Israel's Last-Ditch Peace Plan

By Matt Rees/Jerusalem

Mohammed Helo sits in the murky shadows inside his pharmacy. He turned the lights off to save electricity when violence engulfed the West Bank in the past month and his customers stopped coming. It is an emblematic darkness. Helo's village, Bidya, had been a bright symbol of the links that peace had forged between Israelis and Palestinians. Israelis came to Bidya, only a few miles from Tel Aviv's suburbs, to spend $50 million a year on furniture, clothes and auto parts. Then came the new intifadeh. Four weeks ago, an Israeli was murdered there as he waited for his tires to be changed. And Mohammed Helo flicked the switch.

Now Bidya is once more a microcosm of what is being planned by the politicians. Israeli Prime Minister Ehud Barak's advisers are sketching out "unilateral separation," which they will impose on the Palestinians if Yasser Arafat declares statehood, something that could happen as soon as this month. That means choking off the Palestinian economy from Israeli oxygen. "Separation is economic war," says Helo. "It is a war of hunger, and it is very dangerous."

Israel is looking for alternatives to the peace process. Separation is the only option it has found. It would break many of the close economic, political and legal links that have grown out of years of occupation, from the Israeli cell phones that Palestinians carry at their hips to the Palestinian sweet potatoes on Israeli dinner tables. Israeli Foreign Minister Shlomo Ben-Ami says the separation plan will kick in only if Arafat declares his state unilaterally, as he threatens to do after Nov. 15. That state was supposed to be negotiated with Israel, so, Ben-Ami says, Israel will view a declaration as the end of the peace process. President Bill Clinton, scrambling to keep peace alive, has invited Arafat and Barak to the White House once the violence subsides to talk about resuming those negotiations. But there's a strong urge among Israelis to turn their backs on the Palestinians, whose leader rejected at Camp David this summer what they see as a generous offer of about 95% of the land in the West Bank. "Arafat is leading the Palestinians toward the declaration of a hostile state born in conflict, not from the peace process," Ben-Ami tells TIME. "Separation is the inevitable response."

Many Israelis have long hankered for separation. Yitzhak Rabin once told Arafat he wanted separation "not out of hatred, [but] out of respect." Palestinians, he believed, needed to find a way to stand on their own. Barak's election campaign last year ran a poster with the slogan US HERE, THEM THERE. But it was supposed to be the result of peace talks. U.S. diplomats fear that separation--even if it comes in response to a unilateral move by Arafat--will lead only to more violence as Palestinians feel the shock of isolation. "For the peace process, unilateral separation is truly disastrous," says a U.S. diplomat. "What flows from it is inevitable conflict." The appeal of separation for Israelis is that they could pull their soldiers back to more defensible positions in the West Bank, avoiding the friction points on the edges of Palestinian towns where their troops now face off against rioters. They would also give up enough land to put the onus on Arafat to make his new state work, instead of blaming Israel for its problems.

But while political separation would be welcomed in Ramallah and Gaza, the threat of economic separation is regarded by most Palestinians with real horror. Mohammed Khatib, a 30-year-old father of four, hasn't worked since the violence began. He used to earn $30 a day as a construction worker in Jerusalem. A job in his hometown of Bethlehem would pay half that--if he could find one. But there are no jobs, and Khatib sits at home "smoking and drinking tea." Like a quarter of all Palestinian workers, Khatib either earns his money in Israel or earns nothing. "This separation idea is intended to break our noses," he says.

Khatib's younger brother Issam also lost his job with the onset of this intifadeh. Issam was a receptionist at the Oasis, a casino in the Palestinian town of Jericho, part owned by Arafat and frequented almost entirely by Israelis. When the violence started, Israelis were barred from traveling into Jericho. The Oasis closed. "I didn't look upon the people who came there as Jews or Muslims," says Issam, who earned what was for a Palestinian the princely sum of $1,000 a month plus tips. "They were all just gamblers to me." Even if calm were restored, he doubts Israelis would return. These days, it would mean gambling with their lives. If Israel declares a separation, the Khatibs face months of hardship in their rundown house on the edge of a refugee camp. With such examples in mind, the Israelis who oppose separation argue that the poverty it would impose on Palestinians could prompt sanctions by the European Union, which includes some pro-Palestinian countries.

Israeli officials acknowledge that they don't yet know exactly how to separate. Barak has distributed The Disengagement Imperative, a recent book by Israeli political scientist Dan Schueftan, to each of his Cabinet ministers. Schueftan calls for absolute separation, even in hot-button spots like Jerusalem. "We need to partition Jerusalem, not because the Palestinians deserve to rule over any of it," he asserts, "but because we don't deserve to be stuck with the Palestinians." Technocrats are still figuring out how to handle a physical separation. Military sources say it will mean building Israeli-only roads around Palestinian towns in the West Bank. Foreign Minister Ben-Ami declines to say if separation will mean pulling out of some Jewish settlements. In Jerusalem, he admits, "it's not easy at all" to separate the Arab and Jewish neighborhoods that are cheek by jowl throughout the eastern part of the city.

The test case, so far, has been the Jewish neighborhood of Gilo, on the southern edge of Jerusalem, and the nearby Palestinian town of Beit Jalla. For three weeks Palestinian gunmen in Beit Jalla have fired in the night toward Gilo. Last week Israel increased its response from rifle fire to tank shells and then helicopter missiles. One missile shattered the wall of Jamil Muslet's living room. It left a 5-ft. hole in the 200-year-old stone walls and shards of blue window glass on the floor. Looking across the steep, rocky valley to Gilo, less than a mile away, Muslet intertwines his fingers. "We and the Jews live like my interlinked fingers," he says. "Separation is stupidity."

Washington has to hope it can pre-empt Arafat's declaration and Barak's separation. In private, the Palestinian leader is showing signs of wanting to step back from the abyss. But his next steps involve the tricky problem of pleasing both the world community and his constituents. In a meeting of his national security council last week, top figures from his Fatah faction tried to dissuade Arafat from accepting Clinton's invitation to the White House. The trip, they felt, would be a humiliation in the face of a House of Representatives vote to support Israel. "I'm not going to wander the streets," Arafat replied, according to a close aide. "I'm going to meet the President himself." That may be Mohammed Helo's best chance of switching the lights back on.

--With reporting by Edward Barnes/Bidya, Jamil Hamad/Bethlehem, Aharon Klein/Jerusalem and Douglas Waller/Washington

With reporting by Edward Barnes/Bidya, Jamil Hamad/Bethlehem, Aharon Klein/Jerusalem and Douglas Waller/Washington