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The Negotiator: how to achieve peace “tomorrow” in Israel-Palestine

Why Palestine’s UN statehood quest will fail.

grievances — ranging from the humiliation of Arabs at the hands of European colonialists to the legacy of genocide against the Jews during World War II. Given the extreme emotions, and that any solution to the crisis is likely to leave both groups disgruntled, how do you handle a negotiation like this?

First of all, they're negotiating over the wrong things. They're trying to fight over the past, which can't be changed, when what they need to do is add value to the future. They need to get this out of the political sphere, and into the economic sphere.

Politicians get people emotional, which means they don't focus on their goals, and they're not achieving what people really need: healthcare, education, housing, and a better life. I once asked a Jordanian how he felt about the Middle East crisis, and he said “I'm in the 'I feed my family' party. I'm in the 'healthcare for my children' party.” That's the stuff that's important, not the controversy the politicians and media are focused on.

The people on the ground — the Palestinians and some Israelis — need a better economic situation. The way to achieve peace is to build factories that have Israelis and Palestinians working together. There are hundreds of thousands of Israelis and Arabs working together in Israel — so in fact, there's already peace in the Middle East. They're the people who should be negotiating with each other. They already know how to do it.

One of the reasons why economic development is not spreading to the whole region is because they're doing Mickey Mouse kinds of industries, like sun-dried tomato exports. They need to pick some export with high torque, like pharmaceuticals, like Dead Sea minerals, something that employs a lot of people with a lot of international visibility.

Jordan has more than 30 pharmaceutical firms that are pretty vigorous. Israel has Teva, which is a major world pharmaceutical player. Why can't they build a factory on the West Bank or near East Jerusalem that employs Arabs and Jews to make pills? It's not rocket science. That is an economic solution. They need to start small, they need to be incremental and scale themselves up.

One of the constant problems with the Israeli-Palestinian crisis is that you have extremists on both sides — ultra-conservative Jews who won’t compromise and who see West Bank settlements as a God-given right, and people who resort to terrorism on the Palestinian side. Twice, after peace accords were signed, domestic opponents have assassinated the leaders who crafted them — in 1981 Egypt’s Anwar al-Sadat was killed by fundamentalist Egyptian soldiers, and in 1995 Israel’s Yitzhak Rabin was shot by a right-wing Israeli opposed to the Oslo Accords. How should both sides deal with this?

In my view, the government's role should be to put the moderates together on both sides. That gives the whole situation a lot more legitimacy. They will work things out, especially if you have Arabs and Jews together in the workplace and in living areas.

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When people are working and living together, when they share interests and assets, if the extremists want to start disrupting things they will have to kill people on both sides — including their own people. That puts the moderates squarely against the extremists, and the extremists will fall under their own weight.

Palestinian Prime Minister Salam Fayad is in a very tight spot at the moment. A former IMF official widely respected in the West, he came to power with the promise of getting the Palestinian economy in shape, and attracting additional donations. Yet the territory is facing one of its worst-ever financial crises. Meanwhile, the Palestinian effort to get the United Nations to recognize its statehood is alienating donors, making the situation inside the country more difficult.

The U.S., which insists that Palestinian statehood should emerge through a negotiated settlement, has threatened to cut off aid, which currently amounts to about 1