August, in short:

No movement on US peace plan: Decision to delay plan until after Israeli elections comes after critical reaction in the US to Israel’s barring of lawmakers
Violence in the West Bank and Gaza: Violent incidents on the rise in the West Bank along with infiltration attempts and rocket attacks from Gaza
Economic situation in the Palestinian Territories: New agreement with Israel on fuel tax provides PA with some relief from economic woes amid new worries over UNRWA
Settlement expansion continues: Israeli government advances thousands of West Bank settlement units and legalizes outposts
Temple Mount tensions: Clashes at the site followed by increased tensions between Israel and Jordan

These events moved the Two-State Index (TSI) up by 0.6% (up by 0.03 points from 5.43 in previous month).

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No developments on US Middle East plan, while Israeli action to bar congresswomen provokes criticism

US Middle East Envoy Jason Greenblatt announced on August 28 that no parts of the Trump administration’s plan would be released before Israel’s elections on September 17. US President Donald Trump had indicated that parts of the political portion of the plan may be released before Israel’s election, alongside reports that the administration was looking to convene a conference at Camp David. This fueled speculation that Trump may try to use the plan to assist Israeli Prime Minister Benjamin Netanyahu’s political fortunes. Meanwhile, in an August 26 meeting organized by the Geneva Initiative, the leaders of a group of Israeli civil society organizations, known as the Two-State Coalition, encouraged US ambassador to Israel David Friedman and the Trump administration to pursue a two-state solution.

In general, the lack of any movement on the administration’s plan continued in August, with no announcements by any Arab states to provide funding for the initiatives that were promoted at the Bahrain workshop in June. A trip by White House Senior Advisor Jared Kushner to the region in early August did not yield any discernible progress, with Egypt’s President Sisi and Jordan’s King Abdullah publicly reiterating their support for a two-state solution.

In the US, these events were largely overshadowed by the Israeli Interior Ministry’s determination on August 15 that U.S. members of congress Ilhan Omar and Rashida Tlaib would be refused entry to Israel, reversing an earlier decision. The move to bar the two lawmakers was justified by Netanyahu by their support for BDS (Boycott, Divestment, and Sanctions). It sparked outrage and criticism from Congress, a number of Democratic presidential candidates, and the majority of US Jewish organizations.

The increase in the willingness to publicly criticize Israel among US politicians and Jewish groups shifted the Third-Party Engagement parameter from 5 to 6. All other US-related parameters remained the same.

Lethal attacks on the rise in Gaza and the West Bank

August witnessed a significant escalation of violence in both Gaza and the West Bank. Along with the continuation of weekly Palestinian protests on Gaza’s border with Israel and a resumption in balloon arson attacks emanating from the Strip, there were a number of infiltration attempts by Gazan militants, as well as rocket and mortar attacks against Israel. In total, eight armed Gazans were killed by Israeli forces, and Israel responded to most of the rocket attacks with air strikes on Hamas posts.

At present, the extent of Hamas’ involvement in most of the infiltrations is unclear. Hamas has denied any involvement and blamed “angry young men” – rogue elements of Hamas or members of other militant organizations. While some analysts have contended that there is little chance that Hamas was unaware of their actions, or may be turning a blind eye, others (including the IDF) reject these conclusions, asserting that Hamas chief Yahya Sinwar seeks to prevent any perception of a loss of control over Gaza by the group. Israel has publicly attributed much of the violence to Islamic Jihad.

Meanwhile, in the West Bank, a 19-year-old Israeli was stabbed to death on August 7 and a 17-year-old Israeli was killed in a bombing on August 23. The attacks followed the submission of a Palestinian intelligence report warning of an increase in violence. They came during a period that included a foiled Jerusalem bombing attack, the stabbing of an Israeli policeman (during which one of the two Palestinian assailants was shot and killed), and a car-ramming attack against two Israelis in which the driver was shot dead.

With the price of continued conflict increasing in the West Bank, the Palestinian Attacks (West Bank) parameter shifted upward from 5 to 6. With Israel and Hamas seemingly determined to maintain the ceasefire in Gaza, all Gaza-related parameters remained the same.

PA maintains agreements with Israel as economic situation improves; UNRWA Faces New Crisis and Uncertain Future

Following his declaration of an intention to end all agreements with Israel, Palestinian President Mahmoud Abbas convened the first meeting of a committee set up to implement this course of action. However, there was little if any agreement among committee members as to a way forward, with Abbas indicating a preference for a slow, cautious approach, and no reports of any change to security coordination between PA security forces and Israel.

On August 22, the PA announced that an agreement had been reached with Israel to receive $568 million in fuel taxes, providing it with a much-needed cash infusion. The deal also allows the Palestinians to collect taxes on imported fuel, removing the administrative fee that it paid to Israel for this service. Ultimately, the deal will give the PA an additional $57-70 million each month. The PA subsequently announced that employees would receive 110% of their August salaries.

Earlier in August, the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) was beset by a new crisis after a leaked ethics report found evidence of abuse and misconduct. It prompted the appointment of a new deputy chief of the agency, and funding by multiple donor countries has been suspended while an internal investigation continues. With the agency already facing a funding crisis, Palestinian concerns over the UNRWA’s future are now heightened ahead of a UN debate in December over whether to extend the agency’s mandate for another three years.

Despite these developments, no change has been made to UNRWA’s status, and all refugee-related parameters remained the same. The moderate improvement in the economic situation for the Palestinian Authority moved the parameter related to the Palestinian economy in the West Bank from 2 to 3.

Israeli Government advances thousands of new settlement units and legalizes outposts

On August 6, the Israeli government advanced plans for 2,304 settlement housing units in the West Bank, which included retroactive legalization of illegally-built housing inside recognized settlements, and approved plans for the legalization of three illegal outposts. This marks the first time that the government has legalized outposts since 2012 (and the highest amount legalized since 1999) and increases the number of retroactively legalized outposts to 18 in total. According to Brian Reeves of Peace Now, such legalization “is a major component of the settlers’ annexation agenda, part and parcel of the push to extend Israeli sovereignty over the settlements.” On August 26, Netanyahu announced his intention to build a new, 300-home neighborhood in the settlement of Dolev.

The use of Israeli law to legalize outposts and move towards annexation shifted the relevant parameter from 5 to 4.

Tensions boil over on the Temple Mount/Haram al-Sharif

On August 11, the volatility of the Temple Mount/Haram al-Sharif in Jerusalem was on full display with the unusual occurrence of the Muslim holy day Eid al-Adha on the same day as the Jewish holiday of Tisha B’Av. Having initially decided to close the area off to Jews, Netanyahu reversed course after strong pressure from right-wing Israeli politicians. This followed an outbreak of clashes at the Temple Mount/Haram al-Sharif, in which stun grenades were used and dozens of worshippers injured, along with four policemen.

In the wake of these events, the governments of Jordan, Saudi Arabia, and Qatar condemned the actions of the Israeli government. Tensions were then further exacerbated when Israeli Public Security Minister Gilad Erdan publicly expressed his support for changing the status quo on the site to allow for Jewish prayer. His comments prompted a firm denunciation from the Jordanian government, which warned of “dangerous repercussions” and subsequently summoned the Israeli ambassador to Jordan for a reprimand.

Despite the violence and tensions at the Temple Mount/Haram al-Sharif, there was no fundamental change to the status quo arrangement at the site, and all relevant parameters remained the same.

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