Helen Twist
Former Chatham House Expert
Claire Spencer
Senior Research Fellow, Middle East and North Africa Programme & Second Century Initiative

For the first time since the Oslo declaration, the Palestinians are leading the agenda with their bid for statehood at the UN, whilst Israel and the United States scramble to catch up. 

The quest for state recognition at the UN, and the foreseen reactions of Israel and the US, are peripheral to resolving the larger conflict, but the short-term result is likely to put the contradictions of the all-but-defunct peace process in sharp relief. 

Biggest Loser: The US 

Taking a position that is old-fashioned and resistant to the changing regional dynamics, the core argument underlying the US threat of a UN Security Council veto is that UN recognition of Palestine detracts from and is detrimental to negotiations. In reality, domestic constraints have led to President Obama failure to deliver on the promises of his 2009 Cairo speech. The US, conspicuous in its absence in the Arab world over the past months, risks placing itself against popular aspirations elsewhere in the region. Should the US veto the bid, it risks its reputation and influence in Palestinian-Israeli affairs and in the region. 

Furthermore, the threat to withdraw Congressional funding to the Palestinian Authority, should Palestine be recognized as a state, needs to be taken seriously. Not least since Congressional positions on the conflict have not historically taken the unforeseen and negative consequences of such actions for Israel into account.

Israeli Politics

Israel’s domestic position is also difficult. Internal tensions are increasingly apparent against a backdrop of a summer of protests over housing and the rising poverty gap, and a decidedly underwhelming response to the emerging democracies on its doorstep. Israel still needs to adjust to the changing regional realities – the loss of Hosni Mubarak in Egypt, intensified strains with Turkey, the potential outcome of reform (or lack of) in Jordan, and the divided reactions and growing impatience of the EU. Tzipi Livni, the Israeli opposition leader has been critical of the current government’s approach. She has encouraged Israeli Prime Minister Netanyahu to be courageous and engage with the country’s regional neighbours and its allies, principally the US, in order to renew the peace process. 

Europe’s Position

America and Israel’s entrenched positions offer no room for manoeuvre, but Europe could be in a position to broker the situation. So far, the EU has been divided on the issue of Palestinian statehood at the UN. But paradoxically, the lack of unity could put individual EU states, or smaller than 27-strong coalitions of European states, in a stronger position to broker compromises. This would be the case especially if linked to current EU-funding levels to the Palestinian Authority (PA). Europe is the largest aid donor to the PA, and maintaining this is unlikely to be universally popular at a time of increasing financial stress in the eurozone. If the PA loses significant funding from both the US and EU, the most immediate consequences outside the territories would be felt by Israel. 

Outside players, above all in the EU, have a chance to identify for themselves the core principles that matter most in moving towards a two-state solution, perhaps leading to acting as a more nuanced broker of the peace process. But this will require much more flexible forms of diplomacy. Furthermore, there needs to be a greater focus on the real costs to prevaricating for a further 20 years or more.