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February, in short:

  • Netanyahu fights for his poilitical life in the shadow of legal woes and a dramatic merger in Israel's center.
  • Tensions mount on the Holy Esplanade, while Abbas rejects the transfer of all tax revenue funds from Israel folloiwng the latter's decision to withold $138 million.
  • America struggles to generate momentum for its peace plan, while dynamics in Washington shift.
  • The European Union and the Arab League meet in Egypt and reaffirm their support for the two-state solution.

These developments, as well as other events, ultimately moved the Two-State Index (TSI) up by 3.0%.

The full report is below.
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Israel’s attorney general announced his intent to indict Prime Minister Benjamin Netanyahu for bribery, fraud, and breach of trust. This development came days after his two main political opponents — Benny Gantz and Yair Lapid — joined forces to form a new party: Blue and White. Fear of losing votes of small parties that may not cross the 3.25% threshold motivated mergers on Israel’s extreme right when Netanyahu forged the merger of Jewish Home and Jewish Power. Separately, members of the Joint List made of mostly Palestinian citizens of Israel decided to run in two separate lists: Ta’al and Hadash in one, and Balad and Ma’am in another. Earlier in February, Tzipi Livni, Israel’s former foreign minster and chief negotiator in 2008 and 2013-14, quit the race and stepped back from political life, after her party — Hatnu’a — which repeatedly failed to cross the threshold in polls.

Polling conducted after the lists were finalized show some dramatic, if not decisive, turns. Blue and White lead Likud with an average of 37 to 29 seats, respectively. Not less important, the classic right/ultra-orthodox coalition now stands at 59 seats, short of able to form its own coalition. In response, Netanyahu — fighting for his political life — started a prolonged attack on Gantz, the media, and the legal system. Analysts point that the poll findings are not caused by a leftward shift of the electorate, but rather a result of two rightist parties — Avigdor Liberman’s Israel Beitenu and Orly Levi-Abekasis’s Gesher — failing to cross the 3.25% threshold. The coming week will demonstrate whether Netanyahu’s legal problems put Israel’s elections on a new vector or if his dominance over Israel’s political-media nexus remain Israel’s most viable candidate. With just over a month left to the elections, many things may change, but for the first time in years, Netanyahu’s rule seems vulnerable and uncertain. This moves the relevant parameters dealing with Israel’s leadership of prime minister, government, and legislature up to 4 from 3.
Notably, the Geneva Initiative conducted a
poll, cited in Israel’s press, showing moderate positions on the Palestinian issue by the Israeli public, and especially Gantz supporters. Since the publication of the poll, Labor highlighted its agenda on the Palestinian issue, including its plan to kick-start ‘separation’ from Palestinians, in the hope of moving voters its way. For a comprehensive overview of the Israeli elections in English, including poll averages, follow One Twenty — the election portal of Israel Policy Forum.

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Tensions mounted on the Holy Esplanade between the Israeli police and the newly expanded Waqf Council. Separately, Israel started implementing a law that requires it to withhold PA tax revenues and deduct roughly NIS 500 million ($138 million) from the total sum that it collects on behalf of the Palestinians. In response, PA President Mahmoud Abbas rejected the transfer of all tax revenue funds. The European Union raised concerns about Israel’s decision and the Palestinian reaction. Earlier this month, PLO Chairman Mahmoud Abbas embarked on an international tour in an attempt to galvanize response to the mounting pressure on the Palestinians and the forthcoming U.S. peace plan.

