Adam Hanieh’s essay. From a free e-book published by Verso.
8 December 2023
Excerpt From Verso free e-book From the River to the Sea: Essays for a Free Palestine.
This year marks the twentieth anniversary of the signing of the Oslo Accords between the Palestine Liberation Organization (P LO) and the Israeli government. Officially known as the Declaration of Principles on Interim Self-Government Arrangements, the Oslo Accords were firmly ensconced in the framework of the two-state solution, heralding “an end to decades of confrontation and conflict,” the recognition of “mutual legitimate and political rights,” and the aim of achieving “peaceful coexistence and mutual dignity and security and ... a just, lasting and comprehensive peace settlement.”
Its supporters claimed that under Oslo, Israel would gradually relinquish control over territory in the West Bank and Gaza Strip, with the newly established Palestinian Authority (PA) eventually forming an independent state there. The negotiations process, and subsequent agreements between the PLO and Israel, instead paved the way for the current situation in the West Bank and Gaza. The Palestinian Authority, which now rules over an estimated 2.6 million Palestinians in the West Bank, has become the key architect of Palestinian political strategy. Its institutions draw international legitimacy from Oslo, and its avowed goal of “building an independent Palestinian state” remains grounded in the same framework. The incessant calls for a return to negotiations—made by US and European leaders on an almost daily basis—harken back to the principles laid down in September 1993.
Two decades on, it is now common to hear Oslo described as a “failure” due to the ongoing reality of Israeli occupation. The problem with this assessment is that it confuses the stated goals of Oslo with its real aims. From the perspective of the Israeli government, the aim of Oslo was not to end the occupation of the West Bank and Gaza Strip, or to address the substantive issues of Palestinian dispossession, but something much more functional. By creating the perception that negotiations would lead to some kind of “peace,” Israel was able to portray its intentions as those of a partner rather than an enemy of Palestinian sovereignty.
Based on this perception, the Israeli government used Oslo as a fig leaf to cover its consolidated and deepened control over Palestinian life, employing the same strategic mechanisms wielded since the onset of the occupation in 1967. Settlement construction, restrictions on Palestinian movement, the incarceration of thousands, and command over borders and economic life: all came together to form a complex system of control. A Palestinian face may preside over the day-to-day administration of Palestinian affairs, but ultimate power remains in the hands of Israel. This structure has reached its apex in the Gaza Strip—where over 2.3 million people are penned into a tiny enclave with entry and exit of goods and people largely determined by Israeli dictat.
Oslo also had a pernicious political effect. By reducing the Palestinian struggle to the process of bartering over slivers of land in the West Bank and Gaza Strip, Oslo ideologically disarmed the not-insignificant parts of the Palestinian political movement that advocated continued resistance to Israeli colonialism and sought the genuine fulfillment of Palestinian aspirations. The most important of these aspirations was the demand that Palestinian refugees have the right to return to the homes and lands from which they had been expelled in 1947 and 1948. Oslo made talk of these goals seem fanciful and unrealistic, normalizing a delusive pragmatism rather than tackling the foundational roots of Palestinian exile. Outside of Palestine, Oslo fatally undermined the widespread solidarity and sympathy with the Palestinian struggle built during the years of the First Intifada, replacing an orientation toward grassroots collective support with a faith in negotiations steered by Western governments. It would take over a decade for solidarity movements to rebuild themselves.
As it weakened the Palestinian movement, Oslo helped to strengthen Israel’s regional position. The illusory perception that Oslo would lead toward peace permitted Arab governments, led by Jordan and Egypt, to embrace economic and political ties with Israel under American and European auspices. Israel was thus able to free itself from Arab boycotts, estimated to have cost it a cumulative $40 billion from 1948 to 1994. Even more significantly, once Israel was brought in from the cold, international firms could invest in the Israeli economy without fear of attracting secondary boycotts from Arab trading partners. In all these ways, Oslo presented itself as the ideal tool to fortify Israel’s control over Palestinians and simultaneously strengthen its position within the broader Middle East. There was no contradiction between support for the “peace process” and deepening colonization—the former consistently worked to enable the latter.
