Last week, U.S. Ambassador to Israel Dan Shapiro caused a stir by ever-so-gently telling the truth about the occupation. Speaking to a conference at Tel Aviv’s respected Institute for National Security Studies, he addressed “the latest increase in tensions and violence between Israelis and Palestinians,” and observed, “Too many attacks on Palestinians lack a vigorous investigation or response by Israeli authorities; too much vigilantism goes unchecked; and at times there seem to be two standards of adherence to the rule of law: one for Israelis and another for Palestinians.”

The outraged reaction from Israeli officials—which included a demeaning slur against the American ambassador by a former Netanyahu aide, as well as Netanyahu himself trying to shame Shapiro by noting the recent murder of an Israeli woman whom Shapiro had actually memorialized in his speechwas as overwrought as it was predictable. The fact that Shapiro’s words of concern were far outnumbered by words of solidarity and support mattered little. It has been the policy of the Netanyahu government that even the most carefully worded public criticisms by its closest friends shall be treated as an attack on the very foundations of the state.

It is simply a matter of fact that Israelis and Palestinians in the West Bank live under two different systems of law—the former under Israeli civilian law, the latter under military law imposed after the territories were occupied in 1967. If an Israeli and Palestinian were to be arrested at the same spot in the West Bank at the same moment for the same crime, they would be subjected to two entirely different legal procedures, the former Israeli civil law and the latter military law. In this regard, it’s only Shapiro’s use of “seems” that seems a bit odd.

There’s also the less formal, but certainly no less real way in which the power of the state is used differently against both groups—or to be more accurate, how it is used for Israelis and against Palestinians, something that has been well documented by Israeli and Palestinian human rights groups. Israeli settlers are treated lightly because the system as a whole is designed to protect them and to facilitate the transfer of Palestinian property into their control.

“It is not just the official letter of the law that facilitates the settler land-grab, but the way in which it is implemented and enforced,” said Assaf Sharon, an assistant professor at Tel Aviv University and co-chair of Molad, a liberal Israeli think tank. “Susya (a village in the South Hebron Hills in the midst of a longstanding legal battle to prevent its demolition) is a good example: Palestinian shacks built by poor peasants who were forcibly evicted from their homes are being destroyed, although its indisputably their own land, and while their neighboring illegal outposts, some of which are on private Palestinian land, are growing unhindered.”

The uproar over Shapiro’s remark about double standards has overshadowed a broader critique embedded in his speech, however, one which the Obama Administration has been escalating over the past months: that under Netanyahu Israel has been engaged in a concerted effort to reverse the Oslo process in the West Bank.

Back in December, in remarks to the Brookings Institution’s Saban Forum, Secretary of State John Kerry toured the waterfront of the U.S.-Israel relationship, reiterating the U.S. commitment to Israel’s security amid a region in turmoil. While unequivocally condemning Palestinian violence, Kerry also noted, “Palestinian hopes are also being dashed by what they see happening every day. They’re focused on a reality that few others see, that the transition to greater Palestinian civil authority contemplated by the Oslo process has in many ways been reversed.” Kerry then got noticeably specific:

In fact, nearly all of Area C, which comprises 60 percent of the West Bank, is effectively restricted for any Palestinian development, much of it claimed for Israeli state land or for settlement councils. We understand there was only one Palestinian building permit granted for all of Area C all of last year. And settler outposts are regularly being legalized while demolition of the Palestinian structures is increasing. You get it? At the same time the settler population in the West Bank has increased by tens of thousands over just the past five years including many in remote areas.

“Settlements are absolutely no excuse for violence. No, they’re not. And we are clear about that,” Kerry went on. “But the continued settlement growth raises honest questions about Israel’s long-term intentions and will only make separating from the Palestinians much more difficult.”

U.N. Ambassador Samantha Power soon echoed Kerry’s analysis, in a speech to the Haaretz/New Israel Fund conference in New York later in December. Amid a speech that largely focused on the depth of support that Israel had received from the Obama Administration, Power referred back to Kerry’s Saban Forum speech and cautioned that continued settlement growth “raises honest questions about Israel’s long-term intentions and will only make separating from the Palestinians much more difficult.”

