Israeli Prime Minister Binyamin Netanyahu threw a rhetorical bone to President Obama in his much anticipated speech on June 14, when he used the term "Palestinian state." But he conceded nothing of substance, reiterating Israel's continuing rejection of real Palestinian statehood, independence, sovereignty, and self-determination. He demanded that the Palestinians recognize and accept Israel as the "national homeland of the Jewish People," not a state of all its citizens, thus requiring Palestinians to accept the legitimacy of Israel's discriminatory practices. And his speech continued Israel's escalation of threats against Iran.  
 
Now the Israeli-Palestinian ball remains squarely in President Obama's court — and the results will be determined largely by his administration's decision on whether or not to use real (i.e., financial or diplomatic) pressure, rather than relying solely on public or private urging, for Israel to comply with U.S. wishes. Without concrete consequences for Tel Aviv's noncompliance —such as withholding all or part of the $3 billion annual U.S. military aid to Israel, or withdrawing the U.S. diplomatic protection that keeps Israel from being held accountable in the UN Security Council — Obama's demands for a settlement freeze or anything else will have little impact.  
 
"Palestinian State" 
 
It was no surprise that Netanyahu acceded to Obama's demand that he utter the words "Palestinian state." Despite outrage among his far-right backers, words are relatively cheap: he never even said the word "Palestine," nor did he refer to a "two-state solution" or two states in any form. Instead, Netanyahu described "two free peoples," each with a flag and an anthem. What's missing is anything remotely resembling equality or justice.  
 
Netanyahu described "a demilitarized Palestinian state side-by-side with the Jewish state." He described a non-sovereign, non-independent, non-contiguous "Palestinian state" that would be forcibly demilitarized by international guarantee rather than any internal choice; a "Palestinian state" with no control of its own airspace; a "Palestinian state" with no control of its own borders; a "Palestinian state" with no right to sign treaties; and a "Palestinian state" without Jerusalem. His putative "Palestinian state" has no known borders, since territory would be determined only in later negotiations. Israeli settlements, as well as the Apartheid Wall, the closed military zones, the checkpoints, the settlers-only roads, bridges, tunnels built on stolen Palestinian land, and continue to divide the West Bank into tiny non-contiguous cantons or Bantustans, all remain in place.  
 
Settlements 
 
Netanyahu completely rejected Obama's call for a settlement freeze. "We have no intention to build new settlements or set aside land for new settlements," Netanyahu said. So all expansion of existing settlements — not only for the so-called "natural growth" which Netanyahu and President Obama openly tussled over — will continue. Palestinian land, therefore, will continue to be "set aside" — a polite euphemism for "stolen" — to expand any or all of the existing Jewish settlements as far as any nationalist or religious extremists (or, for that matter, any of the yuppie settlers who make up the majority of the settler population) may wish to build them.  
 
The fundamental problem of the settlements, of course, is not just the creeping expansion — it's their very existence. All Israeli settlements in the West Bank or Arab East Jerusalem — not only the tiny propaganda-driven "outposts" but the huge city settlements like Ariel or Ma'ale Adumim or the oldest settlements long described as "neighborhoods" of Jerusalem — are illegal. The 4th Geneva Convention Article 49(6) prohibits the occupying power from transferring any of its own population into the occupied territory — settlers don't become legal just because they live in giant cities of 35,000 or 40,000 people or because they stay for more than 40 years. The existence of the settlements represents a continuing violation — and even if Obama managed to impose a full freeze on all settlement activity, there is no indication yet of what (if anything) he intends to do about the 480,000 illegal Israeli settlers continuing to occupy those (however frozen) Jews-only settlements across the West Bank and East Jerusalem.  
 
Israel as the "State of the Jewish people" 
 
This formulation, a version of which Obama used in his Cairo speech, is very dangerous. Netanyahu demanded that the Palestinians not only recognize Israel (a diplomatic action Palestinians have long expressed willingness to do in return for Israeli recognition of an independent sovereign Palestinian state), but that they recognize Israel as a Jewish state. That means recognizing as legitimate Israel's official discrimination against its non-Jewish citizens. Such recognition would also accept Israel's violation of the international laws guaranteeing Palestinian refugees the right to return to their homes on the grounds that a large number of returning refugees would change the demographic balance. It might indeed end Israel's permanent Jewish majority, but no government has a "right" to ensure a preferred racial or religious or ethnic majority by expelling, transferring, denying rights, or discriminating against those outside the chosen parameters. 
 
Netanyahu actually admitted he does not believe Israel is bound by international law or treaties. Israel, he said, needs only to "take into account" international considerations. "We have to recognize international agreements," he said, but pay equal attention to "principles important to the State of Israel." Under that theory, agreements Israel had already accepted, such as the 2003 "road map" which required Israel to freeze all settlements including "natural growth," or UN Resolution 273 of 1949 which welcomed Israel into the United Nations on condition that it accept the Palestinians' right of return, are irrelevant and can be violated with impunity if they don't match "principles important to the State of Israel."  
 
