The Next Challenge: Delineating an American Strategy Toward the Palestinian Bid at the UNGA

Israel Policy Forum Working Paper

November 26th, 2012

The Next Challenge: Delineating an American Strategy toward the Palestinian Bid at the UNGA


By Steven L. Spiegel[1], Danielle Spiegel-Feld[2] and David Andrew Weinberg[3]

 Executive Summary:

 Just as the violence between Gaza and Israel seems to be subsiding, the United States must immediately confront another potentially game-changing development in the Israeli-Palestinian conflict — in the coming days and weeks Palestinian Authority (PA) President Mahmoud Abbas plans to ask the United Nations (UN) to upgrade Palestine’s status to that of a “non-member state permanent observer.” Among other consequences, by putting the word “state” behind Palestine’s title, the status upgrade could enable Palestine to significantly increase its pressure on Israel in international forums, including potentially allowing it to bring cases against Israel at the International Criminal Court (ICC).

 Crafting a response to the bid poses a number of thorny issues for the United States. On the one hand, the United States rests firm in its belief that the Israeli-Palestinian conflict must be resolved through negotiations, not imposed by international bodies, and President Obama has announced his opposition to the UN bid. At the same time, given the weakness of the PA right now and relative strength of its rival Hamas, the United States must tread very lightly in its reaction to the bid, lest any punitive retaliatory measures further weaken the PA, thereby inadvertently strengthening Hamas.

 In light of these considerations, we propose that the United States adopt the following approach to the UN bid: As a first step, the US should continue to attempt to dissuade Abbas from bringing the motion to a vote, promising a large economic incentive package as compensation if he desists at some future point or withdraws his motion. However, should these efforts fail, and President Abbas proceed as planned, instead of immediately retaliating by withdrawing funding from the PA, which risks toppling it, the United States should establish a series of firm conditions that must be fulfilled in order for aid to continue. Chief among these conditions would be that the PA continue its security cooperation with Israel, refrain from initiating actions against Israel at the ICC, and immediately return to the negotiating table. In short, in order to strengthen Abbas, and prevent him from involving the ICC, we should first engage in increased aid to Abbas to try to get him to reverse his submission, and then to coax him into responsible behavior at the UN should he persist.


I.                   Introduction

How should the United States approach the Palestinian bid to become a “non-member state permanent observer,” of the United Nations, a designation that is currently only assigned to the Holy See? Inserting the word “state” into the title sounds innocuous, but it would likely enable the Palestinians to challenge Israel in a variety of settings, including the International Criminal Court (ICC). As such, it might also encourage boycotts of Israel, decrease Palestinian incentives to negotiate, and facilitate other forms of Palestinian activity at the UN. How should the United States react? 

 Barely noticed in the press, this is an initiative with enormous implications.  It could lead to the collapse of the Palestinian Authority, to the victory or marginalization of Hamas, to the reopening of the two-state option or its closing.  Rarely in recent history has an initiative by one side or the other in the Arab-Israeli conflict been fraught with such peril and potential relative to the paltry amount of current media coverage.  Further, the Gaza War intensifies the complexities associated with the Palestinian bid, especially in the light of Abu Mazen’s insistence on continuing with the application despite these hostilities.

 There are five basic options before the United States:

 1) Actively endorse the bid

 2) Vote against the motion at the UN General Assembly but forego a full-fledged attempt to foil the bid

 3) Use some combination of incentives and disincentives to prevent the Palestinians from bringing the motion to a vote, thereby preventing crisis in the short term at least;

 4) Use some combination of punitive measures and rewards to encourage the Palestinians to bring a modified bid, whereby the Palestinians would join the UN as a non-member state observer but would be dissuaded against petitioning the ICC or taking other actions against Israel at the UN

 5) Oppose the bid entirely and punish the Palestinians after the fact

The merits of each of these options will be discussed in turn below, after a brief review of the likely consequences of the Palestinian Authority’s bid for upgraded UN status.

