Palestinian Statehood and the Search for Lasting Regional Stability

Recalibrating the relationship between the United States and Israel is no longer enough. Washington must place Palestinian statehood at the centre of its Middle East policy. Building a Palestinian State Is the Only Path to Lasting Regional Stabilityاضافة اعلان

In recent months, the relationship between the United States and Israel has faced an extraordinary degree of scrutiny.

In April, 40 Democratic senators voted against an arms sale to Israel in response to the Israeli government’s conduct in Gaza, Iran and Lebanon. Such a vote would have been almost unimaginable a year earlier.

Writing in Foreign Affairs, Andrew Miller argued that Washington should pursue a more “normal” relationship with Israel, ending the unconditional support that has characterised American policy for decades.

Following the war with Iran, criticism also began to emerge from within President Donald Trump’s political coalition, where some figures accused Israel of drawing the United States into an unnecessary and costly confrontation.

Reassessing the US-Israel relationship is necessary, particularly as Washington attempts to redirect its attention and resources towards priorities beyond the Middle East. Yet recalibration alone will not be enough.

To avoid repeatedly being pulled back into the region’s conflicts, the United States must help establish a more stable political order. That cannot happen while the Palestinian question remains unresolved.

The Hamas-led attack on Israel on October 7, 2023, and the devastating wars that followed demonstrated the failure of any regional strategy built on ignoring Palestinian political rights. Not every crisis in the Middle East originates in the Israeli-Palestinian conflict.

Nevertheless, genuine regional stability will remain impossible while millions of Palestinians are denied sovereignty, political representation and control over their own future.

For more than 15 years, Washington has treated the Palestinian issue as secondary to its relationship with Israel. It has returned to the subject only during intermittent peace initiatives, most of which have been shaped around Israeli political interests and preferences.

That approach must change.

The Trump administration may appear unlikely to lead such a transformation. However, Trump’s foreign policy has often been defined by unpredictability, personal calculation and sudden shifts in established positions. His fluctuating relationship with the Israeli government may leave some room for political manoeuvre.

Even if no meaningful change occurs during his presidency, his successors will still require a strategy that treats ending the conflict as a geopolitical necessity rather than an optional diplomatic project.

A stable Middle East requires a serious American relationship with the Palestinian people and their political institutions. It also requires Washington to support the construction of an independent and viable Palestinian state.

When Palestinian Statehood Appeared Possible The United States has pursued Palestinian institution-building before.

The Palestinian Authority was established during the 1990s as part of the Oslo Accords. Between 2007 and 2011, under Prime Minister Salam Fayyad, it made considerable progress towards developing institutions capable of forming the foundation of a future Palestinian state.

Fayyad improved financial management, increased government transparency and strengthened the professional capacity of the Palestinian security forces through a US-led training programme.

Supported by billions of dollars from the United States and other international donors, these reforms contributed to rapid economic growth. During the first four years of Fayyad’s term, the West Bank’s gross domestic product grew by approximately 10 per cent annually.

By 2011, the World Bank concluded that Palestinian institutions were sufficiently developed to establish and govern a state in the foreseeable future.
Institutional progress also strengthened public confidence.

At the time, Mahmoud Abbas retained significant popular support. A majority of Palestinians backed a two-state solution, while more than 60 per cent supported diplomacy and non-violent political engagement.

Fayyad’s achievements are frequently attributed to his technocratic leadership. Yet his programme would not have succeeded without the political conditions that made reform possible.

Two years before Fayyad became prime minister, Abbas had received a substantial electoral mandate, winning 62 per cent of the vote in the Palestinian presidential election. His legitimacy, together with the relative popularity of Fatah, gave Fayyad the political protection required to introduce ambitious financial and security reforms.

Those reforms gave Palestinians reason to believe that effective institutions, diplomacy and international engagement could bring them closer to independence.

