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As a response to the collapse of the Israeli national consensus and growing social unrest created by the peace process, the Labor and Likud parties came to an agreement, known as the Beilin-Eitan agreement, over the future of the West Bank and Gaza Strip. According to this agreement, Israel will accept the creation of a quasi-sovereign Palestinian state in the Occupied Palestinian Territories. The Beilin-Eitan agreement was the first political reference to the fact that Israel attempts to annex settlement blocs in the West Bank. 

Without resolving the social unrest or the parliamentary crisis created by this social unrest, the Beilin-Eitan agreement became Israel’s new national consensus.

All mainstream political parties support this consensus, including liberal Meretz and rightwing Israel Beitenu. The differences between the political parties are over (1) to what extent Israel should retreat in the West Bank; and (2) is the mainstream Fatah able to govern the Palestinian state to be created?

The answers to these questions define the political positions defended by various politicians.

For example, Ehud Barak, Chairperson of the Labor Party and Minister of Defense, does not believe that Abu Mazen will be able to take control of the Palestinian state, and that following an Israeli retreat Hamas will take de facto control of the West Bank, as it did in Gaza. Therefore, Barak objects to any Israeli retreat in the West Bank before new systems to stop Qassam missiles will be developed.

All Israeli mainstream parties support the development of these systems, and view them as complimentary to the Separation Wall, but only Barak and the Likud condition a retreat on the development of such systems. According to Haaretz (19 October), developing anti-Qassam missiles will take at least two years.

The question regarding how much territory should Israel annex is also central for the Israeli political system. Jewish ultra-orthodox Shas and Israel Betenu are not prepared for concessions in the municipal area of Jerusalem. Both parties have declared that they will leave the government if the question of Jerusalem is included the final declaration of the Annapolis summit. In addition, Israel Betenu demands that territory inside the green line and east of Qalquilia and Tulkarem—an area heavily populated by Palestinian citizens of Israel—be included in the Palestinian state as part of a land exchange.

Palestinians see the 1993 exchange of letters between Yasser Arafat and Yitzhak Rabin, in which Arafat recognized the state of Israel in its pre-1967 borders, as conceding 78 percent of their historical territorial demands. Accordingly, there is no room for additional concessions in Jerusalem or other parts of the Occupied Palestinian Territories.

Abu Mazen and the Salam Fayyad government will become a marginal minority in the event that they accept even the most generous of the Israeli propositions. They will lose the support of Fatah and perhaps even the loyalty of the armed forces, including the Presidential Guard, trained by US advisors.

With this political panorama, it is doubtful that the gap between Palestinian and Israeli negotiators will be resolved soon and make possible the Annapolis summit. In the meantime, the economic, social and political situation of the Palestinians in the West Bank and Gaza continues to deteriorate rapidly.

However, without closing this gap it will be impossible for the US to promote a coalition of pro-American regimes in the region, dictatorships euphemistically called “moderates” vis-à-vis the Iran-Syria-Hezbollah-Hamas coalition.

The question is whether Israel and the US will act alone against Syria and Iran, alienating US Arab allies after failing to gather an Israeli-Palestinian summit this fall. The only alternative to it will be that the US remains inactive for the rest of Bush administration.

A second question is what will happen to the Abu Mazen-Fayyad government? There exist  numerous indicators to suggest that Fatah will go through a major split in which the grassroots and young generation of the party will confront, even militarily, the Palestinian Authority. It is possible that the Palestinian people will find themselves in a period of infighting once more. But this time, it will be inside Fatah.