The War in Gaza and the Death of the Two-State Solution

The outcome of the war in Gaza is already clear. Israel is so strong relative to Hamas that it can both defeat Hamas and establish almost any new security structure in Gaza that Israel wants. It does face limited threat from attacks by Palestinians in Israel and in the West Bank, but they are unlikely to rise above sporadic incidents of violence. In practice, Israel will be able to create almost any security structure in Gaza that it wants to limit Palestinian action in Israel and the West Bank to demonstrations and small acts of violence or terrorism.

As for the rest of the Arab world, Israel does not seem to face any major direct military threat from its Arab neighbors. Lebanon is in chaos. Hezbollah can raise the ante in terms of missile attacks and cross-border infiltration but is vulnerable to far superior Israel air and missile attacks. Egypt is strong in military terms but is no longer organized and prepared to fight Israel and is caught up in its own economic crisis and political problems. Jordan now has only limited military forces, is not organized to fight Israel, and has its own internal economic and political challenges. Syria’s Assad regime and its military forces are still caught up in its own civil war, and an unstable Iraq lacks the capability to project meaningful forces into the Levant.

The Arab Gulf states are not a meaningful military threat. In an odd way, Iran may actually add to Israel’s regional security. Iran can threaten and provoke Israel and provide money and limited arms supplies to Palestinian fighters. It might carry out limited raids against some Israeli targets. But Iran cannot project meaningful military power other than long-range missile strikes to challenge Israel and faces the threat of far higher levels of Israel retaliation.

More importantly, and despite some recent diplomatic contacts, Iran does present a serious military, political, and sectarian threat to the Arab Gulf states. This threat forces them to focus on Iran and limit any support of Hamas and the Palestinians. The Arab Gulf states may provide some aid money and political support, but they will continue to focus on Iran and not take any serious military action or risk a major political confrontation with Israel or split with the United States.

Four Enclaves Instead of Two States

As Hamas’s invasion demonstrates, Israel’s most serious current threat is internal and to some extent self-inflicted. It is driven by Israel’s failure to offer Palestinians either real statehood or security and equal economic and political opportunity. Instead of statehood, Palestinians are divided into four Israeli-controlled enclaves, each with different causes of tension between Israel and the Palestinians and somewhat different pressures on its resident Palestinians.

  • The first such enclave that makes up the “no-state” solution is the greater Jerusalem area, with tensions and conflicts over control of its older central core, its holy places, housing and business restrictions on Palestinians in East Jerusalem, a steadily larger Israeli majority and control over greater Jerusalem, and exceptional security limits.
  • The second enclave is the rest of Israel, with somewhat different regulations on Palestinian rights, citizenship, and movements, and tight surveillance and security.
  • The third is the West Bank, with the hollow shell of a Palestinian government, de facto Israeli security control over Palestinian security forces, tight control over Palestinian movements and access to the rest of Israel, and a steadily growing presence by Israeli “settlers” that is rising sharply with the support of the Netanyahu government.
  • The fourth enclave is Gaza, which presents by far the worst set of pressures on Palestinians. It has some 2.1 million Palestinians and no Israeli Jews and is only twice the size of the greater Washington D.C. area. It has no major industry or exports. It depends on Israel for most of its potable water and electric power. Its small garden crop areas are part of the Israeli security zone. It has close to 50 percent unemployment and 50 percent direct dependence on foreign aid, with another 20 percent receiving some aid. It has one of the youngest populations and the highest number of children and young adults of any region or country in the world. It is separated from the rest of Israel by a wall and has no meaningful airports or free access to the Mediterranean. It potentially is dependent on jobs in Israel, but Israel’s security regulations have sharply limited such opportunities and seem to have increased them over the last years while maintaining tight control over any movements outside Gaza or return to Gaza.

The Crisis in Gaza before the October 2023 Fighting Began

Estimates differ as to the impact of the history of wars, violence, tensions, and reprisals that have affected Gaza and Palestinians between the Israeli withdrawal of all Israelis from some 21 settlements in Gaza by September 2005 and the situation at the time Hamas attacked Israel. However, virtually all sources agree that Gaza’s population has saturated a small enclave dependent on Israel for potable water, electricity, outside jobs, and food imports.