The dispute on Holy Esplanade surrounds the Bab al-Rahmeh building, to which Jews traditionally refer as the Gate of Mercy. Israel has restricted access to the building for over a decade. In response, the Palestinian Authority said it rejected the regular monthly tax transfer from Israel. The tensions in the Holy Esplanade have implications in three relevant realms: In regard to the site itself — a symbolic move by the Waqf Council compounded into what may become real change in Bab al-Rahmeh; at the very least, it will not be as restricted as it has been, and it will likely become an active site, perhaps even a mosque. In regard to East Jerusalem, the expanded Waqf Council is becoming an institute where Jordanian-PA cooperation can promote other issues pertaining to East Jerusalem, including land transactions. Regionally — the confrontation has both moved Jordan closer to the Palestinian Authority as well brought the forefront the crisis in Jordanian-Israeli relations that has been brewing since Netanyahu praised the security guard who killed two Jordanians in July 2017. These developments move the relevant Jerusalem parameters of Holy Sites and Palestinian Civil Life up to 6.
Israel claims that the deduction of tax revenues is due to the PA transfer in 2018 of the aforementioned sum to prisoners detained and to their families. Abbas’s rejection of all funds slated for transfer will likely increase his popularity among Palestinians for standing up to Israel and for caring for prisoners and their families. It puts significant pressure on Israel and its security apparatus, which wants the Palestinian Authority to accept funds and continue to function. In effect, Abbas forces Israel to either transfer the full funds or bring the Palestinian Authority to the verge of collapse, both of which are bad outcomes for the Israeli government, especially during an election season. The parameter measuring adherence to the Paris Agreement moves from 7 to 6. In the Palestinian Statebuilding category, which measures PA functioning in the West Bank, the two relevant parameters — Governance and Economy — inch down to an alarming 3 and 2, respectively. Still, Abbas’s new agency moves the parameter measuring the PLO Chairman from 5 to 6.

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Jared Kushner, the U.S. point man on Israeli-Palestinian peace, visited the Gulf in an attempt to galvanize support for the peace plan. In a rare interview to Sky News Arabia, Kushner said the peace plan will address all core issues of the Israeli-Palestinian conflict, including borders. Kushner noted the plan is based on four guiding principles: freedom, respect, opportunity, and security. “The goal of resolving these borders is really to eliminate the borders. If you can eliminate borders and have peace and less fear of terror, you could have freer flow of goods, freer flow of people and that would create a lot more opportunities,” he said. Both the Palestinians and Israel’s far-right rejected the plan.

Kushner’s remarks can be interpreted in contradictory ways that add to the ambiguity of America’s intentions. For example, eliminating borders could mean endorsement of land swaps from both sides of the 1967 lines, as traditional two-state models suggest (including the Geneva Initiative). It could also mean that traditional interpretation of the baseline for borders — the 1967 lines — should be substituted with a newly defined baseline: say, that the existence of settlements put all of Area C within legitimate Israeli demands. Kushner remarks come as political dynamics in Washington shift in a manner not seen in years. On the traditional pro-Israel front, both the AJC and AIPAC criticized the move of Jewish Power faction into the accepted realm of Israel’s politics. Meanwhile in the Democratic party, several developments brought to the fore the question of Israel in a forceful way: Democratic senators, including presidential aspirants, opposed legislation that aimed to target the BDS movement but infringed on free speech; Sen. Bernie Sanders, who shifted Democratic positions on many domestic issues in his 2016 primary race, declared he is running again (Sanders supports the two-state solution and does not shy away from criticizing Israel); another presidential candidate, Sen. Elizabeth Warren, criticized Netanyahu on the basis of corruption; finally, controversial comments by Rep. Ilhan Omar stimulated a lively discussion on the meaning of pro-Israel and about the influence of pro-Israel groups in Washington. American political discourse on the issue of Israel, and by extension Israel-Palestine, is reshaping in a way that can dramatically affect U.S. positions should a Democrat enter the White House in Jan. 2021. These developments move the United States parameter from 2 to 3.

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The European Union and the Arab League met in Egypt to discuss common challenges. In its summit declaration, they noted: “We reaffirmed our common positions on the Middle East Peace Process, including on the status of Jerusalem, and on the illegality under international law of Israeli settlements in the occupied Palestinian territories. We reiterated our commitment to reaching a two-state solution on the basis of all relevant UN resolutions, as the only realistic way to end the occupation that began in 1967, including of East Jerusalem, and to achieve a just, lasting and comprehensive peace between Israelis and Palestinians through direct negotiations between the parties that addresses all final status issues. We recalled the importance of upholding the historic status quo for the holy sites in Jerusalem, including with regard to the Custodianship of the Hashemite Kingdom of Jordan. We reaffirmed the indispensable role of UNRWA and the need to support it politically and financially in order to allow it to continue fulfilling its UN mandate. We expressed our concern about the humanitarian, political, security and economic situation in the Gaza Strip, and called for all parties to take immediate steps to produce a fundamental change to the better in full respect of international law, including human rights and humanitarian law, especially with respect to the protection of civilians.”

