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Last Saturday, exactly two years after Kofi Annan appointed him to replace Terje Roed-Larsen as the UN Special Coordinator for the Middle East Peace Process, Under-Secretary General Alvaro de Soto headed back to UN headquarters in New York. The 64-year-old Peruvian diplomat's 25 years of distinguished service in the world's most important international organizations came to an end with more of a whimper than a bang. He bid farewell to a bleeding Palestinian society and a confused Israel society.

De Soto left his Palestinian friends with a World Bank report that points to a serious humanitarian situation in the territories that fall under Israel's responsibility. He left his Israeli friends grappling with the Winograd report, which points up the state of the leadership on which the fate of the residents of Israel and the territories is dependent.

De Soto earned his laurels in El Salvador, where he spent most of the 1980s. There, he shuttled tirelessly between the government and the rebels and emerged with a peace agreement that put an end to a conflict that had left the small country with 75,000 dead. In the late 1990s, he was sent to mediate between the Greeks and the Turks in Cyprus.

Before coming here in May 2005, he was told that, unlike the other areas of conflict in which he had been involved, the parties to the Israeli-Palestinian conflict may kill each other but at the same time they also talk with each other. Israel's disengagement plan that was undertaken not long after he took up his position in his Gaza headquarters also appeared to hold promise for the future. But the Hamas victory in the Palestinian elections, Ariel Sharon's disappearance from the scene and, to top it off, the Second Lebanon War, drained the title of "special coordinator for the peace process" of meaning. De Soto's contingent of security guards continued to grow while his diplomatic missions continued to shrink.

Barrier of denial

The interview with De Soto took place at UN headquarters in Jerusalem, shortly before he left to attend one of the farewell parties given in his honor by colleagues in the capital. After loosening up a little from the restrained diplomatic style to which he has become so accustomed, Ambassador De Soto really took the gloves off.

Do you share the assessment that in the Second Lebanon War, Israel placed Prime Minister Fouad Siniora's government in danger?

"I believe that Israel did not intend to topple the Sini ora government and bring Hezbollah to power. But, intentionally or not, the Israeli assaults put him in an extremely difficult situation and put the regime in danger. I saw Siniora during the war and I know how grave his situation was. Israel selected targets with a careless use of its military might and prosecuted the war in a way that disproportionately harmed Lebanese civilians. It went way too far in this war. And still today, the Israel Air Force flights in Lebanese skies, because of a purported need to monitor arms smuggling to Hezbollah, are making it difficult for the Siniora government to stabilize the situation in the country and on the border. We receive reports from Israel about the inflow of weapons, but we have no way to check these claims."

Does Israel use excessive force and unnecessarily harm civilians in the occupied territories as well?

"I find it very hard to understand how Jews can surround people with cement walls and barbed-wire fences. This doesn't accord with the image I had from my encounters with the many Jewish friends I grew up with in Peru. I believe wholeheartedly that if Israel's citizens knew what was happening in the territories, they would show more sensitivity and change their view concerning the government's policy in these territories. The wall creates a cognitive barrier of denial and a release from the need to display empathy to people who live on the other side of it. If I could, I would take groups of Israeli citizens and show them how the checkpoints destroy the economy and the fabric of Palestinian life, and how the fence divides mother and child, a farmer and his land. These are destructive actions.

"In addition, Israel continues to withhold VAT and customs duties, which are collected from Palestinian exporters and importers in accordance with a previous agreement. This sum amounts to one third of the PA's budget. The Quartet's position [calling on the PA to recognize Israel, implement previous agreements and cease espousing violence in order to be eligible for aid - A.E.] refers to aid from donors. It does not refer to Israeli obligations, and certainly not to obligations under agreements endorsed by the Security Council. How can the PA be persuaded to comply with ?previous agreements' if Israel doesn't do so? I'm not sure whether many Israelis realize the consequences of this withholding: PA-salaried doctors, nurses and teachers are the main providers of basic services to the Palestinian people."

You don't accept the argument that the checkpoint and the other restrictions are necessary to prevent terror?

"It seems self-evident to me, barrier or no barrier, that Israel has a built-in interest in the neighbors' well-being. Moreover, research shows that this kind of pressure strengthens extremists and weakens the moderates. How can that be in Israel's interest? In 2003, at the IPA Conference on Fighting Terrorism for Humanity, the previous UN Secretary Kofi Annan said that 'to compromise on the protection of human rights would hand terrorists a victory they cannot achieve on their own. The promotion and protection of human rights, as well as the strict observance of international humanitarian law should therefore be at the center of anti-terrorism strategies.'