Several reputable sources may disagree in some details but also warn just how critical the situation was when Hamas attacked and how serious further Israeli cuts to Gazans’ ability to leave and return to Gaza and cut to the flow of foreign aid, trade, Gazan exports, and food imports, and Israeli supply of electricity and potable water to Gaza can be. They also warn just how much more drastic the effects of the major offensive Israel launched against Gaza on October 11, 2023, could be, particularly if it escalates to major Israel attack and occupation.

The U.S. Census Bureau International Database data estimates that Gaza’s Palestinian population increased from only 265,800 in 1960 to 342,700 in 1970, 431,600 in 1980, 645,100 in 1990, 1,1 million in 2000, 1.5 million in 2010, and 2.1 million in 2023 and that it will rise to 2.4 million, 2.9 million in 2040, and 3.2 million. It shows that Gaza already has a population density of 5,839 per square kilometer, most of which is under 14 years of age and well over half of which is under 19. 

The CIA World Factbook states that peace negotiations in Gaza have virtually stalled since 2001, and that once Hamas forces violently seized power from the Palestine Liberation Organization in June 2007 living conditions and freedom of movement have declined while unemployment and dependence on aid have sharply increased.

“Israel and Egypt have enforced tight restrictions on movement and access of goods and individuals into and out of the territory Israel and Egypt have enforced tight restrictions on movement and access of goods and individuals into and out of the territory.” It states that Gaza only has a territory of some 360 square kilometers, and border with Israel only 59-kilometer long, with a 13-kilometer border with Egypt, plus a 40-kilometer coastline where Israel closed its maritime area in January 2009, and which has since been blockaded by the Israeli navy.

  • Gaza’s only resources are limited areas of arable land and natural gas (whose development Israel controls), and its population was 1.99 million in 2022, with 42.5 percent aged 14 or younger and 21.7 percent aged 15 to 24. Its rate of urbanization was over 77 percent and steadily growing. Its youth unemployment rate, including the impact of a higher rate of employment in the West Bank, was still 41.7 percent in 2021.
  • Its economy suffers from “movement and access restrictions, violent attacks, and the slow pace of post-conflict reconstruction continue to degrade economic conditions in the Gaza Strip, the smaller of the two areas comprising the Palestinian territories. Israeli controls became more restrictive after HAMAS seized control of the territory in June 2007. Under Hamas control, Gaza has suffered from rising unemployment, elevated poverty rates, and a sharp contraction of the private sector, which had relied primarily on export markets.”
  • The CIA data also indicates Gaza per capita income is only around $6,200 a year and has declined since 2017.

UN agencies also provided the following reports on Gaza’s problems before the current fighting, although many Israeli experts feel they overstate Palestinian problems and understate the degree to which failures and divisions in Palestinian governance have caused these problems. The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) reported before the fighting that:

