Resettlement of the Gaza as a realistic pathway to the two-state solution

I propose the resettlement the people of Gaza in the West Bank in exchange for the permanent withdrawal of Israeli settlements and the establishment of a sovereign Palestinian state.

I propose the resettlement the people of Gaza in the West Bank in exchange for the permanent withdrawal of Israeli settlements and the establishment of a sovereign Palestinian state. The new Palestine ought to be enfolded within a security arrangement overseen by Jordan, Israel, the US and other multi-lateral partners (e.g. UN, Arab League). A material aid package from the US or international working group will establish the foundations of a modern economy.

A 75-year old story took on new life last month when Hamas, a militant Islamist faction of Palestinian politics governing the Gaza strip, cut a broad swathe of terror into Israeli territory, killing 1,200 and taking more than 240 hostages. In the aftermath, Israeli Defense Forces heavily bombarded Gaza, an impoverished strip of 2.2 million people, and undertook a ground incursion into the territory, at the cost of many resident civilian lives.

Both events are part of an evolving saga of conflict stretching back to the establishment of Israel post-World War II. Recent events has evoked strong reactions across the world, rallying support for both sides. Emotions aside, the world must now look to the future – on how to establish a just and lasting peace in the Middle East.

The paragraphs below will outline a brief overview of the writer’s understanding of the key interests of each party in the conflict and proposes an unconventional pathway to the two-state solution.

First, Israel is the most developed economy and military in the region and enjoys the backing of the premier global power. From its establishment in 1948, Israel has transformed from a regional pariah to an established and legitimate (though unpopular) regional power. In the face of the viciousness of the attacks, overwhelming public outcry, and potent historical memories, the Israeli government has decided that its response must be one of overwhelming force and deterrence. This strategy has been carried out with the backing and protection of the United States. The tactical objective is destruction of Hamas. The primary goal is first, absolute security for its citizens, and second, some psychological absolution for and credibility recovery from October 7.

Hamas is technically dedicated to the restoration of Palestine pre-Israel but is practically willing to accept a Palestinian state with 1967 borders (West Bank, Gaza, Jerusalem). It is ideologically and practically linked with the Muslim Brotherhood and Hezbollah. Reasons for October 7 include fear of the looming normalization of Israeli-Saudi ties (and the cascading effect on Israeli legitimacy in the Arab World) and desire for greater influence, emboldened by a recent warming in relations with Iran.  Their actions reflect a desperation at their cause being diminished and abandoned by erstwhile allies.

Hamas’ actions of October 7 have proved to be a miscalculation with grave consequences. The brutality and bestiality of their attacks served to de-legitimize, not legitimize, their organization. The US is firmly behind a determined, well-funded, and united Israel while Iran has stayed out. Hamas itself is being dealt an existential blow.

Tragically, the Palestinian people may be called the proverbial sheep without a shepherd in this play. They have borne the brunt of internal struggles and external repression by Israel. The Palestinian Authority is infamously corrupt and has little legitimacy. Ultimately, desire for sovereignty means that the responsibility of establishing a responsible, modern, and legitimate leadership rests on the shoulders of Palestinian people. Whatever the international community chooses to do, its solutions are crippled by the lack of legitimate and credible governance within the Palestinian community.

Long-standing US foreign policy objectives in the region include containing Iranian influence, countering terrorism, and promoting Israeli-Arab peace. The United States under the Biden Administration has pursued a traditional US foreign policy stance with strong echoes of the World War II era. In my view, President Biden has reapplied Franklin D. Roosevelt’s policies both domestically and abroad, with infrastructure and industrial support as his signature policies domestically and abroad, the display of overwhelming strength within traditional alliance structures. The US’s support will allow Israel to attain its immediate goals in the short term but will fuel increased dissatisfaction with the US in the region. Arab allies, in particular, may interpret the actions of today as further evidence that their interests – and perhaps even lives – will never be regarded seriously by Americans. This may have far-reaching effects as regional patterns invariably shifts with time – i.e. shifting power balance between Sunni and Shiite worlds, the changing politics of oil, and the economic transformation of the Gulf.

A proposal for an unconventional but realistic pathway to the two-state solution

The beginning of this proposal is a recognition that the current set-up of Gaza and the West Bank is not viable as part of the two-state solution. Gaza is essentially destroyed. It has no natural resources, is geographically tiny and isolated. Furthermore, its location means that it will always be the subject of intense security scrutiny by Israel. In its current form, whatever shape the post-conflict governance may take, it offers its people nothing but mere existence to ruminate on the grievances of the past.