It is worth remembering that amid the clamor of international cheerleading for Oslo—capped by the Nobel Peace Prize awarded jointly to Israeli Prime Minister Yitzhak Rabin, Israeli Foreign Minister Shimon Peres, and PLO leader Yasser Arafat in 1994—a handful of perceptive voices forecast the situation we face today. Noteworthy among them was Edward Said, who wrote powerfully against Oslo, commenting that its signing displayed “the degrading spectacle of Yasser Arafat thanking everyone for the suspension of most of his people’s rights, and the fatuous solemnity of Bill Clinton’s performance, like a twentieth-century Roman emperor shepherding two vassal kings through rituals of reconciliation and obeisance.” Describing the agreement as “an instrument of Palestinian surrender, a Palestinian Versailles,” Said noted that the PLO would become “Israel’s enforcer,” helping Israel to deepen its economic and political domination of Palestinian areas and consolidating a “state of permanent dependency.” While analyses like Said’s are important to recall simply for their remarkable prescience and as a counterpoint to the constant mythologizing of the historical record, they are particularly significant today as virtually all world leaders continue to swear allegiance to a chimerical “peace process.”[*]
One question that often goes unaddressed in analyses of Oslo and the two-state strategy is why the Palestinian leadership headquartered in the West Bank has been so willingly complicit with this disastrous project. Too often, the explanation is essentially tautological—something akin to “the Palestinian leadership has made bad decisions because they are poor leaders.” The finger is often pointed at corruption, or at the difficulties of the international context that limit available political options.
What is missing from this type of explanation is a blunt fact: some Palestinians have a great stake in seeing the continuation of the status quo. Over the last two decades, the evolution of Israeli rule has produced profound changes in the nature of Palestinian society. These changes have been concentrated in the West Bank, cultivating a social base that supports the political trajectory of the Palestinian leadership in its eagerness to relinquish Palestinian rights in return for being incorporated into the structures of Israeli settler-colonialism. It is this process of socioeconomic transformation that explains the Palestinian leadership’s submission to Oslo, and it points to the need for a radical break from the two-state strategy.
The social base of Oslo and the two-state strategy
The unfolding of the Oslo process was ultimately shaped by the structures of occupation laid down by Israel in the preceding decades. During this period, the Israeli government launched a systematic campaign to confiscate Palestinian land and construct settlements in the areas from which Palestinians had been driven out during the 1967 war. The logic of this settlement construction was embodied in two major strategic plans, the Allon Plan (1967) and the Sharon Plan (1981). Both these plans envisaged Israeli settlements placed between major Palestinian population centers and on top of water aquifers and fertile agricultural land. An Israeli-only road network would eventually connect these settlements to each other and also to Israeli cities outside of the West Bank. In this way, Israel could seize land and resources, divide Palestinian areas from each other, and avoid direct responsibility for the Palestinian population as much as possible. The asymmetry of Israeli and Palestinian control over land, resources, and economy meant that the contours of Palestinian state-formation were completely dependent on Israeli design.
Combined with military-enforced restrictions on the movement of Palestinian farmers and their access to water and other resources, the massive waves of land confiscation and settlement-building during the first two decades of the occupation transformed Palestinian landownership and modes of social reproduction. From 1967 to 1974, the amount of cultivated Palestinian land in the West Bank fell by about one third. The expropriation of land in the Jordan Valley by Israeli settlers meant that 87 percent of all irrigated land in the West Bank was removed from Palestinian hands. Military orders forbade the drilling of new wells for agricultural purposes and restricted overall water use by Palestinians, while Israeli settlers were encouraged to use as much water as needed.
With this deliberate destruction of the agricultural sector, poorer Palestinians—particularly youth—were displaced from rural areas and gravitated toward work in the construction and agriculture sectors inside Israel. In 1970, the agricultural sector included over 40 percent of the Palestinian labor force working in the West Bank. By 1987, this figure was down to only 26 percent. Palestinian agriculture’s share of GDP fell from 35 percent to 16 percent between 1970 and 1991.