  • More than half of Gaza’s population (1.3 million) need major amounts of aid with 33 percent under serious stress, 29 percent with severe needs, 17 percent with extreme-catastrophic needs, and a total of 58 percent needed humanitarian aid. OCHA’s summary of humanitarian needs before the October fighting began stated: “29 per cent of households were categorized as ‘catastrophic’ or ‘extreme’, compared with 10 per cent in 2021. . . . Recurrent escalation of hostilities in Gaza, the most recent one in early August 2022, caused fatalities, injuries, mental health needs, destruction of homes and structures, and has aggravated Gaza’s chronic shelter, infrastructure, and energy deficits. The restrictive and discriminatory planning regime.” It also stated that there were only 17,000 Palestinian work permits holders that could work in Israel although other estimates cite 19,000. This is a tiny level of external employment compared to the size of the work force.
  • “This land, sea and air blockade on the Gaza Strip intensified previous restrictions, imposing strict limits on the number and specified categories of people and goods allowed through the Israeli-controlled crossings. . . . In June 2007, following the takeover of Gaza by Hamas, the Israeli authorities implemented a blockade/movement restriction citing security concerns, virtually isolating the 2.2 million residents in Gaza.”
  • “The Gaza Strip is one of the most densely populated areas in the world at 5,900 residents per square kilometer, with 41 per cent of the population in Gaza under the age of 15…The recent (pre-October 2023) escalation of hostilities has heightened risks and exacerbated the vulnerabilities of young people in Gaza, resulting in high rates of anxiety, depression, and post-traumatic stress disorder, all of which may increase high-risk behavior. At the same time, rapid population growth coinciding with eroding development gains and limited resources results in further deterioration of living standards and development prospects in Gaza.”
  • “During the second quarter of 2022, the unemployment rate was 44 per cent in the Gaza Strip . . . Food insecurity in Gaza remains high at 63 percent. While 93 per cent of food insecure families felt worried about not having enough food to eat, 55 per cent of families had to skip a meal as a coping mechanism.”
  • “The water crisis in Gaza, due to over-extraction from the coastal aquifer, sea water infiltration and pollution, is particularly severe and an ever-growing population lacks access to clean water supplies. This affects over 90 per cent of households in Gaza, impacting health and general hygiene and causing more than a quarter of all childhood disease.”
  • “Under the blockade of the Gaza Strip, livelihood and employment opportunities are extremely limited. More than half of Gaza households reported NGO or charity assistance as one of their primary sources of income in the 30 days prior to MSNA data collection. Taking on debt, primarily to meet basic needs, was a widespread practice, with 83 per cent of households reporting having outstanding debt and 79 per cent of households having taken on recent debt in the 3 months prior to data collection. These factors, combined with the fact that 60 percent of households reported a member of their household unemployed and unable to find work, further highlight the socioeconomic vulnerability of Gaza households. With 93 per cent of Gaza households having employed at least one type of coping mechanism due to a lack of food or none.”

A Hamas Attack That Could Only Make Things Far Worse

In fairness to Israel, it is important to remember that Israel withdrew its settlers from Gaza in a search for peace as well as security and did make continuing efforts to reach a settlement and working relationship with Hams. The security measures Israel took before October 2023 were also driven by the threat or reality of Palestinian violence, terrorist acts and Intifadas, and a long cycle of broader Arab-Israeli conflict helped create many of these Israeli security arrangements and restrictions.

It is equally clear that Hamas and the Palestinian Islamic Jihad either had to expect a military miracle or knew all too well that their attack might win limited “victories” but would most certainly create a defeat and new Israel military action and security measures that would make life in Gaza far worse.

It is easy to talk about Israeli “abuses” of human rights, but there has never been a clear line distinguishing between war and peace since at least 1948, and the sheer violence of Hamas’s recent attack on Israel almost instantly made it focus on war rather than peace.

The growing human costs of the war in Gaza were clear as early as October 10, 2023, when Israel stated it has halted exports of water, electricity, fuel and closed its border to trade and new aid deliveries, and the OCHA reported major air attacks on civil targets and the displacement of hundreds of thousands of Gazan civilians.

The United Nations Relief and Works Agency (UNRWA) reported that it was able to maintain some aid and medical activities and some water distribution, but that “the Israeli Authorities closed all crossings from the West Bank into East Jerusalem and Israel for Palestinian ID holders, including UN and International NGOs staff.”

The fighting halted all solid waste collection and transfer to landfill activities remain on hold. Transfer of solid waste from shelters to the landfills has started, and that “nearly half a million Gaza’s (112,000 families) have not been able to get their food rations since UNRWA food distribution centers closed on 7 October.” 

Israel has made it clear that it is planning a major land-air operation to follow, and the damage to Gaza’s civil population seems certain to spiral upwards in the days to come with no predictable end. The fighting seems likely to well end in either a lasting Israeli occupation and security presence in Gaza or a whole new set of restrictions on Gazans and border barriers. It is equally clear that that the ongoing fighting is likely to do more to divide Israeli and Palestinians than push them toward a peace settlement.

The Death of the Two-State Solution

The ongoing fighting now warns that two-state solution may not be totally dead but is so close to death that efforts to revive it are likely to be little more than acts of zombie diplomacy. The Palestinian government in the West Bank is a hollow shell of a real and effective government. The Palestinian Authority has become a failed democracy with a weak and ineffective leader who has stayed in office for far too long. It has serious levels of corruption, lacks the ability to reshape a weak and crippled economy, and its efforts to create effective security forces have not been effective enough to deal with even its current challenges.

