ACTION MEMORANDUM

TO: The Next President of the United States

FROM: Chuck Freilich

DATE: September 1, 2008

SUBJECT: The Right Return

The Israeli-Palestinian “peace process” is in deep trouble, and unless we pursue bold new approaches, it may soon be dead. If that happens, the situation could deteriorate further into violence and terror, with severe consequences not just for the sides themselves, but for the entire region and U.S. interests.

One such bold approach would be to turn upside-down the assumption that the refugee issue can only be settled after a final status agreement is achieved. It may be possible not only to save but also to re-invigorate the peace process by Israel’s offering to begin the resettlement process beforehand. Such a proposal, if supported by the next U.S. administration and other relevant international actors, could break psychological barriers and help ease the politics of a final status accord.

Each side blames the other for the present impasse in the peace process, and to some extent both are right. On the Israeli side, 15 years of Palestinian terror and violence since the signing of the Oslo Accords have severely eroded public belief in the possibility of a real peace. By clear majorities, Israelis continue to support major territorial concessions in the West Bank as the price of peace, but they no longer believe that the Palestinians are capable or desirous of ending violence and reaching a viable peace.

Nevertheless, Israel does not wish to re-establish the status quo ante Oslo, or even the state of affairs that existed before its summer 2005 withdrawal from Gaza. It has instead made do with half measures that have, not surprisingly, produced partial results. Israel’s limited military operations in Gaza have failed to stanch the barrage of rockets fired into its towns, and the current “ceasefire” (in which some rocket fire continues) is likely to prove short-lived. It is therefore increasingly likely that Israel will conclude that it must re-conquer Gaza, at least temporarily. This, however, will produce only a temporary respite from the rocket fire and may have other negative consequences as well, which is why Israel has been loath to re-enter Gaza in force even despite the June 2007 Hamas takeover of that territory and ongoing rocket fire.

As difficult as Israel’s dilemma is, it could get worse. Only highly effective counterterror operations, and some good luck, have prevented thus far the firing of rockets from the West Bank into Tel Aviv and its suburbs. Political and technical trends are working against Israel, however, and when its luck runs out and rockets are fired into its heartland, the...