"Terrorists thrive on despair. They may gain recruits where peaceful and legitimate ways of redressing grievance do not exist, or appear to have been exhausted. But the fact that a few wicked men or women commit murder in its name does not make a cause any less just. Nor does it relieve us of the obligation to deal with legitimate grievance. On the contrary, terrorism will only be defeated if we act to solve the political disputes and long-standing conflicts which generate support for it. If we do not, we shall find ourselves acting as a recruiting sergeant for the very terrorists we seek to suppress. T ake, for example, the big IDF raid on Beit Hanun, where the soldiers conducted house-to-house searches. There are at least 80 children living on each block there. They won't forget the face of the frightened Israeli soldier who knocked on the door of their house in the middle of the night and startled them out of bed. These types of experiences are etched in children's memories for many years."

'Like a rare orchid'

Israel left Gaza and is getting showered with Qassams. Do you know any government that wouldn't respond when its citizens were being subjected to continual rocket fire?

"The unilateral disengagement from the Gaza Strip spawned disappointments on both sides. Israel thought that following the withdrawal from Gaza the Palestinians would stop attacking it. Notwithstanding the departure of the settlers, the Palestinians do not see an improvement in their plight - to the contrary, they feel as imprisoned as ever. There is no doubt that the solution can be achieved solely by means of negotiations, but given the hatred and lack of trust between Israel and the Palestinians, negotiations will not progress without a mediator.

"The UN does its best, firstly, to alleviate the impact of the crisis on the Palestinians in the occupied territory. This has become extremely difficult because of US and EU restrictions on dealing with the PA and Israeli restrictions on movement. The UN is constantly advocating with Israel the need to facilitate movement and ease access by UN and other workers, without which it is difficult for them to ensure the welfare of the Palestinians, which is the responsibility of Israel, under international law, as the occupying power. Secondly, with our political interlocutors on both sides the UN advises them on how to overcome the crisis and put the road map back on track, by fulfilling their obligations in parallel. But the UN is not a mediator by any means."

It sounds as if if it were up to you, the Quartet would lift the boycott of the Palestinian unity government.

"You can't choose your peace partners. The only way to impose law and order in the territories and to bring about a cease-fire is by strengthening the Palestinian security mechanisms and creating conditions that will enable them to operate under a single command. The Palestinians are interested in restoring order in the territories, and law enforcement will also apply to those who attack the neighbor. This is possible only under the Palestinian unity government. I find it hard to understand how polarization in Palestinian society, sabotaging the unity government and attempting to prevent it from fulfilling its responsibility serves Israel's interests. Hamas' acceptance of the Mecca Agreement and its presence at the recent Arab summit in Riyadh represents clear movement on their part, and it is obvious that that movement should be encouraged."

What goes through your mind when you enter a bustling and lively Tel Aviv cafe right after a visit to Gaza?

"I feel a great sadness. Every time I toured the Gaza Strip I gazed at the vast area that until recently was covered with villas surrounded by spacious gardens. I looked at the remnants of the army camps that the IDF left behind and I remembered Ariel Sharon's Herzliya speech, in which he said that it was necessary to awaken from the dream that the Jews would remain in Gush Katif forever. I asked myself, 'What were the Israelis thinking? How could such intelligent people have believed that the cottages and the army camps could exist forever in the heart of one on the poorest populations in the world?'

"As a veteran observer I stay out of domestic politics. All I will do is pay tribute to the extraordinary, even enviable openness of Israeli society - even if it isn't necessary helpful to conducting privately matters, which need to be kept private to produce a successful outcome, such as peace efforts. Like rare species of orchids, peace processes tend to wilt when exposed to the open air."

What is your prediction in relation to the fate of our conflict?

"If there is no progress in the peace process and if the boycott continues, there could be a dire situation very soon. This is a highly volatile combination. On the one hand, Palestinians in the West Bank endure the continued postponement of negotiations which are the only hope for a peaceful way out. On the other, the prospects for a viable Palestinian state dwindle before their very eyes, what with the inaction on unauthorized settlement outposts, the incessant activity to consolidate the existing settlements deep in their territory, the headlong pace of construction of the barrier, the attempted Israelization of Jerusalem and the movement restrictions which humiliate them and stifle economic activity."

Are you surprised by Israel's cool response to the overtures from the Arab League in general and from Syria in particular?

"Israel has historically been the one that extended its hand to its neighbors in search of peace, and for a long time met with reluctance or rejection. I find the reversal baffling, somehow unnatural, and very worrisome. I can only hope that it is a parenthesis and that cool, dispassionate heads and the long view will prevail. If the principle of ending occupation is accepted by Israel, I should think it would throw the ball back into the Arab court and offer the potential of discussions on how to get there - i.e. of a negotiation.

"I have little to add to what Colin Powell said recently to Newsweek: "You can't negotiate when you tell the other side, ?Give us what a negotiation would produce before the negotiations start.'" Richard Haass and George Mitchell wrote an article in The International Herald Tribune about Northern Ireland, making points that can be applied to this case as well; they caution against preconditions: 'Front-loading a negotiation with demanding conditions all but assures that negotiations will not get underway, much less succeed.'

"An open-minded, positive and comprehensive approach would be the best offer that Israel could make to its neighbors and to its own people."