As for Hamas, it came to power in Gaza in 2006 and 2007, in large part because of the ineffectiveness and corruption of the PLO. The result, however, is that Hamas’s militancy and attacks on Israel from 2007 to 2023 have led Israel to take security measures that made the plight of ordinary Gazans far worse. As a result, Israel must fight a war where there now is no clear alternative to Hamas in Gaza or indication that Gazans would want to be governed by the Palestinian Authority in the West Bank.

Israeli anger and the hardline nature of the Netanyahu-dominated joint government—its past support of new settlements and hardline anti-Palestinian positions—make it all too likely that Israel’s solution to “peace” will be to isolate or occupy Gaza, to exert even more economic and security pressures on Gaza’s population, introduce new security restrictions on Palestinians in Jerusalem and the West Bank, expand Israeli settlements and the Israeli presence in Jerusalem, and take only cosmetic diplomatic steps toward a true political and solution to creating a viable peace.

The end result is all too likely to be futile outside efforts to continue the failed approach to peace that has been shaped by the negotiating efforts to create a two-state solution to the Arab-Israeli conflict ever since the Camp David Accords in 1978. This series of “wars to end all peace” has now gone on for nearly half a century, and every effort to negotiate a real two-state solution has ended in failure, a new round of fighting or Intifadas, and more tension between Israel and the Palestinians.

All diplomatic good intentions and rhetoric aside, continuing to focus on the two-state solution will only continue a history where every effort to create such a lasting peace since 1948 has led to new wars and new tensions between Israel and the Palestinians. If anything, such efforts have so far helped prevent the creation of a stable political and economic structure for the Palestinians and helped create a lasting threat to Israel.

There Is a More Meaningful and Immediate Option

This does not mean that a more meaningful effort to negotiate more meaningful and practical peace efforts is not worth trying. What it does mean is that it may be far more important to try to create immediate steps to create a more stable “no-state” solution.

One such option is to put international pressure on the Israeli government to halt the expansion of settlements and ease restrictions on the civil life of some estimates indicate around 1.9 million Palestinians in Israel proper and more than two million in the West Bank. Another is to exert pressure on Israel to limit its postwar economic isolation of Gaza’s two million residents while recognizing that Israel does have very real new internal security needs. It seems equally important to ensure that the present arrangements for Jordan’s role in support of the Al Aqsa Mosque continue, along with the restrictions on Israeli religious ceremonies on the Temple Mount.

At the same time, it will be critical to minimize any “blame games” by the U.S. and international community that hold either Israel or all the Palestinians to blame for the current crisis. U.S. and international community need to focus on steps that will limit the impact of Hamas’s invasion and Israel’s war in Gaza and this aftermath.

The key near-term approach to such an effort to ease the risks of a “no-state solution” may be international efforts to offer major new postwar aid and opportunities to the Palestinians in Gaza and the West Bank on a conditional basis. Offering such aid to the Palestinians, supported by active efforts to ensure human rights in ways that did not cripple Israel’s internal security programs, would at least offer a tangible way to move toward a more stable peace.

The present levels of poverty and unemployment in Gaza have made popular support of Hamas and violence all too serious, and Israel’s future wartime and postwar security efforts will almost certainly make this situation far worse. The same may be true to a lesser extent of the war’s impact on Israeli and Palestinian actions in the West Bank. Once again, the gap between Israel and West Bank incomes and employment opportunities is a key source of its tensions and violence.

At the same time, such international aid must be conditional on Palestinian non-violence, on ensuring that it is independent of Israeli political and security interests, and on providing effective outside international management and planning that ensures such aid is used honestly and effectively.

Such efforts clearly will not shape a lasting peace but can have a quick practical and political impact. They deal with the most urgent practical concerns of most Palestinians without affecting the security and income of Israel’s Jewish citizens. In a world where the “no-state” solution seems to be the only practical near-term outcome of the present war for at least several years in the future, aid at least is a potential step forward and a way of bringing a more productive pause in the fighting.

Anthony H. Cordesman

Anthony H. Cordesman

Former Emeritus Chair in Strategy