unproductive confrontation over "natural growth" could give way to a narrower agreement restricting settlement activity, and perhaps even a resumption of peace talks. While it may be difficult to see through the fog of acrimony that has gathered over the peace process, Netanyahu's June 14 speech, while containing conditions unacceptable to the Palestinians, represents a watershed in that it is the first instance of a Likud Prime Minister accepting Palestinian statehood. This means that all three major political parties in Israel -- Labor, Kadima, and Likud -- accept the fundamental premise of the peace process, as does the Palestinian Authority. While this by no means suggests that Netanyahu and Abbas -- unlikely partners for peace -- will reach an agreement, it does provide hope that future movement in the peace process will be forwards, not backwards.

While not gripping stuff diplomatically, the importance of improving the quality of life, bolstering economic activity, and building accountable institutions in the West Bank cannot be overstated. These activities will build among both Palestinians and Israelis a constituency that will support the concessions ultimately necessary for a lasting peace. The greatest threat to capitalizing on this opportunity is that the U.S. will overlook it as it grasps for the brass ring of a final-status agreement, an effort that tends to crowd out all others due to its high consumption of diplomatic attention and energy. In this case, it is only by thinking small that the Obama Administration will achieve big things.