Shapiro also cited Kerry’s Saban speech and laid a similar critique, ending with the same question: “[We] are concerned and perplexed by Israel’s strategy on settlements. This government and previous Israeli governments have repeatedly expressed their support for a negotiated two-state solution—a solution that would involve both mutual recognition and separation. Yet separation will become more and more difficult if Israel plans to continue to expand the footprint of settlements,” he said. “Settler outposts are being legalized—despite earlier pledges to the United States not to do so—while routine, administrative demolition of Palestinian structures continues. Again, the question we ask is a simple one: What is Israel’s strategy?”

It is simply a matter of fact that Israelis and Palestinians in the West Bank live under two different systems of law—the former under Israeli civilian law, the latter under military law imposed after the territories were occupied in 1967.

This analysis—the Israelis are reversing Oslo—is one that I’d heard privately from multiple administration officials over the past year. But now that it’s finally been made publicly, the question is: What is the United States going to do about it?

For the moment, it appears that they’re going to let the European Union play bad cop. After bureaucratic discussions over set of possible sanctions—which were described in a leaked document in late 2014—dragged on for years, last November the E.U. finally issued new guidelines requiring that goods made in Israeli settlements be labeled as such. Though the step would have a minimal economic impact, the symbolic impact was considerable, and Israeli leaders reacted angrily.

Rather than back off, however, E.U. officials doubled down, issuing a declaration earlier this month reiterating their policy of differentiation between Israel and the occupied territories, and warning of “further action in order to protect the viability of the two-state solution, which is constantly eroded by new facts on the ground.”

While accusations from the Israeli right and their American allies that the United States was behind the E.U.’s moves are overblown, the Europeans wouldn’t move forward without being reasonably confident that the United States wouldn’t oppose them. When asked about the E.U. measures, U.S. spokespersons have consistently made clear that the United States considers such steps consistent with U.S. policy. In the language of international diplomacy, this is a green light.

While the new U.S. openness to such steps is welcomed, European analysts and officials I spoke to still wonder how far it will go and just how President Barack Obama will use his last year to address an issue to which he has committed so much time and effort. While other conflicts in the region have understandably pushed Israel-Palestine down the list of priorities, there’s still consensus among European governments that steps need to be taken to arrest the current deterioration in the status quo. The French, for their part, remain interested in a U.N. Security Council resolution laying out parameters of a final agreement, but have yet to receive a positive signal from the United States.

In a recent piece in Foreign Affairs, former U.S. Ambassador to Israel Dan Kurtzer suggested moves that the administration could make short of a U.N. resolution: ending the tax exemptions for private U.S. donations to settler groups, which essentially function as taxpayer subsidies to activities that run afoul of U.S. policy and, as a new report from Human Rights Watch shows, contribute to human rights abuses; and a dollar-for-dollar subtraction of any amount spent by Israel on settlement construction from U.S. aid to Israel. “These moves would have a significant political impact in Israel, as opponents of the settlements would use the change in U.S. policy to galvanize support for their views,” Kurtzer wrote. “The settlements represent a policy of choice, not of necessity, and will do little to guarantee Israel’s long-term security. It is long past time for the United States to match its words with deeds.”

While the domestic politics of the U.S.-Israel relationship might give the administration pause, especially in the midst of a presidential campaign, they might be able to expect some support from a surprising source: Israel’s security establishment, some of whose leading members have long warned that the occupation is a grave burden—and even an existential threat—to Israel. Speaking a few days after Shapiro at the INSS conference, Lt. Gen. Gadi Eizenkot, Israeli Defense Forces chief of staff, noted the difficulties. “There are 161 settlements in Judea and Samaria, about 400,000 residents living among 2 million Palestinians,” he said. “The populations are intermingled, which creates a huge operational challenge.”

Some Israelis are hopeful that U.S. steps to create consequences for the occupation could help shift the political landscape in Israel. Assaf Sharon noted that years of blocking such measures have in fact empowered Israel’s right wing. “As a patriotic Israeli its not my place to tell the [U.S.] administration what to do,” he says. “The administration’s official position is that it can’t interfere in Israeli politics, but when they shelter this extremist right-wing government from the consequences of its actions—for example by vetoing reasonable U.N. resolutions that many Israelis support—they are interfering, just for the wrong side.”

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