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I have yet to meet the person here, Arab or Jew, who believes that 2010 will be a good year in the Middle East. This may be the only hope we have left. It has happened before. Everyone could be wrong.

There do not seem to be any politicians left - on any side, Hamas and Kahane people included - who truly believe that their own ideology would really, truly, unqualifiedly work here. You can see it deep in the burn-out in their eyes. They are flogging dead horses, and they know it.

Still, with murmurs of impending intifada from Iran to Silwan, it's only natural to rummage the entrails of the year just past, for the kinds of peace signs and war drums that could foretell the year just beginning. Particularly after a year which was mostly entrails. Herewith a number of signs on which Mideast war and/or peace may hinge in the new year:

1. Political and economic upheaval within Iran

In the end, internal turmoil in Iran may prove to have a more decisive impact on the course of the nation's nuclear program, than international sanctions or the threat of military intervention.

More immediately, from a security standpoint, domestic considerations in Iran may also influence the orders and aid sent to Hezbullah and Hamas.

Two scenarios:

Peace: If reform protests widen, Iran's rulers will come under pressure to concentrate on the troubled domestic economy and lessen international isolation. This could force a re-evaluation of the nuclear program, which burdens Iran with the enormous costs of building, maintaining, securing and operating nuclear facilities in at least 16 locations, some of which are among the world's deepest and most expensive bunkers. There could also be pressure to cut military and other financial aid to Hezbollah and Hamas, and to curtail attacks on Israel. By the same token, however ...

War: If deepening reform protests seriously threaten the rule of Ayatollah Ali Khamenei, President Mahmoud Ahmadinejad, the Revolutionary Guard and the Basij militia, the government could order diversionary escalation by Hezbollah and/or Hamas against Israel. Whether the focus of hostilities was the north or the south, renewed conflagration would almost certainly lead to advanced Iran-supplied Katyusha rocket attacks specifically targeting the Tel Aviv region. Other primary targets could include Ben-Gurion airport and the Dimona nuclear reactor complex.

2. The Avigdor Lieberman indictment

The expected indictment against Lieberman on a range of money laundering charges could be crucial to any resumption of the peace process. But it has been delayed for long months by a range of factors, including the complexity of the case (the evidence is said to involve investigating leads as many as seven countries), the prosecutorial and evidentiary demands of the many graft cases faced by Ehud Olmert as well as the rape trial of former president Moshe Katsav, and the appointment of a new attorney-general who will be called upon to decide when and if Lieberman is to be brought to trial.

Peace: If Lieberman leaves the government [thus effectively gutting his Yisrael Beiteinu party of its public following] the Israeli political map changes overnight. There would be a much greater chance that Tzipi Livni's Kadima party would agree to join the coalition. If Benjamin Netanyahu truly means to move toward a peace based on a two-state solution, Kadima's 28 Knesset seats, the largest of all current parliamentary blocs, and its moderate ideology could anchor passage of key peace moves.

War: Although Lieberman voted for the settlement freeze, such as it is, and has made statements in the past regarding possible partition of the West Bank and even Jerusalem, his presence in the government and the Foreign Minsitry remains one of the strongest bulwarks against a peace process and rapprochement with Israel's neighbors.

3. Obama, and the wars in Iraq and Afghanistan

The conduct of the wars may well determine the nature and even the existence of a vigorous White House-driven peace bid for Israel and Palestine. A prompt resolution, as unlikely as that now seems, would free the administration to focus attention and resources on the two-state solution.

If, however, the U.S. public comes to view the wars as quagmires, traditional American isolationism may limit the administration's ability to propose and support compromise solutions, especially if aid is involved, whether military [e.g. peacekeeping] or economic [for settler resettlement]. Moreover, if the goals of nation-building and stability are unmet, the U.S. will be viewed in the Arab world as little more than an occupying power, and unfit as an honest broker. Finally, following a long string of missteps in addressing Israel, the president will at some point need to engage the Israeli public if he is to be seen in the Jewish state as an honest broker.

4. Gilad Shalit, and Hamas at a crossroads

A prisoner exchange involving Gilad Shalit and a total of 1,000 jailed Palestinians could spark a sea change in the Mideast diplomatic equation, especially if it included Marwan Barghouti, the only Fatah leader currently capable of uniting Palestinians and acting as an effective counterweight and partner to Hamas.

The prisoner issue is of paramount importance to the Palestinian public. Israel holds some 10,000 Palestinians in all, and there are few West Bank and Gaza families without family ties to the prisoners. But the prolonged negotiations over the exchange have shed light on the changing role of Hamas, and its difficulty in adjusting to it.

If Hamas does not agree to the exchange, many Palestinians will be bitterly disappointed. But if it does, it will have negotiated with an entity it has sworn to annihilate and never to recognize. What was once a precisely disciplined hierarchy is now an organization whose decision-making is split along various ideological [the issue of accommodation with Israel] and geographical [leadership in Gaza vs. leadership in Damascus] lines.

Then there are difficult domestic questions to address. There is tension in Gaza spurred by radical groups who believe Hamas has forsaken its militant Islamist roots. It is also lost on few Palestinians that the Israeli blockade of Gaza, which they properly view as collective punishment on a colossal scale, acts to enrich Hamas and enshrine its control through its overseeing and taxing the tunnel systems.

5. Israel's relations with Fatah

The recent IDF raid into Nablus illustrated all too well the fragility of the renewal of limited Palestinian Authority autonomy in the West Bank, the cornerstone of U.S. hopes to shore up Fatah in its rivalry with Hamas. The drive-by killing last week of a rabbi and father of seven, a member of a northern West Bank settlement, sparked an IDF decision to launch a raid into Area A, which is under PA civilian and security control. Three Palestinians suspected of the shooting were killed in the raid. Witnesses said they were unarmed when the IDF opened fire. What is clear is that the IDF has undermined PA efforts - largely successful of late - to curb attacks on Israelis. Stay tuned for loss of control.

6. Cast Lead II

No one wants it. The IDF doesn't want it. Hamas doesn't want it. Netanyahu doesn't want it. But everyone is preparing for it. And unfortunately, preparations can be more than just a sign. Preparations can have a terrible way of making the last thing you want, come true.

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