We've Won Jerusalem but Could Lose Startup Nation

Trump’s declaration will inspire the Israeli right to be more provocative than ever, heightening the risk that global business will shun Israel

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Protest following U.S. President Donald Trump's announcement that he has recognized Jerusalem as Israel's capital, near Damascus Gate in Jerusalem's Old City December 7, 2017.
Protest following U.S. President Donald Trump's announcement that he has recognized Jerusalem as Israel's capital, near Damascus Gate, JerusalemCredit: Ammar Awad, Reuters

At the risk of sounding cynical, from a business point of view, the best of all possible worlds is for Israel to have achieved peace with the Palestinians and our other neighbors. The second best is to be authentically moving toward an agreement with them, via negotiations. The worst situation is to be in violent conflict.

It’s not that Israel can’t defeat the Palestinians yet again, but it comes at a high cost to our global image, and poses a threat to our economy, which is dependent on trade and foreign investment.

Then, there is the second-worst situation, where we constantly reiterate our commitment to peace with the Palestinians but do nothing to move it forward and raise objections to anyone else who tries. Meanwhile, the settlements continue to grow, ensuring that if anyone in the future tries to revive the peace process, there will be nothing left to negotiate about.

Under Netanyahu, Israel has successfully been playing out Scenario No. 3. While doing nothing about the Palestinians, Israel has enjoyed not only improved diplomatic relations with up-and-coming powers like China and India but is evening winning the grudging tolerance of Saudi Arabia.

The boycott, divestment and sanctions movement is a like a gnat that gets attention all out of proportion to any harm it causes. The Israeli economy is growing and prosperous because it’s more globally connected than ever. Startup Nation is booming, thanks to billions of dollars of foreign investment annually flowing into the country.

Bibi has been a success, but he is playing a dangerous game all the same, and the decision by U.S. President Donald Trump on Wednesday to recognize Jerusalem as Israel’s capital has just made the game more dangerous.

Declaring that American recognition of Jerusalem as Israel’s capital will somehow make the Palestinians more amenable to peace is idiotic. It’s in the same category as statements like settlements aren’t an obstacle to peace, war is peace, freedom is slavery and ignorance is strength.

Bibi has been able to sell this bill of goods because he’s cynical, calculating and suspicious. He has never shown any sign of being a true believer in the Greater Land of Israel. He appreciates history not as an inspiration but as a lesson in danger and risk. He’s not a typical man of the Israeli right, which is why the right has never quite trusted him.

Irresistible urges

For the real right, Trump has opened the door for their fondest fantasies. Recall when Trump took office how quickly the settlers and their allies moved to take advantage of the new era, only to have their hopes dashed by the president not moving the Jerusalem embassy in his first months in office, his waffling on Iran and his loose talk about an “ultimate deal” peace process.

Palestinians protest the U.S. decision to recognize Jerusalem as Israel's capital, in Gaza City, Dec. 7, 2017Credit: Khalil Hamra, AP

Never mind that Trump yesterday still signed a waiver allowing the embassy to remain in Tel Aviv for now, or that he still spoke of a two-state solution, or that he said the borders of Jerusalem would be determined later, or that he called to maintain the status quo at the Temple Mount, which he even deigned to acknowledge is “also known as Haram al-Sharif.” Never mind that Jerusalem has been Israel's official capital since 1950.

For the right, symbolism is everything and practical matters are for eggheads, sissies and leftists. It’s less important that the Prime Minister’s Office, the Knesset and the Supreme Court are located in Jerusalem than that you got the greatest power on the earth to acknowledge it. And, you get to humble the Palestinians, to boot.

The right won’t be able to resist acting. No doubt activists are already plotting how to evict more Palestinians from their East Jerusalem homes and are contemplating how to expand the city’s borders into the West Bank. Now that they know Trump is truly the friend he said he was on the campaign trail, they’ll feel they have carte blanche to set up more illegal outposts.

Bibi will do his best to control them, but, as always, he’ll be torn between Israel’s strategic interests and the fact that the far right is a key constituency, and that Naftali Bennett and Company will take advantage of every lapse from settler orthodoxy. The police investigations against him for alleged corruption only make him more vulnerable.

The threat of another full-blown intifada is not great, although Jerusalem could end up being like the flutter of a butterfly's wings that ends up altering the course of the weather forever. More likely, Jerusalem will set off events that destroy the careful illusion that Bibi has created that Israel is still interested in peace.

The settlers and right-wing lawmakers will become more daring, the BDS movement will have more ammunition to use against Israel, governments will find themselves criticizing Israeli actions more often and in harsher terms, and the chances of an upsurge in violence will grow.

All this will bear a price.

Israel’s tech prowess is so strong now that a retreat to the bad old days when Israeli business was disconnected from the globe is hard to imagine. But it’s easier to imagine a distinct cooling in the business world’s attitude toward Israel, all the more so today when companies are being asked to take political stands like never before on issues like gay rights and immigration.

For the right, none of this is important. No one calls a rally and raises the blue and white flag when a big multinational invests in Israel. Investment and trade are just about jobs and economic growth -- and that’s for sissies and leftists to worry about.