CHAPTER TWO
The Oslo Roller Coaster:
A Mixed Model

STARTING IN 1991, CONDITIONS BECAME RIPE FOR PEACE between Israelis and Palestinians. The violent Palestinian uprising known as the First Intifada did not lead to political results for Palestinians and, with the election of an Israeli peace government under Prime Minister Rabin and the first Bush administration’s desire to turn the antiwar coalition against Iraq into a pro-peace coalition in the Middle East, the time seemed right to explore options for peace. Negotiations began in Madrid between an Israeli delegation and a Jordanian-Palestinian delegation that included Palestinian representatives of the occupied territories but not representatives of the Palestine Liberation Organization (PLO). The talks were later extended to Washington, DC.

But by the end of 1992 those negotiations had stalled. A Norwegian couple, Terje Rod-Larsen (head of a Norwegian NGO dealing with humanitarian conditions in the West Bank and Gaza) and Mona Juul (assistant to Norwegian Foreign Minister Johan Holst), decided to take a different approach. They worked with Israeli Deputy Foreign Minister Yossi Beilin, a staunch peace pioneer, to initiate contact with an official PLO delegation, headed by one of the PLO’s senior leaders, Abu Ala. At the beginning of 1993 these talks quickly turned into a secret back-channel negotiation. Whereas the Palestinian representatives took very uncompromising positions during the formal Washington talks, the PLO delegation in Oslo, Norway, was pragmatic and realistic. Yasser Arafat, Yitzhak Rabin, and Shimon Peres were fully in the picture but, although the US administration knew about the back channels, it expressed little hope or interest in them.28

By May 1993 the secret channel produced an informal document of principles for an Israeli-Palestinian peace process. It was at this point that the Israeli leadership decided to send an Israeli government official to meet for the first time with the PLO. I was that official.

The first secret PLO-Israeli meeting, between Abu Ala and me, took place on May 21, 1993, in Oslo. Precisely three months later we reached an agreement in principle on a gradual solution to the Palestinian-Israeli conflict—the Declaration of Principles on Interim Self-Government Arrangements (1993). This agreement, also called the Oslo Accord, was recognized by the US administration and was signed in Washington, DC, on September 13, 1993.¹

The first stage called for an Israeli withdrawal from Gaza and the city of Jericho. The second step called for a gradual Israeli withdrawal from the West Bank cities, coinciding with the first Palestinian presidential and parliamentary elections. These provisions were formalized in the Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip, or the Oslo II agreements, signed on September 28, 1995, in Washington.² The final stage was to be a three-year negotiation for permanent status and peace between the two sides, resolving all outstanding issues such as borders, refugees, the status of Jerusalem, settlements, and security arrangements. The agreement was coupled with a historic mutual recognition agreement between Israel and the PLO.

The implementation of the agreement proved to be a challenge—much progress on one hand, and setbacks, often turning to violence and terror, on the other. Negotiations between Israel and the PLO continued in the following years, during which our hopes for peace and economic development were juxtaposed with the rapid globalization of the world around us. The process became a roller coaster, and we rode the extremes between euphoria and great disappointment. 29

February 1994: Davos, Switzerland

In the midst of the Swiss Alps, a tiny, picturesque village became the scene of a most incredible congregation. Inventors, entrepreneurs, heads of multinational institutions, and political leaders came together to design the future at the World Economic Forum. As the heroes and prophets of globalization, these individuals were filled with high hopes for technological revolution, democratization, dissolution of national boundaries, creation of free markets, and free movement of people and goods. Daytime discussions centered on fantastic technological breakthroughs that would translate into social and economic capital, that would establish new dimensions in space and time and would penetrate all physical barriers—achievements to be listed in the scriptures of the world’s stock markets.

Such leaps and bounds were reflected in the press, which characterized the “Davos Man” as the new Adam. Indeed, it seemed that participants in the World Economic Forum were creating a new, improved, and sustainable Garden of Eden. The genesis of this era of globalization represented an unwavering faith in the miraculous capacity of the human brain. Humanity’s euphoria generated an intense agenda for textbook globalization—industry, competition, information technology, global corporations, biotechnology, high-tech economics, and scientific and economic development—and aimed to bring together the great minds of the new world.