The second recognition, which is shared by most of the world, is that there can be no just and lasting peace in the region without a two-state solution – that is, self-government and autonomy for Palestinians. The population of Jews and Arabs are roughly 50/50 in Israel and Palestinian Territories – roughly 7 million Jews and 2 million Arabs in Israel and 5 million Arabs in the Palestinian Territories.  At these numbers, it would be cataclysmic for one side to fully squeeze the other out.

The third recognition, which may be politically controversial, is that based on the current balance of power, a Palestine with 1967 borders will not be feasible. The balance of power is skewed towards the Israeli side – whose far-right government would much prefer full annexation. Even if Israel can be prevailed upon to accept two-state solution, the new Palestine will be crippled and weak. The better alternative for Palestine would be to accept a lesser piece of territory for true internal sovereignty and secure borders.

I propose the resettlement the people of Gaza in the West Bank in exchange for the permanent withdrawal of Israeli settlements and the establishment of a sovereign Palestinian state. The new Palestine ought to be enfolded within a security arrangement overseen by Jordan, Israel, the US and other multi-lateral partners (e.g. UN, Arab League). A material aid package from the US or international working group will establish the foundations of a modern economy.

The first requirement for state formation is acknowledged borders and clearance of Israeli settlements. One single unified territory is more sensible than weakened Palestinian presence in two noncontiguous landmasses. The current form is not only logistically difficult to manage but also results in the two societies, which are already evolving in different directions.

Israel will not easily accept the defeat of its ambitions for the West Bank nor its current security dominance of the territories. But, the prospect of absorbing the Gaza territory may be significantly enticing. Not only does Israel gain a strategic piece of real estate, it can put at rest once and for all the ever-brewing security threat on its Southern tail.

The solution will be very difficult to accept for the Palestinians, given the preeminence of the Nabka in their national consciousness. Ultimately, it is a recognition and acceptance of the last 75 years of history, their overwhelming military defeat, and a decision to make the best of the advantages they still hold. It is a decision that can only be executed by a legitimate internal leadership. Pragmatism will recommend the prospect of freer and brighter possibilities in a geographically contiguous, truly Palestinian West Bank if and only if there is decisive international determination for its establishment and success.

The transitional security arrangement for the new Palestinian state ought to be managed by a combination of Jordan, domestic representation, and Israel, all overseen by the US and other multi-lateral institutions. Jordan is the natural candidate to play a leading role in security oversight of the new Palestinian state as it shares a direct border with the West Bank and has deep kinship and cultural links with the region. The country is relatively progressive and secular with decent military presence. Furthermore, Jordan is a key US ally in the region and recipient of US bilateral aid. Meanwhile, Israel cannot be completely excluded from its security oversight as it cannot accept the potential for any hostile presence in a landmass with 440 miles of direct land border with itself. They will undoubtedly find ways to involve themselves if legitimate participation is withheld.

For the US, such an arrangement would, not only solve an intractable fissure in the region, but also contain the influence of Iran. Iran has portrayed itself to be the champion of the Palestinian cause. An independent Palestine, backed by regional US allies, with some hope for future prosperity and regional integration, will do much to dispel that narrative. A truly independent Palestine will also offer both the US and Arab world a new opportunity for influence and engagement, with much better dividends if the state succeeds.

Israel, while traumatized and embarrassed, is riding on the back of an overwhelming military success. They are well on their way to achieving their objectives. Its neighbors cannot miss the message that for every Israeli life taken, at least 10 Palestinian ones have been extracted. On the other hand, while the Palestinian cause elicits widespread sympathy from the Arab world and the Global South, the support has not translated into concrete economic, political, or military packages.

The key risk for Israel – and implicitly the US – is overreach. There is a fine line between display of strength and overreach. It is the task of all legitimate and influential powers to discern and walk that line. Under-projection of strength risks destabilizing allies and regional balances of power while emboldening malicious actors. Over-projection risks the alienation of allies and potential partners in the long run. It is clear to the author that giving free rein to Israeli suppression of Hamas at the cost of Palestinian civilians and the lack of real concern shown for the Palestinian issue will fuel growing dissatisfaction in the Arab world. To establish the foundation for mutually satisfying future cooperation and the long-term stability of the region, the US must take decisive action to restore the delicate balance of interests that make up the complex, heterogeneous, and dynamic Middle East.

*The article does not reflect the views or opinions of any organizations affiliated with the author nor does it reflect any political affiliation or contribution by the author or any of her affiliated organizations. The article should not be construed as investment advice offered by the author or any of her affiliated organizations and is meant to be enjoyed as an academic analysis contributing to the free exchange of ideas in international relations.

Angela Xu
Angela Xu
Angela Xu is an analyst at an investment consultant and fiduciary manager to pensions, endowments, and asset owners. She focuses on hedge fund investments. Her main interests are the interplay of international relations, global markets and macroeconomics. She received a BSFS in International Politics from Georgetown University.