Under the framework established by the Oslo Accords, Israel seamlessly incorporated these changes to the West Bank into a comprehensive system of control. Palestinian land was gradually transformed into a patchwork of isolated enclaves, with the three main clusters in the north, center, and south of the West Bank divided from one another by settlement blocs. The Palestinian Authority was granted limited autonomy in the areas where most Palestinians lived (the so-called Areas A and B), but travel between these areas could be shut down at any time by the Israeli military. All movement to and from Areas A and B, as well as the determination of residency rights in these areas, was under Israeli authority. Israel also controlled the vast majority of water aquifers, all underground resources, and all airspace in the West Bank. Palestinians thus relied on Israeli discretion for their water and energy supplies.
Israel’s complete control over all external borders, codified in the 1994 Paris Protocol on Economic Relations between the PA and Israel, meant that it was impossible for the Palestinian economy to develop meaningful trade relations with a third country. The Paris Protocol gave Israel the final say on what the PA was allowed to import and export. The West Bank and Gaza Strip thus became highly dependent on imported goods, with total imports ranging between 70 percent and 80 percent of GDP. By 2005, the Palestinian Central Bureau of Statistics estimated that 74 percent of all imports to the West Bank and Gaza Strip originated in Israel while 88 percent of all exports from those areas were destined for Israel.
With no real economic base, the PA was completely reliant on external capital flows of aid and loans, which were again under Israeli control. Between 1995 and 2000, 60 percent of the total PA revenue came from indirect taxes collected by the Israeli government on goods imported from abroad and destined for the occupied territories. These taxes were collected by the Israeli government and then transferred to the PA each month according to a process outlined in the Paris Protocol. The other main source of PA income came from aid and foreign disbursements by the United States, Europe, and Arab governments. Indeed, figures for aid measured as a percentage of Gross National Income indicated that the West Bank and Gaza Strip were among the most aid-dependent of all regions in the world.
Changing labor structure
This system of control engendered two major changes in the socioeconomic structure of Palestinian society. The first of these related to the nature of Palestinian labor, which increasingly became a tap that could be turned on or off according to the economic and political situation and the needs of Israeli capital. Beginning in 1993, Israel consciously moved to substitute the Palestinian labor force that commuted daily from the West Bank with foreign workers from Asia and Eastern Europe. This substitution was partly enabled by the declining importance of construction and agriculture as Israel’s economy shifted away from those sectors toward high-tech industries and exports of finance capital in the 1990s.
Between 1992 and 1996, Palestinian employment in Israel declined from 116,000 workers (33 percent of the Palestinian labor force) to 28,100 (6 percent of the Palestinian labor force). Earnings from work in Israel collapsed from 25 percent of Palestinian GNP in 1992 to 6 percent in 1996. Between 1997 and 1999, an upturn in the Israeli economy saw the absolute numbers of Palestinian workers increase to approximately pre-1993 levels, but the proportion of the Palestinian labor force working inside Israel was nonetheless almost half of what it had been a decade earlier.
Instead of working inside Israel, Palestinians became increasingly dependent on public-sector employment within the PA or on transfer payments made by the PA to families of prisoners, martyrs, or the needy. Public-sector employment made up nearly a quarter of total employment in the West Bank and Gaza Strip by 2000, a level that had almost doubled since 1996. More than half of the PA’s expenditures went to wages for these public-sector workers. The private sector also provided substantial employment, particularly in the area of services. These were overwhelmingly dominated by small family-owned businesses—over 90 percent of Palestinian private-sector businesses employ fewer than ten people—as a result of decades of Israeli de-development policies.
Capital and the Palestinian Authority
Alongside the increasing dependence of Palestinian families on either employment or payments from the Palestinian Authority, the second major feature of the socioeconomic transformation of the West Bank was related to the nature of the Palestinian capitalist class. In a situation of weak local production and extremely high dependence on imports and flows of foreign capital, the economic power of the Palestinian capitalist class in the West Bank did not stem from local industry, but rather proximity to the PA as the main conduit of external capital inflows. Through the Oslo years, this class came together through the fusion of three distinct social groups: “returnee” capitalists, mostly from a Palestinian bourgeoisie that had emerged in the Gulf Arab states and held strong ties to the nascent Palestinian Authority; families and individuals who had historically dominated Palestinian society, often large landowners from the pre-1967 period, particularly in the Northern areas of the West Bank; and those who had managed to accumulate wealth through their position as interlocutors within the occupation since 1967.
