Arabs (particularly those who have chosen to call themselves Palestinians in recent years) term the "settlements" a naked piece of plunder on the part of the land-hungry Israelis and their government.
Both sides are right. That is what makes the settlement issue so contentious, so unamenable to a mutually unsatisfactory compromise.
There is another piece of territory currently occupied by Israel which is even more a bone in the throat of peace. That territory is the Golan Heights.
The real estate in question is some 469 square miles of the Golan plateau which was captured from Syria during the Six Day War. It is a mixture of mountains and flatlands at the southern tip of the Anti-Lebanon Mountains which was used by Syria prior to June 1967 as a position from which to bombard Israeli territory near the Sea of Galilee.
Israel claims the right to keep the territory under the "secure and defensible borders" provision of UN Security Council Resolution 242. Syria demands the return of the Golan Heights under the "must withdraw from territories" clause of the same Resolution.
(A linguistic note: The English language version of the Resolution lacks a definite article modifying the word "territories" while the French version--which governs equally with the English--employs the definite article "the" as a modifier of "territories." Out of such differences are legal careers and wars made.)
The Israeli assertion that maintaining an occupation of the Golan is required by legitimate national defense requirements has been severely enervated by the success of the UN Disengagement Observer Forces along the present border between Syria and Israeli occupied Golan. Since 1974 the UNDOF has monitored the border area such that no significant breaches of the peace have occurred. It would seem rational that thirty-five years of successful international peace keeping should have calmed Israeli fears of Syrian aggression through the Golan.
While Israel did return a small slice of the occupied territory to Syria, GOI did pass an enactment in 1981 applying Israeli law and government to the Golan. This condition has not altered despite repeated demands by the UN for the retraction of the enactment and, most recently in 2005, a complete Israeli withdrawal from the Golan.
The actual reasons for the Israeli intransigence on the Golan which have been expressed both repeatedly and recently are two. They are water and settlements.
Hidden behind GOI's protestations that Syria cannot expect the Golan Heights to be handed back "on a silver platter" as long as that country snuggles up with Iran and Iran's proxy Hezbollah and crouching behind defiant statements to the effect that Israel will never allow the Golan to be a launching pad for Islamist jihadist rockets, is the ground truth.
The hills of the Golan provide runoff to a number of rivers all of which run into Israel. And, Israel needs the water badly. Water is the T. rex at the dining table. It is the ultimate limiter to Israeli expansion be it residential, industrial or, most of all, agricultural. Even though Israel leads the world in the efficient exploitation of limited water resources for agrarian and other uses, there are very real limits to efficient exploitation and an ethic of conservation.
To put a number on reality, the Golan Heights watershed provides Israel with at least fifteen percent of its water. As one bred and born in the arid lands of New Mexico, the Geek well understands that he who controls the water controls the range. In this case the range in question is the future of Israel.
Israel has been quietly nailing down its claim to the Golan with settlements. Presently there are approximately 18,000 Israelis living in the Golan. Their new towns and villages are laid out with an eye on military defense needs as well as the necessity of controlling the 17,000 Druze Arabs still residing in the occupied territory. It deserves mentioning that most of the Druze have retained their Syrian citizenship even though the option of becoming Israeli citizens has been open to them for years.
Showing the skill, inventiveness, and dedication which brought the Negev to blossom, GOI and Israelis have developed the economic opportunities in the Golan. The once under-utilized hills and valleys are now home to a prosperous winemaking industry. (It isn't a half bad wine, certainly better than the local products of the Geek's home state.) Tourism, including Israel's one and only ski resort, has been developed to the point that the Golan is a favorite destination for Israelis on a budget.
Reportedly the previous Israeli administration, the Olmert ministry, sought a deal with Syria on the basis of land-for-peace. Specifically Syria would get the Golan back (or at least most of it) for a comprehensive peace agreement including articles dealing with water allocation (as in the treaty with Jordan) as well as the status of Israeli residents and appropriate security guarantees. Syria would also have to jettison its relations with Iran and Hezbollah.
It is questionable that this offer would have been accepted by Bashar al-Assad. It was rendered nugatory by the ascension of Benjamin Netenyahu and his hard right tilting ministry. It has been clear since last May that the current GOI would not give an inch of the Golan back to Syria no matter what Bashar might decide.
No reversion of the Golan Heights to Syria means no peace with Syria. This equation will prevail no matter how much President Obama may chum his Syrian counterpart. Absent Syrian participation, the notion of a comprehensive peace settlement will remain an ever-receding mirage fading further and further into the desert of Mideast politics.
This, in turn, implies that the Obama administration will have an ever more difficult time recruiting non-frontline Arab states to support any exchange of symbolic concessions between the Arab states and Israel. In the escalating Cold War between Sunni Arab states led by Saudi Arabia and Shia-Persian Iran, Syria is a critical swing player. The feudal autocrats of the oil kingdoms, emirates, and sheikdoms cannot afford to allow Syria to remain in the embrace of the Iranian enemy. None will cooperate with the US unless Damascus signals its full approval of the move.
In this particular game of nations, the Palestinian Authority and Hamas are major non-participants. Save in one way. The two pseudo-governments of the "Palestinian people," are free to be as uncooperative, as demanding, and as intransigent as they wish without an agreement between Syria and the Arab states generally. This implies that GOI will have justification to continue its pursuit of keeping the status quo in stasis.
Nor does the US have a number of options in the matter. The US needs the cooperation of Syria in stabilizing Iraq. At a minimum we need Damascus to block the flow of jihadists and other insurgents to and from Iraq.
It is also in the better interests of the US to see Syria decoupled from Iran. The reasons for this transcend the Iraqi requirement. Stability in Lebanon as well as the prevention of Iranian horizontal escalation of terror and other forms of asymmetrical conflict both demand full Syrian cooperation with the US and its Western allies.
To pretend that Bashar and his coterie are not aware of these requirements and constraints is an exercise in self-defeating futility. They well understand that the US, the West, and the Arab states need Syria a lot more than Syria needs them, at least right now and in the near-term.
Bashar and Syria want--and need--the Golan Heights. They want and need the Golan free and unencumbered even if they are willing to continue the UN presence. This means that GOI will have to retrim its sails. Further, it means that the critical place for American pressure is not the "settlements" on the West Bank.
The critical place for US pressure is the location of the other "settlements," the Golan Heights.
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