Down the road, another drama was simultaneously unfolding. Deeply covered by a blanket of snow, the Palatin Hotel also was a meeting point of sorts: Israeli Foreign Minister Peres and Palestinian Chairman Arafat had brought their respective negotiating teams to Davos to create the political miracle that ultimately became a mirage. A convergence of historical conflict and dramatic progress, from a tiny land to a new globe, filled us with mesmerizing hope. I took part as Israel’s chief negotiator and was firmly dedicated to our strategic goal of removing the bloodstains tainting the relationship between Israelis and Palestinians. We were 30 driven by the desire to join the bullet train of globalization and to work with our former enemies to overcome past conflict.

As the night progressed, the air in the hotel became opaque from anxious cigarette smoking. The World Economic Forum and its globalized ideals became an ironic backdrop; while business and political leaders down the street discussed worldwide open borders, we bickered over the closure of access roads near the Jordan River, which would affect future borders between Israel, Jordan, and the Palestinian Authority. Every meter of land was analyzed in terms of security; the perpetual use of traditional peacemaking methods created the mirage in which we were immersed.

Yet, from the perspective of world leaders, we were inspirational. When Arafat and Peres entered the plenary side by side—two peacemakers, so obviously different in demeanor, apparently ready to contribute positively to their common destiny—three thousand participants burst into a tumultuous standing ovation. At that moment, participants and observers were overwhelmed with the feeling that Israelis and Palestinians could work together to make peace and join the new world order, with globalization as the ultimate prize.

Our euphoria was exploited by the champions of globalization to further strengthen their sense of omnipotence. Davos became synonymous with globalization—but in fact it was homogeneous, ignoring the challenges of a world fractured by old plagues. Not only did the representatives of Africa and other developing regions hardly feature in Davos, but also issues such as hunger, war, disease, and cultural and religious clashes were rarely seriously addressed. Globalization belonged to the profit makers; the rest of the world could take part if and when it reached maturity. Unfortunately, we peacemakers were not yet ripe.

As we met colleagues from other regions, mainly Africa and Europe, who were similarly struggling to bring their nations out of conflict, the Davos event took on new symbolism as an assembly of frustrated peacemakers from around the globe, caught between 31 promise and impotence, attempting to join the new world but unable to make that leap.

October 1994: Casablanca, Morocco

The frustrations and uncertainties of Davos were transformed into hope for the Middle East that October. Under the auspices of King Hassan II of Morocco, hundreds of Israeli businesspeople met in Casablanca with business leaders from Algeria, Egypt, Jordan, Oman, Qatar, Saudi Arabia, Tunisia, and the newly formed Palestinian Authority. Prearranged in late 1993 during a secret meeting between Peres and King Hussein of Jordan,³ the Casablanca forum aimed to spark economic development and cooperation in the Middle East. It involved Davos Executive Chairman Klaus Schwab; Leslie Gelb, president of the American Council on Foreign Relations; and André Azoulay, the Moroccan peace pioneer and a close advisor to King Hassan II. With the partnership of these individuals and the relentless American peace process coordinator Dennis Ross, I chaired the preparations.

For those short moments in history, the Arab boycott was considered dead. The Promised Land became a land of promise. When the forum met, not a single American, European, or Asian business leader refused an encounter. With our American friends, we planned a regional Middle East bank; other talks centered on innovative programs for public-private partnership. As I looked around the assembly of businesspeople and leaders, I recalled the Davos discussions and allowed myself to hope that a bridge to the new world was within reach.

At the event center, the scorching sun beamed down on us and the sand sprayed in the wind. Entering the royal tent alongside Peres, the heads of state and foreign ministers from at least twelve Arab countries—most wearing traditional jalabyas and kaffiyehs—hovered around our Moroccan host. While we mingled hesitantly, we sensed the genesis of a new era. We discussed the 32 implementation of creative and high-tech projects in an open-border, post-conflict Middle East. One potential project entailed a major tri-national park in the Dead Sea region—an attraction for worldwide tourism. Israelis, Jordanians, and Palestinians had all inherited this historical sea—the lowest point on earth—which, given its environmental uniqueness, could be turned into a major resort area for medical tourism and could become a platform for regional economic development. We believed that our transition from conflict to peace could arouse the interest and energy of the international private sector, could bring life to the Dead Sea. Other proposals included a canal from the Red Sea to the Dead Sea to make our deserts flourish, and industrial parks shared by Israeli and Palestinian entrepreneurs.