II.                Examining the Stakes

We take as a given that using the United Nations to pronounce upon the question of Palestinian statehood in the absence of direct negotiations between the parties would antagonize Israel, causing a further rupture in communication between the parties. We also assume that by opening the door for the Palestinians to bring Israel before the ICC, the move would embolden the Palestinians, making them even likely to agree to recommence negotiations or to make needed compromises if they do.   

 To be fair, Abu Mazen has now suggested he would agree to resume negotiations with Israel, which he has almost consistently refused to do in the Netanyahu era absent a settlement freeze.  He also has limited leverage with which to pressure Israel into engaging in serious talks about core issues and taking confidence building measures such as halting settlement construction.  As such, he is using his government’s UN bid as a means of boosting his domestic standing and also trying to entice Israeli concessions.

 However, Israel is not likely to look kindly on a Palestinian Authority that has taken action at the UN to circumvent negotiations, even if the Palestinians do not initially go to the ICC or take other potentially hostile actions toward Israel. This reaction will be exacerbated by the bitterness surrounding the Gaza War and complicated by the upcoming Israeli elections.  Israel is apt to react to a successful Palestinian bid at the UN by withholding tax revenue from the PA, which the PA sorely needs right now. Likewise, passage of the UN resolution during the heat of Israel’s election season would likely have reverberations within Israeli politics that could pose obstacles to productive peace talks later on.

 We also take as a given that the US Congress will respond to the Palestinian motion by withdrawing funding earmarked for development assistance and other PA functions, regardless of how the U.S. administration decides to react. Congress would thereby aggravate the West Bank’s already severe economic woes, possibly contributing to the collapse of the Abbas/Fayyad government.  As the economic riots in the West Bank this fall suggest, such political implosion is no longer an unrealistic scenario and if it were to come to pass it would spell the demise of America’s regional strategy and directly contribute to the rise of Hamas. 

In exchange for these considerable costs associated with the pursuit of “non-member state” observer status, the upgrade would secure a largely symbolic victory for the Palestinians at the UN and might possibly improve Palestinian morale. Obviously, Mahmoud Abbas is the best judge of the steps required for his own political survival, and he seems to think this campaign is worth his while.  However, the initial boost to Palestinian morale would also likely recede once it became clear that the gains of non-member state status had failed to provide the Palestinians with tangible benefits.

Moreover, given that President Obama has already set out his opposition to the upgrade of the PA’s status at the United Nations as an important part of his administration’s support for Israel, there might be added reputational costs to revoking that commitment now.  Even turning a blind eye to the PA motion – which, notably, is almost certain to be approved without an intensive American campaign to defeat it – might now be seen as weakness or an unjustified retreat from the earlier stance unless relevant stakeholders on all sides were onboard.

The new contextual backdrop of Hamas’s attack against Israel makes it even more difficult for the United States to support the bid or remain indifferent to it; Concession to Abbas’s at the UN now could be perceived as rewarding Palestinian terrorism while punishing Israel for responding in self-defense.

In short, the continued viability of the Ramallah-based PA, which is a bulwark against the Iranian allied-Hamas, is a key U.S. strategic interest.  However, it is not so great an interest as to justify permitting the Palestinian Authority’s bid to continue unopposed, especially so long as it may allow the PA access to the ICC at the expense of productive negotiations.

III.             Weighing the Options

The analysis above suggests that it is in American interests to try to stop the Palestinians from winning non-member state status, which would also make a negotiated solution more difficult and Palestinian economic state-building more likely to fail.  In this regard, Option 1, to endorse the Palestinian effort, and Option 2, simply to vote against the motion knowing full well that it will pass, are not viable for Washington. Moreover, if the administration were to pursue either of these paths its effort would likely be undermined by Congressional punishment of the PA and a tough Israeli response, leaving US policy in shambles. 

However, it is also true that Option 5, opposing the vote and wielding economic sanctions without offering the Palestinians an exit ramp, is not worthy of serious consideration.  The Palestinians are making a mistake, but if Washington simply tries to force them to drop the bid the United States will lose.  It will lose either by undermining our credibility as global leaders (if the Palestinians go ahead anyway) or by further weakening the PA (if they actually concede to Washington’s pressure and must face the Palestinian people having dropped the bid and received nothing to show for it). 