The Palestinian Authority also benefited from operating alongside an Israeli government that regarded the strengthening of moderate Palestinian leadership as a strategic interest.

Former Israeli prime minister Ehud Olmert maintained regular contact with Abbas, facilitated the transfer of Palestinian tax revenues collected by Israel and eased certain restrictions on Palestinian movement in the West Bank.

This cooperation did not resolve the conflict. Olmert and Abbas ultimately failed to reach an agreement on borders, Jerusalem, refugees and other final-status issues. Nevertheless, the political environment allowed Palestinian institutions to function, deliver services and establish a degree of public credibility.

International investment followed. Alongside the United States, the European Union and other donors committed billions of dollars to governance, infrastructure and economic development.

Improved security and greater private-sector confidence encouraged further growth. By 2010, the West Bank’s economy had expanded considerably compared with the beginning of the decade.

For a brief period, a productive cycle appeared to be taking shape. Better governance increased public confidence. Greater stability attracted international assistance. That assistance, in turn, strengthened the Palestinian Authority’s ability to govern.

Palestinian statehood no longer appeared entirely theoretical.

The Deliberate Weakening of the Palestinian Authority, this progress began to unravel following Benjamin Netanyahu’s return to power in 2009.

Netanyahu moved away from Olmert’s policy of supporting the Palestinian Authority and increasingly treated its weakness as politically useful. His governments expanded Israeli settlements in the West Bank, increased military incursions into areas nominally controlled by the Palestinian Authority and repeatedly withheld Palestinian tax revenues.

At the same time, Netanyahu pursued a strategy that deepened divisions within Palestinian politics. Moderate Palestinian leaders were marginalized, while Hamas was allowed to consolidate its control over Gaza.

As settlement expansion damaged the Palestinian Authority’s credibility, Israel permitted large cash transfers from Qatar to reach Hamas in the Gaza Strip. The policy helped sustain Hamas while weakening the Palestinian institution created through the Oslo process.

The consequences were predictable.

The Palestinian Authority entered a deep financial crisis. Its ability to govern deteriorated, while Abbas’s leadership increasingly came to be viewed as weak, corrupt and authoritarian.

More importantly, the political principle upon which the Palestinian Authority had been established began to lose credibility. Cooperation with Israel and commitment to non-violence had failed to deliver independence, prevent settlement expansion or meaningfully improve Palestinian sovereignty.
As faith in diplomacy declined, support for armed resistance increased.

Fayyad resigned in 2013 after Abbas obstructed parts of his reform agenda. International donors, frustrated by the Palestinian Authority’s decline and the collapse of the peace process, gradually reduced their political and financial investment.

Trump’s first election in 2016 accelerated this marginalization.
His administration suspended most American assistance to the Palestinian Authority, moved the US Embassy to Jerusalem, closed the American consulate that had served as Washington’s principal diplomatic channel to the Palestinians and shut the Palestinian diplomatic mission in Washington.

Meanwhile, successive Netanyahu governments continued expanding settlements and abandoning meaningful negotiations in favour of policies that brought the West Bank closer to formal or informal annexation.

With no political renewal, no national elections and no credible diplomatic horizon, public support for the Palestinian Authority collapsed.

Shortly before October 7, 2023, polling in the West Bank and Gaza indicated that 78 per cent of Palestinians wanted Abbas to resign. Support for armed resistance had surpassed support for negotiations.

The decision by Washington and Israel to ignore the Palestinian issue and weaken the Palestinian Authority did not produce stability. It produced the opposite.
Nearly two decades of Hamas rule in Gaza culminated in the October 7 attack and a catastrophic war.

The United States, despite attempting to reduce its involvement in the Middle East, found itself once again drawn into the region’s conflicts.

Israel became less secure and increasingly isolated internationally. European and Arab states also faced the political, social and economic consequences of continued war.

Marginalizing Palestinian politics did not make the conflict disappear. It removed the political alternatives that might have prevented it from becoming even more violent.