The EU-Arab League meeting reaffirms the high scores that both actors receive for their support of a two-state solution. Earlier in February, American, European, Arab and Israeli officials met for a summit on Middle East security intended to build an international coalition confronting Iran. A secondary agenda item focused on the prospective U.S. Israeli-Palestinian peace plan. During the summit, Netanyahu met with and sat alongside Arab leaders. See our full analysis in our Special Edition: The Arab World and the Peace Process.

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In additional developments this month:
The U.N. Human Rights Council commission that examined violence during the Gaza protests last year issued a report saying Israeli troops may have committed crimes against humanity in shooting unarmed civilians — including children — who posed no threat (see the full report here). Qatar warned Hamas that it will not extend payments for the Gaza’s electricity supply beyond April. The United States merged the activities of its Jerusalem consulate into its embassy building. Israel plans to cut the waiting time for Palestinians in East Jerusalem applying for Israeli citizenship (although the overwhelming majority of them do not seek citizenship). The European Union criticized the extension of Israel’s 18-year ban on Palestinian institutions in East Jerusalem. Israel said it will retroactively legalize settlement structures built in part on private Palestinian land, invoking, for the first time, a legal mechanism the attorney general approved in December. The European Union noted that in the second half of 2018 the settlement enterprise advanced at an unprecedented high level: more than 7,000 housing units in the West Bank (4,350) and East Jerusalem (2,900) were advanced in different stages of the planning and implementation process (tenders and plans). An analysis of 2018 found a sharp increase of Palestinian attacks in the Gaza Strip, while in the West Bank popular attacks generally decreased in volume. The United States blocked a draft U.N. Security Council statement that would have expressed regret at Israel’s decision to eject a foreign observer force from Hebron. Israel has begun constructing the overground portion of the Gaza barrier, with its western part planned to connect to the new sea barrier. A newly-declassified U.S. State Department report on UNRWA uncovered cases of anti-Israel and other bias in only 3.1% of Palestinian textbooks (see full report here). The PLO is gearing up for the first-ever census of Palestinian expatriates in the world.
TSI Trendlines: overall index and arenas
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Some recommended sources for additional information:

Analysis
Jerusalem and the 2019 Israeli Elections (introduction)
Summay by Terrestrial Jerusalem. Original publishing date February 28, 2019.
See full analysis
here.

In the past, Netanyahu has repeatedly used last-minute Jerusalem related events in order to energize his base. Under normal circumstances, the potential would be high for a Netanyahu-led inflammatory Jerusalem-related event – for example, a move to strengthen Israel’s control over or foothold within East Jerusalem, or in adjacent areas of the West Bank – in the weeks or days before election day (April 9).

But these are not normal circumstances. Today, both the current domestic political atmosphere in Israel and the current international political dynamics around the Israeli-Palestinian conflict, raise this risk of such a move by Netanyahu is many magnitudes higher.

Domestically, a few factors are pushing Netanyahu to make a move in and/or around Jerusalem: The [looming] indictment, political competition [among the right], and general misdirection in the Israeli-Palestinian arena and the prospects for violence.  In short, the potential for Netanyahu to make a significant and highly provocative move on Jerusalem before the election is high.

Internationally, the factors that militate against such a move by Netanyahu are not promising. Specifically, the United States is far less willing to elicit restraint and responsibility from Israel, the EU is fractured (but can act in unity of purpose under extreme circumstances), Israel-Arab rapprochement, and the general conclusion that there are few responsible adults left (anywhere), with little energy to engage.

On the eve of Israel’s national elections and the possible launching of Trump’s so-called “peace plan,” concerns raised in January 2017 regarding the most sensitive and ambitious settlement and settlement-related projects are more relevant than ever. The following four are those of the most urgent concern, which we believe are both the most likely and the most problematic actions that may be taken between now and election day: Khan al Ahmar, E1, Givat Hamatos, and the Temple Mount/Haram al-Sharif.


For the full analysis on Terrestrial Jerusalem’s website, click here.

The Two-State Index (TSI) is brought to you by the Geneva Initiative, a Palestinian-Israeli organization working to promote a negotiated peace agreement in the spirit of the two-state vision. The TSI is produced by an Israeli-Palestinian team, and reflects a unique bilateral perspective.
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