Build a Palestinian State
In recent months, the U.S.-Israeli relationship has been subjected to unprecedented scrutiny from all sides. Forty Democratic senators voted to block an arms sale to Israel in April because of the Israeli government’s actions in Gaza, Iran, and Lebanon, a vote that would have been unimaginable only a year earlier. In these pages, Andrew Miller made the case for a “normal” relationship between the two countries that ends the blank-check support the United States has provided to Israel over the years. In the wake of the Iran war, the chorus of critics has come to include members of U.S. President Donald’s Trump’s coalition, many of whom see Israel as responsible for dragging the country into an unnecessary and costly conflict.
Recalibrating the relationship between the United States and Israel is a necessary shift in American policy as Washington seeks to turn its focus away from the Middle East and toward other priorities. But recalibration alone is insufficient. If the United States hopes to avoid being drawn back into conflicts in the region, it must first pursue a more stable regional order. And as Hamas’s October 7, 2023, attack on Israel and its aftermath have made painfully clear, any strategy that ignores the Palestinian issue is doomed to fail. Not every problem in the Middle East stems from the Israeli-Palestinian conflict, but the region will never be truly stable until it is resolved. That will only happen if Palestinians are given the opportunity to govern themselves.
For the past 15 years, Washington has done little to advance that outcome. It has instead treated the Palestinian file as an adjunct to the U.S.-Israeli relationship—an issue revisited only during intermittent peace processes and one in which nearly every decision is subordinated to Israeli preferences. That must change. The Trump administration may seem an unlikely agent for this change. But President Donald Trump is nothing if not unpredictable, and with his administration’s relationship to Israel in flux, there may be room for maneuver. And even if such a change does not happen under Trump, his successors in the White House will need a plan to treat ending the conflict as a geopolitical imperative. If the United States wants a more peaceful and stable Middle East, it must prioritize its bilateral relationship with the Palestinians. Put simply, it must help Palestinians build a state of their own.
The United States has pursued a nation-building strategy for the Palestinians in the recent past. The Palestinian Authority, the governing body established in the 1990s as part of the Oslo Accords, made great strides from 2007 to 2011 under Prime Minister Salam Fayyad toward building institutions that could eventually support statehood. Fayyad improved the PA’s financial management and transparency, and with the help of a U.S.-led training program, professionalized its security forces. Combined with billions of dollars of aid from Washington and other international donors, these reforms delivered rapid economic growth, increasing GDP in the West Bank by an average of ten percent every year for the first four years of Fayyad’s tenure. In 2011, the World Bank concluded that Palestinian institutions were “well-positioned to establish a state at any point in the near future.” Public support followed performance: A majority of Palestinians approved of PA President Mahmoud Abbas and indicated they would vote for him; 58 percent supported the two-state framework; and over 60 percent backed diplomacy and nonviolence.
Analysts often attribute the PA’s successes during this time to Fayyad’s technocratic leadership. But Fayyad could not have succeeded if not for the favorable conditions that made his governing agenda possible. Chief among them was preexisting political legitimacy. Two years before he appointed Fayyad as prime minister, Abbas secured a broad mandate by winning 62 percent of the vote in the Palestinian presidential election. Abbas’s electoral mandate and the relative popularity of his Fatah party provided Fayyad with the political cover he needed to pursue ambitious fiscal transparency reforms and consolidate the PA’s security control across major cities in the West Bank. These reforms gave Palestinians reason to believe that their institutions could deliver meaningful gains toward statehood.
Fayyad’s PA also operated alongside an Israeli government that viewed strengthening Palestinian moderates as a strategic priority. Israeli Prime Minister Ehud Olmert engaged regularly with Abbas, facilitated the transfer of Palestinian tax revenues collected by Israel on the PA’s behalf, and eased restrictions on movement by Palestinians in the West Bank. This cooperation did not resolve core political disputes—Olmert and Abbas ultimately failed to reach a final-status agreement—but it enabled Palestinian institutions to function effectively and deliver for their constituents.
The promise of Palestinian domestic legitimacy, backed by supportive Israeli leadership, opened the door to international investment. In addition to the United States, the European Union and other donors committed billions of dollars to support Palestinian governance and economic development. Foreign assistance, combined with improved security conditions and rising private-sector confidence, fueled rapid growth. By 2010, the West Bank’s GDP had risen by 50 percent from 2000 levels. The result was a virtuous cycle: better governance generated public support, increasing the stability of Palestinian society and attracting foreign assistance, which in turn improved the PA’s ability to make good on its agenda.
The United States has pursued........