The Ballot Box, Not the Gun
Any serious American attempt to support Palestinian statehood must begin by recreating the conditions that once made institutional progress possible.
The first requirement is legitimate Palestinian leadership.

Washington should support a credible process for replacing the ageing and increasingly dysfunctional Palestinian political establishment. Abbas has announced plans for legislative elections in November 2026, followed by presidential elections in early 2027. These would be the first national Palestinian elections since 2006.

The United States should insist that this commitment is honoured. It should also pressure Israel to allow campaigning, voter registration and access to polling stations across the Palestinian territories, including East Jerusalem.
For years, American policymakers have worried that elections could empower Hamas, which won the last legislative vote in 2006 and continues to defend armed struggle.

These concerns cannot simply be dismissed. However, indefinitely postponing elections carries its own severe dangers. When Abbas last considered holding elections in 2021, the Biden administration responded cautiously. Washington’s lack of enthusiasm contributed to the decision to postpone the vote.
That hesitation was a mistake.

At a time of unprecedented Palestinian frustration, delaying political renewal only weakens the Palestinian Authority and reinforces Hamas’s claim that armed resistance represents the only authentic expression of Palestinian nationalism.

American policy should therefore focus on creating the conditions for a legitimate, accountable and effective Palestinian government.

Washington could encourage the introduction of electoral laws that allow political movements beyond Fatah and Hamas to compete seriously. Participation could also be tied to a commitment to political pluralism and non-violence, forcing Hamas either to revise its position or exclude itself from the process.

The United States should make clear that free elections and a peaceful transfer of power would lead to formal American recognition of a Palestinian state.

Recognition would not immediately end occupation or transform conditions on the ground. However, it would give a newly elected Palestinian government a powerful source of legitimacy and demonstrate that democratic participation can produce meaningful political results.

Symbolic support must also be accompanied by practical commitments.
Washington should reconsider the legal restrictions that have sharply limited its relationship with the Palestinians.

The Taylor Force Act, for example, prevents significant American support for the Palestinian Authority while it continues providing payments connected to Palestinian prisoners accused or convicted of violence against Israelis.

Although the Palestinian Authority has taken steps towards reforming this system, the restrictions remain. The United States should conduct an independent assessment of the reforms and, if compliance is confirmed, restore direct assistance.

Other legislation has restricted the Palestinian Authority and the Palestine Liberation Organization from maintaining diplomatic representation in the United States.

Following recognition, Palestine should be permitted to open an embassy, conduct normal diplomatic activity in Washington and develop a direct bilateral relationship with the United States.

A Palestinian government cannot be expected to behave like a responsible state while being denied the diplomatic tools and political recognition normally granted to one.

Israel Must Become a Partner in State-Building The United States would play a central role in any renewed Palestinian state-building effort. Yet Palestinian self-determination will remain impossible without a significant change in Israeli policy.
Netanyahu’s far-right government, which has included figures such as Bezalel Smotrich and Itamar Ben-Gvir, has severely damaged Palestinian society and undermined the Palestinian Authority’s ability to function.

The Israeli government has withheld tax revenues that it collects on behalf of the Palestinians. These funds make up a substantial proportion of the Palestinian Authority’s budget.

The resulting crisis has prevented the Authority from paying full salaries, forced it to borrow heavily and contributed to shortages of essential medicines and public services.

If Netanyahu and his allies remain in power, meaningful progress may prove impossible. However, future Israeli elections could create space for a different approach.

A government involving right-wing opposition figures would not necessarily support Palestinian statehood. Nevertheless, a broader coalition containing centrist or centre-left leaders may recognize that allowing the Palestinian Authority to collapse would endanger stability in the West Bank and strengthen more violent alternatives.

Such a government might be willing to take practical measures to prevent institutional collapse, even if it remained unwilling to endorse a final political settlement.

