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Palestinian Authority President Mahmoud Abbas has now accepted “proximity negotiations” under American pressure, amid reports that the Israeli government has quietly frozen housing construction in East Jerusalem. Evidently the Obama administration wants to put something resembling a Palestinian State into place at the earliest opportunity. It is not clear how this might occcur however, given the continuing split between Hamas-controlled Gaza and the West Bank, where American-sponsored security forces and the Israeli Army keep the Palestine Authority in power even as its own political and military power base decays. In effect, the US is propping up a fourth state in the Middle East, after Iraq, Afghanistan and Lebanon.

Unilateral declaration of a state is one possibility. NATO troops will be the key to propping up a rump Palestinian state ruled by the head of a party that polled just 2 percent of the vote in the last elections, according to Palestinian Authority President Mahmoud Abbas. Perhaps American troops leaving Iraq could stop over in the West Bank as Iraq crumbles into Iranian-managed chaos.

Prime Minister Salam Fayyad meanwhile is stumping the West Bank to win support for a plan to declare a Palestinian State on the West Bank territory that the Palestine Authority presently controls should negotiations fail with Israel. Abbas has said he opposes a unilateral declaration of independence. He has good reason to do so.

Israeli analysts point out that in many respects the proposal is silly: the Palestine Authority relies on the Israelis to collect Value Added Tax on transactions in its own territory, which, after $1.8 billion in annual foreign aid, is the PA’s main source of revenue. Avi Trengo suggested today in Ynet news that if the PA really wants a state, it should show that it can run the most elementary functions of a state:

1. The Palestinians should immediately embark on steps towards issuing an independent Palestinian currency and make sure to stabilize it. The usage of the Israeli shekel in Palestinian territories will be annulled in August 2011 – the date Fayyad set for “independence.”

2. The PA should compensate Israel for the damages caused by the former’s actions (damaging the fence) and by Palestinian criminal activity (car theft, medicine theft, and agricultural theft.)

3. The Palestinian Customs Authority should collect on its own, and without Israel’s help, the added-value tax and other taxes currently collected on its behalf by the Israeli government. No longer will we see the monthly transfer of VAT funds. You want independence? It’s all yours. Once Fayyad’s customs officials engage in collecting taxes, they will have no more time for the new job he found for them: Destroying Israeli goods imported into the PA.

The West Bank Palestinians rely on Israeli economic infrastructure, and a combination of American and Israeli military backing.


The trouble, as Jerusalem Post columnist Jonathan Spyer observes, is that the Palestinians are farther than ever from reconciliation between Hamas and the PA. Hamas has become entirely dependent on Iranian support to maintain its rule in Gaza, and unpopular, American-imposed leaders in the West Bank rely on American-directed security forces.
The result is that Palestinian politics has been thoroughly penetrated by the larger regional standoff. Each of the regional blocs has its own Palestinian authority, which acts as a laboratory and advertisement for its preferred methods. The Gaza version favors strict Islamic governance and armed struggle to the end against Israel. The Ramallah government – according to Sayigh the less representative of the two – stands for alignment with the West and proclaimed acceptance of a negotiated solution.

The Obama administration’s attempt to erect yet another Potemkin Village in the Middle East just as some of the others (notably Iraq) come down does not appear likely to succeed.


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