Casablanca ended with powerful statements about the future of a new Middle East—but those hopes were short-lived. Ultimately, the Casablanca forum failed to produce even a single project. The necessary bridge between the new world and the old was proving impossible to build. Entrenched in suspicion and animosity, even those mesmerized by the vision of peace had little patience to integrate the interests of nations that, unlike Israel, were not on the high-tech highway. The Middle East, like other transitional regions, remained underdeveloped. The mirage was disappearing.

The private sector decided that regions in transition, such as the Middle East, were a gamble; they did not offer the necessary conditions and incentives for investment. The great promise of public-private partnership was not realized; aid money was earmarked for institution building, security, infrastructure, and, not least, the respective bureaucracies of donors and recipients. Governments were neither psychologically nor practically prepared to provide the foundations necessary to attract investment.

The hopes that germinated in Davos and Casablanca proved transitory. Peace dividends were distributed to an elite minority and not to the wider constituency critical to the success of the process. 33 Peace became the prize of the wealthy class that was able to jump on the bandwagon of globalization. In response, the majority rebelled against the peace process—at times politically and at times violently. If blame is to be apportioned, much of it belongs to those Israelis and Palestinians who slowed down the process, to the Arab regimes that were not open to economic or political reform, and to the leaders of the international community and globalization, who failed to comprehend that by neglecting the economic challenges of conflict resolution and peacebuilding, they strengthened the forces that would later work to their own detriment.

In contrast to those who promised peace and prosperity, a new coalition began to emerge from the frustration of poverty, the extremism of fundamentalist religious ideologies, and the devastating power of terrorism and weapons of mass destruction. We in the Middle East suspected that, had the Casablanca process been successful, it could have undermined the danger and scope of a potent anti-Western force. But the Davos Men, those champions of New York and Silicon Valley, believed that the path upon which they had embarked should proceed at full pace; patience for their own governments—let alone for latecomers from conflict and post-conflict areas—was limited. Our failure, as members of both the old and new worlds, arose from our lack of progress and our delayed reaction to the imminent and tragic chaos that was approaching.

An Imperfect Peacemaking Parable

Despite the fact that the Oslo process—including the negotiations at Davos and the economic summit at Casablanca—should be viewed retrospectively as a significant and dramatic historical breakthrough toward Middle Eastern peace, the concepts that prodded both sides to their achievements were often outdated. Plenty can be learned from the deficiencies of the Middle East peace. The structural flaws of the Oslo Accords reflect the eight core failures of traditional peace treaties, analyzed in chapter 1.

1. Oslo furthered traditional aims and dwelled on the past, 34 rather than paving a cooperative road for the future and engaging in a necessary historical reconciliation.

   Israelis and Palestinians saw the peace process as a means to advance political and traditional goals and not as a goal in itself. Israel aimed to enhance its security and the Palestinians endeavored to realize their national aspirations. It became evident throughout the process that when reconciliation is not a target in itself even traditional goals will not be achieved.

   Peaceful coexistence and cooperative goals can be achieved in a compatible way; this is the true premise of peace. But in the Oslo process the aim of reconciliation and peaceful coexistence was often drowned out by harsh negotiating tactics. Filled with suspicion and constantly competing for the upper hand, the two sides seldom joined hands. Moreover, the rhetoric of our late leaders reflected this antagonism. In May 1994, during a visit to South Africa, Chairman Arafat spoke about the continuation of a holy war—jihad. Prime Minister Rabin responded, “With regard to Arafat’s reference to jihad, if in fact he called for jihad … it will place the continuation of the [peace] process between us and the Palestinians in question.”⁴ Such exchanges were typical of the public rhetoric of these leaders.

