Israel Feature

Israel and the Palestinians Reopen Talks

Almost two decades of sporadic dialog between Israel and the Palestinians, often interrupted by violence, have not brought peace much closer. Agreement remains elusive on the core issues of security, defined borders, sharing Jerusalem, Palestinian refugees, Jewish settlements in the West Bank, and water sources.

The resumption of direct peace talks between Israel and the Palestinians in September 2010 was met by some apathy, cynicism and even hostility in both communities. The Israeli government determined to continue construction in Jewish West Bank settlements; the Palestinians retorted that they would abandon the talks; U.S. envoy George Mitchell, a key negotiator in Northern Ireland, cheerfully shared (at this writing) that there was more progress behind the scenes than appeared. Peace remains a challenge.

A Vibrant Economy

Israel's founding fathers were socialists, with deep roots in its early agrarian economy. But poor in natural resources—-though natural gas has recently been discovered offshore—-Israel always relied on the human factor. Diamond-cutting was an early initiative of Jewish refugees from pre-war and Nazi-occupied Holland and Belgium, and Israel produces 40% of the world's cut and polished stones. The real story, however, is high-tech.Israel is third on the list of NASDAQ-listed companies, after the United States and Canada. Israeli high-tech companies with attractive expertise are constantly being snapped up by big foreign corporations.

Sophisticated, technology-based agriculture has also done very well, but its share of the country's exports has dropped from 60% in the 1950s to under 2% today as the economy has burgeoned and reinvented itself. Israel is now defining itself as a source for clean technology, with companies engaged in solar power, wastewater, electric car, fuel cell, and fuel consumption technologies.

The country's financial environment, including vigilant bank regulation, helped it weather the recent global crisis better than most. The Israel shekel remained remarkably strong, and relations with the European Union were upgraded. At the same time, one out of every five Israeli families lives below the poverty line. The gap between the haves and have-nots is high, and real wealth and influence are concentrated in the hands of the very few. There is public awareness of the problem, yet in a Gallup World Poll, conducted in 155 countries between 2005 and 2009 to find the world's happiest societies, Israel tied for eighth place with Canada, Australia and Switzerland.

Greening Israel

From its earliest years of statehood, Israel had to consider its lack of natural water resources and find ways to compensate, from using drip irrigation for crops and gardens to utilizing rooftop solar panels for heating water. As clean technology, environmental products, and green concepts have become popular, Israel has kept apace, with water treatment technologies that are used locally and exported, as well as solar energy installations in the Negev Desert.

Green housing is also taking root, from private initiatives using natural materials such as mud bricks to government green building standards requiring the use of recycled materials, solar electricity panels, and energy-efficient insulation. Cities are widening their recycling programs, encouraging bikers, and improving public transportation. Municipalities are also making room for community gardens while banning watering private lawns. Organic farms have become a trend, providing seasonal produce. as well as artisanal goat cheeses, honey, wines, and olive oil.

A New Immigrant Issue

Modern Israel was born in 1948 as a Jewish nation-state. The country's Jewish population tripled in the first decade of independence, absorbing refugees from postwar Europe and a hostile Middle East. Beginning in 1989, three-quarters of a million people immigrated from the former Soviet Union under the "homecoming" clauses of the Law of Return. Tens of thousands of Jews from remote Ethiopia were woven into Israel's colorful social fabric in the same period.

More recently, African refugees and illegals, and Asians with expired work visas, have presented Israeli authorities with new challenges. In the absence of clear legal guidelines, the resident permit policy has been inconsistent, and the deportation process of illegals problematic. What has moved many Israelis are the hundreds of children of foreign workers who were born in Israel, speak fluent Hebrew, and know no other home. It's the complex problem of illegal immigrants versus the tradition of harboring the homeless—-a poignant issue for Jewish Israelis.

The Gaza Conundrum

The Palestinians are divided. The secular Fatah faction, the nominal leadership, is dominant in the West Bank. Hamas, an extreme Islamicist group that rejects any accommodation with Israel, took control of the Gaza Strip in 2007. Rocket attacks from Gaza against civilian targets in Israel became more frequent. The Israeli military retaliation in late 2008 continues to reverberate in diplomatic circles. Rocket attacks were drastically reduced, but fresh supplies of ground-to-air and anti-tank missiles are coming into the Gaza Strip from Egyptian Sinai through smugglers' tunnels. In 2011, Fatah and Hamas are trying to unify and make peace, creating uncertainty for Israel and hope for their own.

Israel's Other Neighbors

The start of 2011 brought surprising changes to the Middle East, with protests known as the Arab Spring that have at this writing overthrown the heads of state in Tunisia and Egypt. Those uprisings have had little effect on Israel, which continues to feel relieved that ultra-hostile, almost-nuclear Iran doesn't live next door, but its surrogates do. Hezbollah, a militant Lebanese Shi'ite organization, has been harassing Israel since the early 1980s, even after Israel's full withdrawal from Lebanese territory in 2000. A massive confrontation between the two in 2006 bled both sides, but brought some quiet to Israel's northern front. Hezbollah (at this writing) is a partner in Lebanon's ruling coalition, giving that government—-in Israel's view—-shared responsibility for attacks against Israel.

While neighboring Syria has kept its border with Israel quiet since the mid-1970s, it is a conduit for resupplying the Hezbollah with long-range missiles, compliments of Iran. The recent uprisings in Syria could hinder that relative quiet, but it's too soon to tell. Meanwhile, Israel continues to signal Syria that it is interested in defusing tensions. An eventual peace agreement with Syria would entail Israel returning the Golan Heights, captured in 1967. It's not a simple security concession: a poll in 2008 found that more Israelis objected to relinquishing the Golan Heights in an accord with Syria than to dividing Jerusalem in a deal with the Palestinians.