Israel, the Arab world and Iran 
 
Netanyahu echoed Obama's call for normalization of relations between Israel and the Arab states. Netanyahu's vision of that "reconciliation" is clearly tied to his effort to establish, with U.S. backing, an Israeli-Arab alliance against Iran, describing his effort "to forge an international alliance to prevent Iran from acquiring nuclear weapons." The recent Iranian elections certainly helped Netanyahu. He will use a confirmed victory for President Mahmoud Ahmadinejad in the disputed elections, or even continued uncertainty, protests, and instability in Iran, as evidence for his claim that Iran remains a direct and immediate threat to Israel. Netanyahu described the Iranian election itself as demonstrating that threat and said the "greatest danger confronting Israel, the Middle East, the entire world, and human race, is the nexus between radical Islam and nuclear weapons." His audience at that moment was not only hard-line voters at home, but Israel's supporters in Congress and elsewhere in the United States, using the "Iranian threat" to counter any U.S. unease regarding his rejection of Palestinian self-determination.  
 
It remains uncertain how far Obama is prepared to go in building such a regional anti-Iran alliance. In his speech in Cairo two weeks ago, Obama urged Arab governments to implement only those parts of the 2002 Arab peace initiative calling for normalization with Israel, while ignoring the critical Israeli actions the plan recognizes are needed before such normalization could take place. The Arab plan, endorsed by the 22 nations of the Arab League, did offer normalization with Israel, but only in exchange for complete Israeli withdrawal to the 1967 borders, sharing of Jerusalem, a just solution to the Palestinian refugee crisis based on international law, and more. Netanyahu followed Obama's lead in ignoring the Israeli obligations, and in demanding that Arab governments immediately establish peace treaties, full diplomatic relations, trade, tourism — in essence, full normal relations — with Israel, getting nothing in return. 
 
The danger is that such state-to-state normalization between Israel and any or all Arab governments, if carried out with Israel's occupation and apartheid policies intact, undermines Palestinian claims, weakens the Palestinian position in the region and internationally, and legitimizes Israeli violations of international law. The call for such one-sided normalization may also be linked to an effort by the Obama administration to push Israel towards new negotiations with Syria — separating that process from the Palestinian track. Such negotiations could lead to some important movement towards ending the Israeli occupation of the Syrian Golan Heights. But such a move could simultaneously endanger the central component of Israel's occupation of Palestine. Israel would try to convince the Obama administration and the U.S. Congress that any withdrawal from the Golan would be so traumatic for Israel that the United States cannot press for any motion on ending occupation in the West Bank, Gaza, and East Jerusalem, let alone for ending Israel's lethal siege of Gaza. Just such an impact occurred after Israel withdrew from the Egyptian Sinai in the context of the 1979 Camp David Accord. Israel won support for its position that the return of the sparsely populated Sinai peninsula to Egypt was sufficient to fulfill any requirement in UN Resolution 242 (or anywhere else) that Israel withdraw from the territories it had occupied in the 1967 war.  
 
The outcome of the disputed Iranian elections remains uncertain. Civil engagement, protest, and mobilization is occurring at a level not seen at least since the student uprisings of 1999; some observers say not since the Islamic revolution of 1979. But the results remain unclear. It's important that Obama has remained careful and respectful in his response, raising concerns about government suppression and the street violence but making clear that "it is up to Iranians to make decisions about who Iran's leaders will be, that we respect Iranian sovereignty." Crucially, he said the United States "will continue to pursue a tough, direct dialogue between our two countries." Public pressure must be maintained to insure that Israeli threats of military force against Iran are not backed up by the United States.  
 
Now, in Obama's court... 
 
Questions remain. 

• Will Obama accept Netanyahu's rhetorical use of the words "Palestinian state" as a major concession, sufficient to demand new concessions from the Palestinians?
• If Netanyahu moves one step further and calls for some kind of settlement freeze (whether or not it is actually imposed on the ground), will that be greeted as an important new concession with no response to the continuing illegality of the existing settlements?
• Will the Obama administration's regional strategy focus on building an Israeli-Arab alliance against Iran despite Obama's stated commitment to new negotiations with Iran "without preconditions on the basis of mutual respect"?
• How will Obama respond if there are a few more rhetorical concessions from Netanyahu, even if there is no actual motion on the ground on Palestinian rights?

Or, looking forward… 

• Will Obama send his envoy, former Senator George Mitchell, to inform the Israeli government that Washington's next step will be the withholding of this year's $3 billion in U.S. military aid to Israel until there is evidence on the ground, not only in words, of a complete halt in building, selling, recruiting residents, or any other activity in any of the settlements?
• Will Obama announce that continuing to sponsor bilateral Palestinian-Israeli talks is futile when the disparity of power remains so profound, and that instead the new U.S. policy will be to support regional negotiations based solely on international law and all relevant UN resolutions as the basis for ending occupation and establishing a just and comprehensive peace in the region?

Okay. Maybe that last one is still a ways down the line. But stay tuned.

Phyllis Bennis is a fellow at the Institute for Policy Studies. Her books include Understanding the Palestinian-Israeli Conflict: A Primer, Understanding the U.S.-Iran Crisis: A Primer, Ending the Iraq War: A Primer, and most recently Ending the Us War in Afghanistan: A Primer. If you want to receive her talking points and articles on a regular basis, click here and choose "New Internationalism." You can find her on Facebook here: http://www.facebook.com/PhyllisBennis

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