   The issues negotiated at Oslo included notions of territory, security, the civilian authority of the Palestinian Authority, and mutual recognition between Israel and the PLO. No topic had minor significance; even negotiating the entry point across the Jordan River to the West Bank required three months and two hundred pages of minute agreements. Common interests often became a secondary concern. This myopic attitude undermined the most important strategic issue to be orchestrated—the future relations between Israel and Palestine in the political, economic, and cultural arenas. Such relationships not only would influence the realization of our goals but also would lead to greater regional participation in the process. Sadly, neither side—except perhaps the negotiators themselves—really understood that solutions do not create partnership; rather, partnership creates solutions. 35

   Unfortunately, too, positive intentions between the parties were often overshadowed by larger issues. I recall the initial stages of the permanent-status negotiations that began in May 1996 and took place in Taba, Egypt. During a tête-à-tête after the opening ceremony, Abu Mazen and I concluded that in the first year of negotiations we would focus only on Israeli-Palestinian relations in the year 2000; we would define our strategic aims and tackle only topics relating to our common future. Only then could the strategic goals for 2000 be constructively explored for the permanent-status issues.

   But no such negotiations took place. Three weeks after our conversation the Likud came to power in Israel, forming a right-wing coalition. Consequently, sustainable peaceful relations with a Palestinian state were erased as an Israeli aim. At best, the parties were able to micromanage the process until its near-death.

2. Oslo reflected a narrow security doctrine based on deterrence and an irrelevant balance of power, rather than creating the motivation to sustain peace.

   In line with the centuries-old security doctrine, the primary consideration during negotiations at Oslo was to deter the enemy from developing military capacity and thereby threatening the peace. The Israeli team made it clear from the outset of the Oslo process that Israel would maintain overall responsibility for security. Despite any civilian or military authority transferred to the Palestinian Authority, Israel would retain the right to physically intervene if a security threat developed.

   In May 1994 apprehension stirred regarding the potential contradiction between a security-based agreement and an economically based agreement. Israel and the PLO had concluded an agreement in Cairo, Egypt, that outlined Israel’s military withdrawal from most of Gaza and Jericho. The Cairo Agreement implied very stringent security arrangements to prevent terror.⁵ At the same time, they had also signed the Paris Economic Agreement, which would facilitate the development of the Palestinian economy and the freedom of movement of goods and people.⁶ But such freedom 36 of movement presented a potential security concern, provoking Israel to insist that in the case of a contradiction between the two accords, the Cairo Agreement would take precedence—another victory for the dominance of security.

   The security doctrine derives from an era when employing military tactics was assumed to achieve deterrence. Today, with the accelerated development of ballistic weapons and the proliferation of terrorism fueled by deprivation and poverty, such a doctrine is no longer appropriate. In simple terms, economy not only outweighs security, it actually provides security. The growth of the Palestinian economy should have been a clear Israeli security interest, but it was not treated as such.

3. Oslo failed to promote a culture of peace by introducing the necessary values and beliefs.

   War creates a culture of hostility, victimization, and suspicion. Only this kind of culture can provide the impetus for people to sacrifice their lives and the lives of their children. Changing this culture of war to a culture of peace must be the desire of those involved in the peace process. And although such hopes are often expressed in songs and poetry, the transformation is difficult to achieve.

   During the Oslo period, there were days permeated by a sense of cultural transformation; dramatic media events often sparked feelings of euphoria. But reality fell short of expectations. The provocative rhetoric of leaders perpetuated stereotypes of the “other side” and sustained the culture of hostility. Israelis and Palestinians remained foreign to one another (except on the battleground), and person-to-person encounters of any significance were almost nonexistent.

   The mass media, too, avoided creating a culture of peace. In times of conflict, the media were virtually recruited to the struggle; during the peace process, the mutual demonization in the media continued, even during days of relative quiet, catering to existing preconceptions in public opinion, which had been molded during the days of terror and military activity. 37

4. Oslo failed to establish a mechanism against increased socioeconomic gaps, which turned the peace process into a revolution of the wealthy rather than a means of dispensing peace dividends more equally.

   One measure of peace is wealth. When conflict decreases, so does the risk of doing business, and new investment opportunities arise. However, in the case of Israel and the Palestinian Authority, only a small elite on both sides of the Green Line (the 1949 ceasefire line) reaped any peace dividends. In Israel, the champions of the high-tech industry acquired the capital, while in the Palestinian Authority, the higher echelons of the PLO leadership, which had arrived in the West Bank and Gaza from Tunis, enjoyed increased influence. At best, the middle and lower classes in both societies maintained their standards of living.