Indeed, given Hamas’ political gains from the Gaza War – both among West Bank Palestinians and in the Arab world – the pressures on Abu Mazen to go to the UN and seize the initiative are now intensified. Abbas is competing with what has become an “Islamist Spring.”  The Islamist governments in power, especially in Egypt and Tunisia, have proclaimed their commitment to non-violence, but Hamas has made its reputation on the use of violence, not only against Israel, their chief target, but also where they find it appropriate, against their own people. Abbas, a moderate opposed to violence, has fixated on a single gambit to try to regain the upper hand: the UN bid.  It will be difficult to dissuade him from proceeding as planned without a well-devised American strategy.

This brings us to Options 3 and 4, which envision either incentivizing Abbas to drop the application or, perhaps more realistically, to put forward a modified UN bid that could be tolerated by the United States.  It also raises the question of methods. Specifically, which punishments and rewards should the United States employ to try to convince President Abbas not to bring the motion to a vote?  And how might Option 4, bringing the Palestinians into the UN without mischief-making power, be made a viable alternative?

The biggest weapon in the United States’ arsenal is of course to withhold funds from the cash-strapped PA. The problem with this strategy is two-fold: First, as suggested above, Congress will interfere with the disbursement of funds to the PA regardless of the President’s intentions. Second, it is against American interests to further weaken the PA, especially in light of the Gaza War. A collapse or serious weakening of the PA could lead to a Hamas takeover, a third Intifada, or an Arab Spring-type revolt.  For these reasons, the threat of financial sanctions is wholly ineffective as a policy option.

Alternatively, the U.S. could inform the Palestinians that if they oppose our policy at the UN we will retaliate by taking diplomatic actions they will oppose such as assuming stands on key issues in dispute.  Examples include taking positions on territory, refugees, Jerusalem, and even settlements that are closer to Israel’s positions on the respective problems. However, is it not necessarily in our interests to be seen as prejudicing the terms of a final status agreement that only the parties themselves can resolve, so again, the strategy would be ineffective.

Thus, the United States is left with incentives as the primary avenue available. What should these inducements entail?  With one important caveat, we believe these incentives should primarily be economic in nature. 

That caveat is as follows: the recent violence in Gaza and the Palestinian bid at the UN both point to the pitfalls of leaving peace process issues forever on the backburner.  As such, we believe economic incentives should also be paired with a strong signal that America is reinvigorating the negotiating track.  As will be discussed below, the creation of a new American initiative between the parties or the empowerment of a presidential envoy could denote such an intent.

          1. The Israeli Contribution

While Abu Mazen is caught between his need to be the “good guy” with the Israelis and the more effective leader by contrast with Hamas in the Arab context, the only way to square the circle is to provide him with sufficient rewards to offset the withdrawal from the UN bid.  The State of Israel’s role is essential in this regard.

One possibility would be to permit more robust trade flows in and out of the West Bank - to Israel, and Jordan. Artificial economic barriers significantly stifle growth in the West Bank today. Notably, Israel has shown some independent inclination to liberalize its labor market, having recently increased the number of permits for Palestinians from the West Bank to work in Israel.

Taking further action to liberalize markets for trade in goods – particularly agricultural goods – could confer real economic benefits to the West Bank at a time when such benefits are greatly needed. The Agreement on Movement and Access between Israel and the Palestinian Authority of November 2005, which involved the West Bank-Gaza connection but preceded the Hamas electoral victory and subsequent takeover in Gaza, could conceivably prove useful in discussions. However, if history is any guide, free flow of Palestinian agricultural and other goods across borders requires sustained political buy-in from the U.S. to succeed. 

