Economy May Force a Mideast Rethink

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An injured woman is helped from the scene of the bombing at Hebrew University

Compounding the horror of Wednesday's terror attack at the Hebrew University of Jerusalem was the fact that it was not unexpected. Israel has been bracing for new terror strikes ever since its air force last week assassinated the military commander of Hamas in a Gaza air raid that also killed 14 Palestinian civilians. On Tuesday, Israeli security forces had foiled two planned attacks, but a third bomber managed to injure a handful of civilians at a Jerusalem falafel stand. And those forces had been on maximum alert in Jerusalem at the very moment when a bomb planted in a campus cafeteria and detonated by cellular phone killed seven people and wounded 86. And even before the blood had been cleaned away, Hamas warned that Wednesday's carnage was but the first of a salvo of attacks planned to avenge the Gaza strike. Israel isn't sitting back and waiting for the sequel — Defense Minister Benjamin Ben Eliezer immediately authorized retaliatory strikes by the Israeli military, which are expected in the hours ahead. And those, no doubt, will leave Palestinian radicals with more "martyrs" of their own to avenge.

The Hebrew University bombing served as a grisly reminder that Israelis remain vulnerable to terror attacks despite their army's 40-day stranglehold on most of the cities in the West Bank. The interludes of calm achieved by the reoccupation of the West Bank have proved short-lived, and the past two weeks have seen the tide of violence rising rapidly. Almost daily shootings in the West Bank and Gaza have been accompanied by at least a dozen bombing attempts over the past week, and Israeli security services say they've counted at least 60 attacks currently in the making.

The uptick in violence poses a crisis not only for the Israeli government, but also for the Palestinian Authority — and for the Bush administration. It leaves Prime Minister Ariel Sharon leading an Israeli public increasingly aware of the inability of his government's tough tactics to end Palestinian terror attacks. Sharon's hands are increasingly tied by the costs of occupation. This week's austerity budget, which slashed almost $2 billion in the largest public spending cut in Israel's history, has been greeted by Israelis as the tearing up of the basic social-welfare compact that has anchored their society since its inception — and as the most dramatic indicator of the depth of the economic crisis that has accompanied the Palestinian uprising. Sharp differences over the economy and relations with the Palestinians is raising pressure on Sharon's Labor Party coalition partners to bolt his government, as Israelis reel under the impact of the conflict on their way of life.

Earlier this week, a security alert left thousands of Israelis stuck for hours at military roadblocks or remaining indoors (an ironic parallel with Palestinian life on the West Bank). The security clampdown worked, that day, and the terror suspects apparently left the area. But media commentators noted that even when the terror is foiled, Israelis pay a heavy price. And the same region went back on full alert Thursday.

For the Palestinian Authority, Hamas attacks sabotage any hope of a reviving the negotiation process on which its future ultimately depends. The U.S., the Europeans and most Arab states have made clear to the PA that curbing terror is the condition for any progress on the political front. But the PA isn't strong enough politically to simply decree that attacks must end, and PA officials have in recent weeks been locked in intense negotiations with leaders of groups undertaking terror attacks in the hope of persuading them to accept a unilateral cease-fire. It's been a tough sell, and any progress was dashed by the Gaza air strike. Given the political outlook of Hamas, in particular, any cease-fire would necessarily be a temporary tactical choice, undertaken principally to avoid forcing the PA into a head-to-head fight and to protect Hamas's position in the wider Arab world. But the Gaza strike suspended even that discussion. Israel had also been in discussions with Palestinian security officials over measures to ease the suffering of ordinary Palestinians, but those too are likely to be postponed amid a new wave of violence.

The fact that three Americans were killed in the Hebrew University bombing is likely to focus new attention on the Bush administration's Middle East policy, which has thus far proved ineffective. The Bush administration is being warned even by its most amenable Arab allies such as Jordan that support for an invasion of Iraq is unthinkable in the absence of a firm timetable for rapid movement toward Palestinian statehood in the West Bank and Gaza. But that's not a direction in which Sharon is heading, and the killing of Americans in a Palestinian terror bombing will raise domestic political pressure in Washington against any moves to press the Israelis along the diplomatic track.

With the political and diplomatic processes stalled, the deteriorating economic situation on both sides of the divide may begin to play a greater role in pressing the political leadership toward some form of solution. Palestinians in Nablus this week took to heart President Bush's injunction that they develop a market economy, and opened their vegetable market for three days in defiance of the Israeli curfew. This necessity-driven act of civil disobedience underscores the view of a growing number of Palestinian intellectuals that terror tactics harm their cause and that non-violent resistance to occupation is their best bet — and Palestinians defying a curfew in order to buy and sell tomatoes and eggplant are not going to easily tolerate gunmen in their midst provoking the Israelis. Much of the international effort to mediate the crisis is currently focused on efforts to ease the economic burden on ordinary Palestinians. On the Israeli side, this week's budget cuts and ongoing security crises underscore the fact that, like the Palestinians, the unending conflict is beginning to fundamentally alter their lives.

A letter from leaders of the Tanzim faction of Fatah proclaiming the intent to pursue a unilateral cease-fire was published in the Israeli media this week. Although it was pooh-poohed by the security establishment and its purported cease-fire initiative suspended after the Gaza air raid, it contains some words that may soon begin to resonate with people on both sides of the divide: "Our hotels are empty, our restaurants deserted, our factories closed, our businesses bankrupt, and our children hungry... You can survive, for a time, with ten percent inflation, and growing unemployment, and an army of young men in occupation of a foreign land... but inevitably and eventually, your hotels will empty, your factories will close, your businesses will be bankrupted, your children will go hungry and your soldiers will want to come home." Almost two years into the current intifada, Israeli-Palestinian relations remain stalled in a violent impasse. And right now, the cost of maintaining that impasse to both societies may be the best reason for hope among those seeking a political solution.