   As a result of peace, the socioeconomic gap in each society grew. Palestinians in refugee camps saw their brethren make homes for themselves in Gaza-style skyscrapers. Israelis struggling to feed their children in south Tel Aviv watched their fellow citizens in the north of the city board private jets. The poorer echelons in both societies generally saw peace as a betrayal, and they rebelled—some politically, others violently. It is exactly this economic gap that endangers political stability.

5. Oslo failed to emphasize economic cooperation, to create common interests and greater interdependence.

   Despite the agreements and their partial implementation, the economic reality on the ground remained essentially unchanged from the days of full occupation: two islands standing side by side—a strong Israel and a weak, dependent Palestinian Authority. Few people paid attention to the two economic annexes of the 1993 Oslo Declaration of Principles, which addressed the concept and benefits of economic integration. One annex discussed the Palestinian economy and Israeli-Palestinian economic cooperation; the other emphasized a regional economic plan for the Middle East.

   Unfortunately, the implementation process did not furnish the economic cooperation that would have narrowed the enormous 38 gap between the Israeli and Palestinian economies. Israel contributed the minimum allocation in customs and taxes that was due to the Palestinian Authority for Palestinian goods, and the Palestinians were more committed to the flag and to independence than to taking advantage of financial mechanisms on offer for their development and prosperity.

   Moreover, the idea of enhancing the Palestinian economy as part of peacebuilding projects was almost totally overlooked. There were some modest exceptions—the creation of one or two industrial parks, limited cooperation in the field of information technology, and a joint technology fund—but these advancements melted away in the wake of violence and terror. There also was little cooperation in construction; not even one project involved professionals from both sides. Ultimately, the export of goods and services within Palestinian areas declined by 5.4 percent between 1993 and 2003.⁷

6. Oslo lacked planning for regional development and international assistance; international aid was geared toward traditional bilateral programs and bureaucracies rather than toward supporting a cooperative economic peace.

   Although much of the negotiation that took place in the Oslo process was bilateral, the international community played an important role in encouraging the process and created massive aid packages for the benefit of the regimes. However, traditional peace aid policies had little effect on peace itself because the international community, led by the United States and the European Union, differentiated between aid for development and aid for peacebuilding.

   This separation of aid funding proved detrimental. Israel and the Palestinian Authority, combined, received about $10 billion of special aid throughout the Oslo process. Israel received from the United States aid for security measures, and the Palestinians received civilian aid, among the highest per capita in the world. Bilateral aid mechanisms were searching for local flagship projects that had high aid-bureaucracy overhead. The multilateral mechanisms of 39 the World Bank and the United Nations viewed aid linked to peace projects as almost taboo. Instead, the aid would go to Palestine as a developing country, as if peace was not the issue. Funds actually earmarked for Palestinian-Israeli cooperation did not target the sort of public diplomacy and peacebuilding that would have affected public opinion.

   I was present during the US Agency for International Development’s talks regarding agricultural projects in the Palestinian Authority. We suggested an initiative that would allow Israeli farmers to work with Palestinian farmers rather than with agrarian experts from Arizona who knew very little about the region’s soil. Israeli and Palestinian experts working together on similar land, with similar interests, could have inspired a peacebuilding trend and a sustainable project between neighbors. But our suggestion was in vain. Because the international community insisted upon separating development and peace, the lack of funding was harmful on both ends.

7. Oslo failed to promote peace socially and politically and lacked implied sanctions against domestic opposition.

   An important element of peacemaking is the shaping of a national identity. There was violent opposition to the Oslo process from both camps, with each side espousing messianic views of saving their respective countries from evil by projecting patriotism and nationalism. These detractors warned against open society, westernization, and liberalism. Peace can never be achieved without the defeat of such opposition or by the politics of consensus. But the choir of religious nationalism became the backdrop to the assassination of Prime Minister Rabin, and the Palestinian chairman’s power weakened in proportion to his inability and unwillingness to challenge his violent opposition. That decisive internal battle never took place, as both sides essentially tried to appease the enemy from within.