These measures would not, by themselves, create a Palestinian state. They could, however, restore the minimum conditions required for Palestinians, Americans and international partners to resume serious institution-building. Washington must also be prepared to use its influence more forcefully than it has in the past.

At a minimum, the United States should demand the regular transfer of Palestinian tax revenues. If Israel continues withholding money that legally belongs to the Palestinians, Washington should reconsider the preferential economic arrangements it provides to Israel, including aspects of the bilateral free-trade relationship.

A government that deliberately damages the Palestinian economy should not continue receiving unconditional economic privileges.

The 1994 Paris Protocol, which regulates economic relations between Israel and the Palestinian territories, should also be renegotiated or replaced. The agreement gives Israel extensive control over customs, trade and tax revenues.

No government can build a sovereign state when another state controls the most important mechanisms of its economy and can withhold its income for political purposes.

Israel also controls Palestinian movement.

Since October 7, restrictions across the West Bank have intensified. Checkpoints, road closures and military barriers have disrupted supply chains, separated workers from employment, restricted access to agricultural land and made travel between Palestinian towns increasingly difficult.

Freedom of movement is not merely an economic issue. It is a fundamental component of sovereignty.

Palestinians will continue to view their own government as powerless while their daily lives are regulated primarily by Israeli soldiers, permits and checkpoints.

The United States should therefore press Israel to remove unnecessary restrictions. Continued refusal should carry diplomatic and political consequences, including reconsideration of Israel’s participation in the US Visa Waiver Program.

Settlements and Settler Violence
Few issues have damaged the Palestinian Authority’s credibility as severely as its inability to prevent settlement expansion and settler violence.

Since 2023, the Israeli government has approved tens of thousands of settlement units in the occupied West Bank. During the same period, thousands of attacks by Israeli settlers have been recorded.

Palestinian communities have faced physical attacks, the destruction of property, the seizure of agricultural land and forced displacement. Israeli authorities have frequently failed to hold perpetrators accountable.

The Biden administration imposed sanctions on a number of violent settlers and organisations accused of supporting them. Trump removed those sanctions after returning to office.

The United States should re-establish clear boundaries. It should restore targeted sanctions against violent settlers and organisations involved in financing or enabling attacks.

It should also oppose settlement expansion not only through diplomatic statements, but through material consequences.

Continued settlement growth erodes the territorial basis of a future Palestinian state. It also communicates to Palestinians that negotiations are merely a mechanism through which Israel gains time while permanently transforming the land.

No state-building project can succeed while the territory intended for that state is steadily fragmented.

From a Gaza Ceasefire to Palestinian Statehood.
The war in Gaza, alongside conflicts involving Iran and Lebanon, has shown European and Middle Eastern governments that the Israeli-Palestinian conflict cannot be contained indefinitely.

Ignoring it allows the crisis to expand in ways that damage regional security, international trade and domestic political stability.These governments must therefore play a more active role in Palestinian institution-building.

The European Union, Saudi Arabia and other international partners have already invested in Palestinian governance, public services, transparency and financial reform. The United States should support these efforts through conditional financial assistance and technical expertise.

However, strengthening the Palestinian Authority in the West Bank alone will not produce a viable state. Any successful strategy must eventually reunify the West Bank and Gaza under a legitimate Palestinian government.

Plans for ending the war in Gaza have acknowledged that a reformed Palestinian Authority should ultimately assume responsibility for governing the territory.
Yet the political process has stalled over the sequencing of Hamas’s disarmament, Israeli withdrawal and the transfer of administrative authority.

Without progress, Gaza risks being divided indefinitely. Hamas could retain control over one part of the territory, while Israel maintains a permanent military presence over the rest.

The demand for Hamas to surrender all of its weapons before reconstruction or political transition begins is unlikely to succeed.

The disarmament of an entrenched armed organisation cannot realistically occur in a single moment. It would require a gradual process involving demobilisation, security guarantees and the reintegration of fighters into civilian life.
Such processes take years.

