Israel and the Occupied Territories are much changed - yet peace seems more distant than ever

The earliest memories can be the last to fade: a severed limb still clinging to the roof of what had been a crowded bus shelter blasted by a suicide bombing near Tel Aviv, the first of two which killed 16 Israelis in a single day; the body of a 14-year-old Palestinian boy shot dead with his sister as they collected washing from the roof of their house, laid out in a refrigerated carnation warehouse because there was no room in a morgue crowded with other casualties from an Israeli incursion into Rafah.

But recollections from the outset of my just-completed eight years’ reporting from Israel and the Occupied Territories are a reminder of what has changed as well as what hasn’t. The second intifada has long since ended, along with suicide bombings and large-scale armoured incursions (if not the smaller ones) into West Bank cities. Even in Gaza, where there are still targeted killings of militants, there is – for now – less civilian “collateral damage”; and while there are periodic rocket attacks on nearby Israeli communities, Hamas has been trying to preserve an undeclared ceasefire with Israel.

Paradoxically, a negotiated peace is also a much more distant prospect. A Palestinian President, who has consistently opposed violence, is denounced for refusing to negotiate without a sign of good faith from Israel. Yet there is scarcely a foreign diplomat in Jerusalem or Tel Aviv who now believes that Benjamin Netanyahu would agree to anything approaching the minimum the Palestinians need in negotiations: a sovereign state on the West Bank, Gaza and East Jerusalem.

As the world concentrates on the Israeli Prime Minister’s new “red line” for an Iran strike, Jewish settlement in the West Bank accelerates apace. Settler leader Dani Dayan offered, in a recent New York Times article, a panglossian picture of the West Bank in which “security – the ultimate precondition for everything – prevails”. Reading this, I remembered meeting, in 2009, Khalil Nawaja, a 61-year-old shepherd in the south Hebron hills, just after the police had closed the file – without charges – on the attack by four masked club-swinging young settlers that had severely injured him and his wife (and which had been caught on video). Speaking of life in Israeli-controlled Area C, the 60 per cent of West Bank territory where the military’s task is to protect the settlers and the Palestinian Authority’s writ does not run, he said, accurately: “I am in the front line. If I leave tomorrow, I will lose the land.” This was one – routine – settler attack of the sort EU diplomats warned earlier this year were now increasing at a frightening pace. It depends what you mean by “security”.

When Mitt Romney says he sees no hope for an Israeli-Palestinian resolution, he is really endorsing the Dayan view. And the right’s triumphalism is matched by the left’s defeatism.

Embedded in the Israeli DNA is a perception that Ariel Sharon’s 2005 withdrawal from Gaza led only to Hamas rocket fire into Israel, thus underlining the dangers of withdrawals elsewhere. But not only did Israel maintain tight control of Gaza’s borders, air space and territorial waters; the withdrawal could hardly have been executed to less reconciliatory effect. Israel’s refusal to co-ordinate it with the newly elected moderate President Mahmoud Abbas was what helped Hamas to claim, in its victorious 2006 election campaign, that it had driven Israel from Gaza by force. And yet the Gaza withdrawal is a powerful precedent. The growing view is that settlement – wholly illegal under international law as it is – is too entrenched to be reversible without an Israeli civil war.

Is it? The one point of light in a bleak political scene are the young, but struggle-hardened, Israeli activists in an important new think-tank, Molad, trying to revive the moribund Israeli left, challenging the assumption that a two-state solution is unachievable. They argue that if Israel were to compensate settlers for transferring to Israel proper, while cutting off the utilities to the settlements by a certain date, it’s likely that a large majority would go without grace or resistance, leaving a hard core to be moved by force, as a minority were from Gaza.

The more persuasive counter-argument is that even if that was physically possible, there is no political will to do it. And it can certainly be hard to escape the Catch-22 conclusion that at times of armed conflict, Israel will not make peace because it would be a surrender to “terror” and that when there is calm there is no need to do so. Yet only six years ago, a majority of Israelis voted for parties advocating some form of withdrawal from the West Bank. In a Molad poll, roughly half of Israelis would back a deal with the Palestinians. But for that to be a source of any hope, an Israeli politician would need to emerge who has the will to negotiate a deal with the Palestinians and the electoral clout to deliver it. And the West would finally need to understand, and start reversing, its own massive contribution to the tragedy unfolding in Israel-Palestine.

It’s far from clear whether even a second-term Obama presidency can overcome the unique influence exercised on US domestic politics by AIPAC, a body vastly more representative of Netanyahu’s Likud than of American Jewry.

But the EU has a locus, too. And it has mostly opted for the worst course, irritating Israel’s political establishment with ritual complaints about its serial violations of international law while refraining from any measures to stop them. It has never extracted concessions in return for its multibillion-dollar bankrolling of the remaining legacy of Oslo, nearly 20 years after the accords generated the last real – but vain – hope for peace. With few exceptions, Europe has decoupled its ever-strengthening trade relations with Israel from any effort to secure a solution. And it is not to overlook Palestinian division and corruption to lament the West’s apathy in the face of Salam Fayyad’s major success in meeting its demands for a PA fit for statehood, only to see the Authority’s strength haemorrhaging by the day because of the dismal lack of progress towards a state.

Europe is inhibited by its historic guilt over the Holocaust. But this is fatally to misunderstand the proposition it should be making. Which is that Israel’s long-term security and permanent legitimacy is ultimately guaranteed not by tanks and F16s but by internationally recognised borders, an agreement with the Palestinians and the accommodation with its neighbours offered by the Saudi-led Arab peace initiative. As Ehud Olmert, a defector from the right, recognised five years ago, the alternative is an apartheid state in which a “South African-style struggle for equal voting rights” by the Palestinians would eventually prevail with the result that the Jewish state would be “finished”. Or put another way, the greatest existential threat to Israel, Iran notwithstanding, may yet prove to be Israel itself.