   A unique challenge for Israel surfaced in February 1994 when Jewish fanatic Baruch Goldstein murdered twenty-nine Palestinian 40 worshippers in Hebron.⁸ The Palestinian demand to evacuate four hundred Jewish settlers from the old city of Hebron was understandable; the city’s 150,000 Palestinians were living in a state of perpetual violence, which curtailed the settlers’ freedom of movement.⁹ It seemed that at that moment of shock, most Israelis would have condoned such a move.

   Along with several colleagues from the Israel Defense Forces, I boarded a plane to Tunis to meet Arafat, who persisted with the question of the Hebron settlers. We knew from Rabin and Peres that about half the settlers would be evacuated. Yet, after the plane landed in Tunis, we were informed that the settler evacuation plan had been canceled due to the potential for violence on the part of other settlers, following the evacuation. Apparently, Chief of Staff Ehud Barak had convinced Rabin to postpone the necessary confrontation indefinitely.

   Similar trepidation existed on the Palestinian side. Prior to the Israeli elections of the fourteenth Knesset in February 1996, I met Arafat in Gaza to request that he take all necessary measures to prevent terrorism during the Israeli election campaign, as we had credible intelligence that Iranian elements were masterminding terror attacks to advance a right-wing election victory that would sabotage the peace process. An empty promise on Arafat’s part resulted in four suicide bombs exploding in Jerusalem and Tel Aviv during February and March. Exactly as we had warned, these bombings had the calculated devastating impact on the Israeli psyche and brought about a right-wing election victory.

   To move toward peace and quash archaic antipeace forces, an element of civil war and cultural confrontation is necessary, to bolster the very nature and identity of the peacemaking society. Tragically, the domestic policy of the two governments during the Oslo process simply safeguarded the politics of seeking the broadest consensus possible.

8. Oslo involved warmakers acting as peacemakers, and too many of these former warriors believed that certain situations could only be resolved by force. 41

The pioneers of the peace process were peace-obsessed, and the decision makers, including Rabin, Peres, and—at least initially —Arafat, were extremely courageous to take the unpopular route of compromise. Nonetheless, the bulk of the peacemakers at Oslo were former warmakers. The Israeli side comprised army generals and heads of the secret service, while the Palestinian side was made up of leaders of the First Intifada and terror activists. The argument that army personnel make good peacemakers because they have seen the price of war couldn’t be further from the truth. Although there are some exceptional cases (for example, Lieutenant General Lipkin-Shahak, a former Israel Defense Forces chief of staff), most people who have seen the use of power as a solution continue to do so and, worse, continue to use it. Professional warmakers will almost always maintain a safety net to be employed in a worst-case scenario; deterrence will always be preferred over building trust. During the Oslo process, this mind-set became selffulfilling. Those of us with a civilian mind-set of peaceful coexistence as the only option were in the minority.

The Oslo process was undoubtedly a historic breakthrough; without these peace accords, the West Bank and Gaza might have been annexed to Israel, resulting in total turmoil, anarchy, and a binational state. Oslo took courage and ingenuity, but the process—not unlike other global peace processes—had structural flaws, mostly related to the fact that both parties consistently exploited the past while supposedly working for the future. Being from the Middle East, we would always be confused by our dichotomized identity, which is based in both modernity and antiquity. Although the process was politically and morally legitimate and pointed in the right direction, the implementation of the Oslo process was overburdened by the inertia of the past.

In February 1997 a group of frustrated peace professionals congregated at the sidelines of another globalization conference in Davos. Representatives from the Middle East, former Yugoslavia, 42 Ireland, and South Africa gathered for another four days of meetings. The Davos crowd hailed our appearance but did not absorb us into their world. We were encouraged to abandon our conflicts, but in one way or another all of us repeated, at least partially, old-fashioned slogans that focused on resolving past issues rather than future ones and on supporting outdated security doctrines. We were overwhelmed by a culture of confrontation, unable to embrace the new economy of integration. Every issue—economy, education, conviction, health, and nutrition—was being “modernized” with a view to the future. Every issue except the one that ruled them all: peace.