In complement to these measures, there is also a strong, recent groundswell of Palestinian voices calling for greater Palestinian independence from Israel in terms of internal economic management.  In light of September’s protests over price spikes and calls for revocation of the Paris economic protocol, Salam Fayyad’s government should be offered increased regulatory freedom in select arenas.  This would better enable the PA to shield the West Bank’s economy from arbitrary commercial penetration by Israeli firms and to allow space for more effective economic stewardship.

Could Israel be moved to undertake these actions? It is not beyond reason to think that it would. First, while the Gaza War makes this approach more problematic, it also creates a powerful argument that it is appropriate and worthwhile for Israel to reward the non-violent Palestinian leadership. Second, despite the election season pressures to talk tough, Israel has a strong national interest in having the Palestinians table their motion. Israel therefore has some incentive to help Washington devise effective inducements. Third, PM Netanyahu has previously laid down a rhetorical marker in support of Palestinian economic growth as a pathway to peace, and he would be in a difficult spot if he sought to disavow these comments entirely.  Fourth, Israel has an independent interest in helping the Abbas/Fayyad government to survive in a time when it is under assault from Hamas and has shown an awareness of this issue by recently advancing some tax revenues collected for the PA.

Still, Israel may not be prepared to provide all the entitlements required here – especially not in public – making it necessary for the United States to quietly barter an exchange with them. An Israeli-American package to aid Palestinian development in the economic sphere could be paired with an American commitment to help Israel rebuild and boost civilian readiness in the aftermath of the Gaza War. The strong American and European support for Israel during that war has already created a climate of confidence building that could be used on the Palestinian UN bid.

Should the US encounter reluctance from Israel against implementing the desired economic incentives, the US should also be prepared to barter an exchange that would touch on three critical areas of Israeli concern:  1) US reiteration and clarification of support for its 2004 agreement with Israel on settlement blocs and refugees; 2) new understandings vis-à-vis the confrontation with Iran that could bring the two sides closer to a common policy; and 3) enhancement of particular elements in the security apparatus that Israel may seek such as increased aid for anti-missile emplacements.

 Critically, the inducements proposed here provide the basis for a fundamental change in the economic relationship between Israel and the Palestinians, changes the Palestinian Authority has been seeking for some time.  However, we are not simply suggesting the Palestinians be “bought off.” That is why, in talks between Israel and the United States, the Israelis will also require incentives to make the deal go through, because these are positive steps that the Israeli government, any Israeli government, might have wanted to keep for tradeoffs in serious negotiations.   The Israeli government cannot be expected to simply make concessions any time the PA decides to go to the UN on its own, and that is why it is so necessary to take Abbas up on his offer to negotiate after this UN bid issue has been resolved, no matter what the outcome.

          2. The American Role

If talks with Israel concerning aid to the Palestinians fail, as is highly possible, or the concessions Israel is willing to make are not sufficient, the ball will be left in Washington’s court. One possibility the US could explore would be to provide loans or loan guarantees to the PA to help make up for rapidly spiraling budgetary deficits.  These deficits are due in part to the failure of certain donor states to follow through with their aid commitments, and the US could do much to help stop the bleeding. In principle it should be possible to produce a reasonable Palestinian-American package (perhaps with European cooperation) that would allow Abbas to go to his people with a justification for tabling the Palestinian application.

However, America’s greatest assets vis-à-vis the Palestinians are diplomatic rather than economic in nature.  As such, any economic package should be paired with highly visible signs of American recommitment to engage on the peace process.  One such gesture could be the announcement of a more empowered envoy who reports directly to the president to jump-start the negotiations process. 

By all accounts current U.S. envoy David Hale is doing an outstanding job given the constraints of his portfolio. One option for signaling stronger American intent and reinvigorating the peace process would be to elevate his position to that of a presidential envoy with greater political clout and increased authority to craft the agenda. 

Alternatively, Senator John McCain’s recent suggestion that Bill Clinton be appointed to negotiate among the parties is another intriguing idea that deserves serious consideration and could be a game-changer on the peace process.  Either measure would have the added benefit of signaling to the Israeli public and political elites that America is planning to reengage on full-spectrum diplomatic issues after their election is complete.