While the memberships of these three groups overlapped considerably, the first was particularly significant to the nature of state and class formation in the West Bank. Gulf-based financial flows had long played a major role in tempering the radical edge of Palestinian nationalism; but their conjoining with the Oslo state-building process radically deepened the tendencies of statization and bureaucratization within the Palestinian national project itself.
This new three-sided configuration of the capitalist class tended to draw its wealth from a privileged relationship with the Palestinian Authority, which assisted its growth by granting monopolies for goods like cement, petroleum, flour, steel, and cigarettes; issuing exclusive import permits and customs exemptions; giving sole rights to distribute goods in the West Bank and Gaza Strip; and distributing government-owned land below its value. In addition to these state-assisted forms of accumulation, much of the investment that came into the West Bank from foreign donors through the Oslo years— infrastructure construction, new building projects, agricultural and tourist developments—were also typically connected to this new capitalist class in some way.
In the context of the PA’s fully subordinated position, the ability to accumulate was always tied to Israeli consent and thus came with a political price—one designed to buy compliance with ongoing colonization and enforced surrender. It also meant that the key components of the Palestinian elite—the wealthiest businessmen, the PA’s state bureaucracy and the remnants of the PLO itself—came to share a common interest in Israel’s political project. The rampant spread of patronage and corruption were the logical byproducts of this system, as individual survival depended on personal relationships with the Palestinian Authority. The systemic corruption of the PA that Israel and Western governments regularly decried throughout the 1990s and 2000s, was, in other words, a necessary and inevitable consequence of the very system that these powers had themselves established.
The neoliberal turn
These two major features of the Palestinian class structure—a labor force dependent on employment by the Palestinian Authority, and a capitalist class imbricated with Israeli rule through the institutions of the PA itself— continued to characterize Palestinian society in the West Bank through the first decade of the 2000s. The division of the West Bank and Gaza Strip between Fatah and Hamas in 2007 strengthened this structure, with the West Bank subject to ever more complex movement restrictions and economic control. Simultaneously, Gaza developed in a different trajectory, with Hamas rule reliant on profits drawn from the tunnel trade and aid from states like Qatar.
In recent years, however, there has been an important shift in the economic trajectory of the Palestinian Authority, encapsulated in a harsh neoliberal program premised on public-sector austerity and a development model aimed at further integrating Palestinian and Israeli capital in export oriented industrial zones. This economic strategy only acts to further tie the interests of Palestinian capital with those of Israel, building culpability for Israeli colonialism into the very structures of the Palestinian economy. It has produced increasing poverty levels and a growing polarization of wealth. In the West Bank, real per-capita GDP increased from just over $3,100 in 2007 to more than $4,100 in 2012, the fastest growth in a decade. At the same time, the unemployment rate increased to 19 percent, among the highest in the world. One of the consequences was a profound level of poverty: income data found that around one in four Palestinians in the West Bank were suffering from “deep poverty” in 2010.
In these circumstances, growth has been based on prodigious increases in debt-based spending on services and real estate. According to the United Nations Conference on Trade and Development (UNCTAD), the hotel and restaurant sector grew by 46 percent in 2010 while construction increased by 36 percent. At the same time, manufacturing decreased by 6 percent. The massive levels of consumer-based debt levels are indicated in figures from the Palestinian Monetary Authority, which show that the amount of bank credit almost doubled between 2008 and 2010. Much of this involved consumer-based spending on residential real estate, automobile purchases, or credit cards; the amount of credit extended for these three sectors increased by a remarkable 245 percent between 2008 and 2011. These forms of individual consumer and household debt potentially carry deep implications for how people view their capacities for social struggle and their relation to society. Increasingly caught in a web of financial relationships, individuals seek to satisfy their needs through the market, usually by borrowing money, rather than through collective struggle for social rights. The growth of these financial and debt-based relations thus individualizes Palestinian society. It has had a conservatizing influence over the latter half of the 2000s, with much of the population concerned with “stability” and the ability to pay off debt rather than the possibility of popular resistance.
Beyond the impasse?
