Leverage on Israeli Defiance on Settlements

UPDATE: Netanyahu Nyets  any Accommodation/Freeze  on Israeli Settlements on Palestinian Lands The US and UN will have to look at Plan B to rein in Israeli Intransigence

Despite warnings from the US and Rebuke from Britain, Israel continues to increase Jewish-only settlements in disputed territories in Palestine/Israel. Despite several warnings from various US leaders the Israelis continue to forge ahead with 1600 new apartments in East Jerusalem – an area that the Palestinians claim as their capital.  This is a contest of wills that has been brewing for the last 7-8 months as Israelis defied US request for a freeze on settlements back in July 2009. The problem is that the US cannot afford to be seen as uneven-handed if it truly wants to broker and  achieve any peace accord between the Israelis and Palestinians. So one asks does the US have any leverage against this continued defiance from Jerusalem?

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As it turns out the US does have some powerful leverage in the form of nearly $2.5billion of annual military aid to Israel. As the chart shows, this amounts to over $7 million of aid to Israel every day. See here for all the details on 2009 foreign aid to Israel. In comparison, the Palestinians get no military aid and drastically varying amounts of foreign aid from the US ranging from a low of $50million in FY2007 to a high of $274 million in FY2005.

Clearly Foreign Aid to the Mid East and Israel and Palestine is hardly equitable. However, the US could change that for the better by reducing the military aid to Israel by $400-500million and use those monies to help build up the Palestinian infrastructure such as schools, hospitals, roads, and housing with some grants and other low cost loans [might as well do better than give  all the low cost loans to Wall Street Banks]. Such an action would have 4 benefits:
1)It would help reduce the number one problem in the West Bank – 30-40% unemployment among Palestinians.
2)It would get at the problem of poor living conditions in the West Bank and Gaza areas and act as pull to prosperity which would then make investing in peace with Israel a more palatable proposition.
3)It would strengthen the Fatah/Abbas legitimacy versus Hamas in Gaza strip. The delicate point is how much aid should be earmarked for the 1million Palestinians in the Gaza strip and who should be responsible for its distribution. If done properly, aid to Gaza   would counter the Iranian influence in the area. Qualified NGOs might be leaders and distributors of project money in Gaza.
4)It would send an unequivocal signal to the Israelis that the US is serious about achieving an independent Palestinian state and snuff out the Israeli idea of doing a Handy Frog on the Palestinians – slowly  take away bits and pieces of the West bank and Palestine in order to establish in fact a Suzerain Palestine totally dependent on Israeli lese-majesty. Tom Friedman of the NYTimes speaks most eloquently about the nature of the problem while Robert Wright at the NYTimes speaks of the tortured nature of speaking about recent Israeli actions.
In sum, the US has ample room to maneuver at very low economic cost  but not so political as AIPAC, the Israel lobby group,  is one of the most influential in Washington. Chalk up yet another powerful test for the Obama administration.

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