Part of a Palestinian-American deal could even include an understanding on resumption of Palestinian efforts to pursue non-member state status at the UNGA, perhaps after the Israeli election.  However, this would have to be on a basis of a firm, prior commitment that Palestinian membership would not be leveraged to bring cases at the ICC or cause similar problems in other bodies. 

Finally, any American deal with Abbas really must resolve this crisis over Palestinian status at the UN once and for all.  Any concessions to the PA must be paired with an enforceable commitment from the Palestinians to keep this commotion from becoming an annual debacle and to reengage in good-faith peace talks without preconditions. 

If it is legally possible to build such commitments (especially not to go to the ICC and not to raise such claims again absent a two-state solution) into the actual resolution language upgrading the Palestinians’ status at the UN, that would be ideal.  However, the American administration also has domestic tools that could help ensure this objective.

The Obama administration could build the terms of such an agreement into Congressional statute in order to address concerns from the legislative branch while signaling to the Palestinians that any violation of these terms would lead to automatic and clearly spelled out consequences for their relationship with the U.S.  By visibly tying his own hands, the president could credibly dissuade any future Palestinian leadership from reneging on such current comments.

To summarize, Abu Mazen clearly needs something to step down from the precipice and resurrect his leadership, especially in light of Hamas gains in the Gaza War. Though the current Israeli government might not take the needed actions to make Abu Mazen change his course, the possibility that they would take such actions still exists and should immediately be explored through quiet talks before exploring separate American understandings with the Palestinians. 

Further, Abu Mazen may bite at the chance of obtaining visible benefits as a sign that the path of non-violence works for achieving Palestinian national aspirations. He would be able to claim, justifiably, that Hamas has missiles and brings death to its people while the PA is making economic and diplomatic gains as well.

IV.           Conclusion

 The Gaza War has brought our options into harsh focus.  We must do more than ever to build up the Palestinian Authority, lest it be engulfed by the Hamas onslaught. Attempting to shoot down Abu Mazen’s UN bid without giving his government both a way out and a future direction runs a risk of rewarding Hamas’s attacks on Israeli civilians at the expense of Mideast moderates.

To avoid this result, the Obama Administration should endeavor to convince Abbas to drop the bid by strongly opposing it while simultaneously providing Abbas with an exit ramp on a variety of fronts to bolster the economy of the West Bank and to renew negotiations. Should these efforts fail, the Administration should then consider permitting a modified Palestinian bid with an eye towards minimizing the damage that the upgrade to “non-member state observer” status will cause.  The Gaza War has seriously complicated this path, because it could be interpreted as having been taken because of the Hamas missiles, but it still appears the most viable option.

The bottom line is to activate a tradeoff: the Palestinians should receive generous compensation in order to either drop the bid for good or bring it a less menacing form, and to engage in good-faith talks with the Israeli government.  There is a diverse menu of incentives the United States and Israel could offer the Palestinians to encourage them in this respect. Through behind the scenes discussions, a formula should become possible that could advance everyone’s interests. 

If none of the above options turns out to be feasible, then President Obama should invite Abbas and Netanyahu to Camp David or Wye or Annapolis or wherever to address the UN bid, the aftermath of the Gaza War, and the development of a new framework for negotiations. The objective of such a meeting should be to signal continued American backing for Palestinian moderates while producing a solution that pulls the PA back from the brink of a major crisis with dire consequences for American interests.

Whatever our tactics, we must figure out a way to enhance the Palestinian Authority, avoid a Hamas diplomatic victory, and protect Israel’s interests as well as our own, while simultaneously preventing the Palestinian UN bid from becoming an American fiasco.  We recommend a major rejuvenation of economic assistance to the Palestinians and a rearrangement of their economic relations with their neighbors, plus a new diplomatic campaign for progress in the peace process.  To us, that is the only way to square the many circles this challenge represents.


[1] Professor of Political Science, UCLA; Israel Policy Forum National Scholar

[2] Senior Associate, Israel Policy Forum

[3] Non-Resident Fellow, UCLA Center for Middle East Development