The current cul-de-sac of Palestinian political strategy is inseparable from the question of class. The two-state strategy embodied in Oslo has produced a social class that draws significant benefits from its position atop the negotiation process and its linkages with the structures of occupation. This is the ultimate reason for the PA’s supine political stance, and it means that a central aspect of rebuilding Palestinian resistance must necessarily confront the position of these elites. Over the last few years, there have been some encouraging signs on this front, with the emergence of protest movements that have taken up the deteriorating economic conditions in the West Bank and explicitly targeted the PA’s role in contributing to them. But as long as the major Palestinian political parties continue to subordinate questions of class to the supposed need for national unity, it will be difficult for these movements to find deeper traction.
Moreover, the history of the last two decades shows that the “hawks and doves” model of Israeli politics, so popular in the perfunctory coverage of the corporate media and wholeheartedly shared by the Palestinian leadership in the West Bank, is decidedly false. Force has been the essential midwife of “peace negotiations.” Indeed, the expansion of settlements, restrictions on movement, and the permanence of military power have made possible the codification of Israeli control through the Oslo Accords. This is not to deny that substantive differences exist between various political forces within Israel; but rather to argue that these differences exist along a continuum rather than in sharp disjuncture. Violence and negotiations are complementary and mutually reinforcing aspects of a common political project, shared by all mainstream parties, and both act in tandem to deepen Israeli control over Palestinian life. The last two decades have powerfully confirmed this fact.
The reality of Israeli control today is the outcome of a single process that has necessarily combined violence and the illusion of negotiations as a peaceful alternative. The counterposing of right-wing extremists with a so- called Israeli peace camp acts to obfuscate the centrality of force and colonial control embodied in the political program of the latter.
The reason for this is the shared assumption of the Zionist left and right wings that Palestinian rights can be reduced to the question of a state in some part of historic Palestine. The reality is that the overriding project of the last sixty-three years of colonization in Palestine has been the attempt by successive Israeli governments to divide and fracture the Palestinian people, attempting to destroy a cohesive national identity by separating them from one another. This process is clearly illustrated by the different categories of Palestinians: refugees, who remain scattered in camps across the region; those who remained on their land in 1948 and later became citizens of the Israeli state; those living in the isolated cantons of the West Bank; and now those separated by the fragmenting of the West Bank and Gaza Strip. All of these groups of people constitute the Palestinian nation, but the denial of their unity has been the overriding logic of colonization since before 1948. Both the Zionist left and right agree with this logic, and have acted in unison to narrow the Palestinian “question” to isolated fragments of the nation as a whole. This logic is also one wholeheartedly accepted by the Palestinian Authority and is embodied in its vision of a “two-state solution.”
Oslo may be dead, but its putrid corpse is not one that any Palestinian should hope to resuscitate. What is needed is a new political orientation that rejects the fracturing of Palestinian identity into scattered geographical zones. It is encouraging to see the mounting chorus of calls for a reorientation of Palestinian strategy, based on a single state in all of historic Palestine. Such an outcome will not be achieved solely through Palestinian efforts. It requires a broader challenge to Israel’s privileged relationship with the US and its position as a key pillar of US power in the Middle East. But a one- state strategy presents a vision for Palestine that confirms the essential unity of all sectors of the Palestinian people regardless of geography.
It also provides a path to reach out to Israelis that reject Zionism and colonialism through the hope of a future society that does not discriminate on the basis of national identity, and in which all may live regardless of religion or ethnicity. It is this vision that provides a route to achieving both peace and justice.
•••
A decade has passed since this piece was first written, and in the midst of Israel’s brutal war against Gaza, its main argument sadly stands true today. Since 2013, the fragmentation of the Palestinian population has become even more sharply manifest through the now sixteen years of encirclement, siege, and blockade of the Gaza Strip; ever-tightening restrictions on movement and Israel’s control of the political economy of the West Bank; and the continued denial of the right of return to Palestinian refugees displaced across the Arab world. At the same time, the mainstream of Israeli politics has steadily adapted to the violent discourse of the far right and ultra-nationalist settler- bloc, emboldening the state’s on-going policies of repression, occupation, and Apartheid, including against Palestinian citizens of Israel. The Palestinian Authority and the Gulf states have also continued along the path described in this piece. The PA’s continued role as gendarme for Israeli policy in the West Bank has deepened and the PA President Abu Mazen’s inability to respond meaningfully to the atrocities in Gaza is striking. At the regional level, the last decade has shown the open willingness of Saudi Arabia, the United Arab Emirates, and other smaller Gulf states to normalize political and economic relations with Israel. The longstanding US strategy to knit together its two main pillars of support in the Middle East—Israel and the Gulf states—has moved forward much more quickly than anyone could have possibly predicted, reaching denouement in the so-called Abraham Accords. Yet, as with every such similar attempt over the last six decades, the Palestinian people have continued to reject this kind of regional normalization.