Insisting on immediate and total disarmament allows Hamas to remain in power while giving the Israeli government justification to prolong its military presence.
The United States should instead work with Egypt, Qatar and Turkey to secure a phased agreement. Hamas would begin a monitored process of disarmament and demobilisation, while Israel would withdraw in stages linked to clear security and political benchmarks.

For such an agreement to succeed, Israel must accept that the Palestinian Authority will have a meaningful role in Gaza’s future.

A sustainable post-war system requires a credible Palestinian alternative to Hamas. Despite its many failures, the Palestinian Authority remains the only existing Palestinian institution capable of developing into that alternative.
Excluding it from Gaza until Hamas has fully disarmed is self-defeating. The Authority cannot establish legitimacy or administrative control if it is prohibited from entering the territory it is eventually expected to govern.

Washington should make clear that preventing the Palestinian Authority from participating in Gaza’s transition undermines both reconstruction and regional security.

If Israel continues to obstruct the transfer of authority, the United States should impose restrictions on the use of American weapons in Gaza and the West Bank.
Empowering a reformed Palestinian government, while gradually demobilising and reintegrating Hamas fighters, would create the institutional foundation required for Gaza’s reconstruction.

It could also unlock large-scale international investment, allow the deployment of an international stabilisation force and eventually establish a unified Palestinian political entity across Gaza and the West Bank.
The United States and its partners should not allow the Israeli government to prevent that outcome.

A Narrow but Necessary Opportunity
Taken together, these measures could form the basis of a wider regional peace process. The ultimate objective would be an independent Palestinian state, long-term Israeli security and Israel’s full political and economic integration into the Middle East. At present, this outcome appears distant.

Israel remains governed by a far-right coalition. Palestinians in Gaza continue to endure catastrophic conditions, while communities in the West Bank face settlement expansion, military raids, displacement and escalating settler violence.
Trump has shown little consistent interest in Palestinian statehood during either of his presidential terms.Yet political circumstances can change quickly.

Netanyahu may struggle to form another governing coalition. Abbas has at least raised the possibility of Palestinian elections. Palestinian Prime Minister Mohammad Mustafa is a capable technocrat who could potentially play a role similar to Fayyad’s if the political environment allowed it.

The conflict has also become increasingly significant within European and American domestic politics. Growing divisions over Israel within both major US political parties may create new pressure for a change in policy.

Like many presidents before him, Trump may eventually search for a major foreign-policy achievement capable of shaping his legacy. Supporting the first meaningful steps towards regional peace and Palestinian statehood could provide such an opportunity.

Even if he chooses not to pursue it, the project will remain relevant to the next American administration, regardless of political party.

Nation-building has become an unpopular concept in Washington because of the United States’ failures in Iraq and Afghanistan. Yet the Palestinian case is fundamentally different.

It does not require imposing an entirely new political system on a distant society. Palestinian institutions already exist. Palestinian technocrats, civil servants and political movements already possess experience in governance. What they lack is legitimacy, sovereignty, resources and the freedom to operate.

In the absence of a serious state-building process, Israeli governments have continued closing the territorial and political space required for Palestinian independence. At the same time, growing numbers of Palestinians have concluded that armed resistance is the only remaining means of defending their right to self-determination.

These two forces reinforce one another.

Settlement expansion strengthens militancy, while militancy is used to justify deeper occupation, collective punishment and further settlement expansion.

The result is a cycle of violence that repeatedly draws in the wider region.
Breaking that cycle will require more than ceasefires, temporary reconstruction plans or another attempt to manage the conflict. It will require a political destination.

If the United States genuinely wants lasting peace and a more stable Middle East, it must treat the creation of a viable, legitimate and independent Palestinian state as an urgent strategic priority.There is no credible alternative.

Based on the arguments of Ilan Goldenberg, senior vice-president and chief policy officer at J Street, and Liam Hamama, policy analyst at J Street.