But given the brutality of the current moment, we must remember that a permanent ceasefire is not a cessation of Israeli violence, and when the bombs stop falling on Gaza—as they eventually will—that any return to an Oslo-type framework will not represent any lessening of Israel’s settler colonial project. There is no doubt that this is the post-war endgame desired by the main Western powers; and in this they will certainly receive the blessing of the PA, the Gulf Arab states, and other regional actors such as Egypt. The rhetoric of both the Biden Administration and the supposedly more “reasonable” European states point unequivocally to this conclusion. As such, it is crucial to reassert a basic historical fact: Israeli strategy has always been based on the periodic use of extreme violence, twinned with the illusion of a “peaceful” negotiated two-state solution. These poles are part of the same process, serving to reinforce the subjugation and fragmentation of the Palestinian people.
In this context, the goal of a single, democratic state that encompasses the entirety of the population across historic Palestine remains the only viable long-term route out of the current situation. In making the case for this slogan, however, we need to move beyond simple appeals to liberal notions of citizenship, and instead foreground the class and imperial interests that continue to sustain the status quo. What role does Israeli settler-colonialism —and thus the fragmentation of the Palestinian people—play in the architecture of US power in the Middle East? How does this connect to the place of other powers, especially the Gulf Arab states, in the regional capitalist order? What are the class dynamics of Palestinian society—across all its multiple geographies—and how have these been shaped by both Israeli violence and imperialist-backed plans such as the Oslo Accords? Clarity on these kinds of fundamental questions is more urgent than ever.
***
The essay was first published in Jacobin, 21 April 2013, and republished by Verso with permission. It has been updated and extended by the author for this ebook.
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*In 1993, Saïd “delivered the prestigious Reith Lectures for the BBC and seized the opportunity to emphasize the importance of independent critical activity: ‘Despite the abuse and vilification that any outspoken supporter of Palestinian rights and self-determination earns for himself or herself, the truth deserves to be spoken, represented by an unafraid and compassionate intellectual. . . . The great euphoria produced by . . . [the Oslo Accords] . . . obscured the fact that far from guaranteeing Palestinian rights, the documents in effect guaranteed the prolongation of Israeli control over the Occupied Territories. To criticize this means in effect taking a position against ‘hope’ and ‘peace’.” The Selected Works of Edward Said – 1966-2006, Introduction, Vintage Books, 2nd ed., 2019, Introduction, xl.
“The agreement amounted to an effort by Arafat to preserve the PLO and Arafat’s own authority, which had been profoundly weakened by the PLO’s support of Iraq during the Gulf War. Said called on Arafat to resign, only to have the Palestinian authority respond with a ban on Said’s books. Said continued his caustic criticism, largely through his biweekly columns in Al-Hayat and Al-Ahram Weekly. The pieces were tough and uncompromising in their demands for clear vision and justice, stating that if peace were to have any substantive meaning, it could not be brought about under duress. For Said, the history of imperially administered partitions in India, Pakistan, Cyprus, and Ireland was the source of violence, not a solution to it. Observing that Oslo amounted to little more than an enforced policy of demographic separation between two peoples whose lives were inextricably intertwined, Said, in a 1999 article in The New York Times Magazine,63 called for the establishment of a binational Israeli-Palestinian state. He argued that real and lasting peace was possible only if the terms of citizenship were made inclusive, democratic, and not based on principles of racial or religious difference.” Ibid., from the Introduction by Moustafa Bayoumi and Andrew Rubin, xli
Further readings
The reality of the Palestinian struggle
A powerful group of Palestinian capitalists are profiting off occupation
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