Next week, Tony Blair will mark three years as the Quartet’s Middle East envoy – the official tasked by the UN, the EU, the US and Russia with coordinating efforts to achieve an Israeli- Palestinian peace accord.

He took up the post immediately on resigning as British prime minister after a staggering 10 years in that job, and has played a critical behind-the-scenes role in this one. Notably, for instance, he has coordinated between the Israeli government and the Palestinian Authority on the easing of restrictions on movement in the West Bank and the facilitation of major West Bank infrastructure projects. He was also a central player in this week’s Israeli government decision to change its policy on imports to Gaza – from one that barred everything that wasn’t on a permitted list, to one that allowed everything that wasn’t on an outlawed list.

Blair has long styled himself, and been perceived, as a firm friend of Israel. There are those who argue that his gradual slide from office in the UK, in fact, though primarily associated with his deeply unpopular partnership with President George W. Bush in the war against Saddam Hussein’s Iraq, was also a consequence of his similarly unpopular support for Israel, notably at the time of the Second Lebanon War. Simultaneously, he has been a firm advocate of the statebuilding efforts of the Palestinian Authority leadership of Mahmoud Abbas and Salam Fayyad.

Throughout his three years in the Quartet envoy’s post, indeed, he has been consistently optimistic – “stupidly so,” he half-joked, in a self-deprecating aside during our interview – about the prospects of a viable Israeli-Palestinian accord. But he has always stressed the need for “a bottom-up approach” in which improvements in daily life on the ground for Palestinians, and in security for Israelis, create the climate for political progress. “When that’s aligned, you’ve got a chance,” he said in our conversation this week, which took place at his rooftop headquarters at Jerusalem’s American Colony Hotel.

Excerpts:

The decision to ease the blockade presumably means it will now be easier for Hamas to maintain its hold on Gaza. If the goal remains Hamas no longer running Gaza, how now might that be achieved?

The only way of making sense of this for the future is that either the grip of Hamas on Gaza is loosened or alternatively Hamas changes. I personally think that for those Palestinians who want to see peace, it is better that life for the people in Gaza is improved.

People say to me: ‘Well, Hamas get the benefit’ [of the easing of the blockade]. I’m not sure that’s true. In a way, it suits those elements that don’t want peace to have Gaza in the situation where they can say that ‘there’s a sort of humanitarian crisis that’s been caused by Israel,’ where they can smuggle stuff through the tunnels and where the legitimate economy is squeezed.

Long term, all of this comes back to the same thing, which is that if you can create a serious and credible momentum for peace, then Hamas is weakened if it does not change its positions. If there is no momentum for peace, then [Hamas is] strengthened.

But there hasn’t been progress on the diplomatic front. There haven’t even been direct talks for more than a year now.

There are two positive directions: First of all, whatever the stalemate diplomatically, the fact is there has been progress on the West Bank. The economy is growing 10 percent [per annum] there. We just held this Palestinian investment conference. There were hundreds of millions of dollars worth of investment announced.

[Second], the way the Palestinian Authority is operating on the security front is a world away from where it was a few years ago. You go to Nablus, Jenin and places like that, and there is a proper Palestinian security presence.

And I hope that in the next couple of months we will turn these [George Mitchell-brokered] indirect talks into direct negotiations. There’s no reason really not to.

Except that the PA says it doesn’t want to.

Well you can create circumstances in which they understand it’s in everyone’s interest to sit down and talk and see if there’s a basis for agreement.

My theory for this is and always has been something very simple: It is hard for Israel to contemplate a Palestinian state unless it can be sure that state will be securely and stably governed. That’s the basic problem.

As I say to people, if Israel thinks that what’s happened in Gaza is about to happen on the West Bank, it would be absurd to say that could be treated with indifference. This is not just a question of borders; it’s a question of the nature of the Palestinian state, how it’s governed, whether there is a stable, predictable basis for long-term peace.

That’s why I’ve always said the bottom-up approach is the right approach. Which is not to say that substitutes for a political negotiation. But it is only when there is an alignment between what you’re trying to negotiate politically, and what is actually happening on the ground – which for the Palestinians is about daily life, and for the Israelis it’s about security – that you’ve got a chance.

When that’s not aligned, you’ve got no chance – which is why the political negotiations up to now haven’t worked.

The narrative we hear from the Prime Minister’s Office is that the negotiating process can’t work because the Palestinians think that if they just wait, the EU or the US are going to impose a solution.

There is no solution that can simply be imposed.

Does the PA recognize this? I think so, yes.

The most that certain parameters can ever do is help define a direction the parties [already] wish to go in. The idea that you suddenly slap down a solution, and say, ‘That’s it, there you are, I’ve decided it’ – that’s not the way it works.

Personally, I think that the Palestinians understand that this has got to be built over time. They simply want to know that the Israelis are serious about giving the Palestinians a state, and that the negotiations will be credible. That’s what they say to me, and I think that’s perfectly reasonable.

PA Prime Minister Salam Fayyad is building a state in the West Bank. But is he building a state ready to reconcile with Israel?

Yes. He’s a total supporter of a two-state solution.

And is this Israeli government prepared to take the necessary steps?

Yes, I think they are, in the right circumstances. People ask me from the outside, ‘Is Bibi Netanyahu prepared for a Palestinian state?’ I say, ‘yes, in the right circumstances.’ And they say, ‘Well, you’re qualifying it.’ And I say, ‘You’ve got to qualify it.’

The truth is that if the circumstances are right – and those circumstances, from the point of view of Israel, are about their long-term security – then yes, I think people are prepared to recognize that a Palestinian state is the right solution.

But if you can’t deal with the security issue, the circumstances aren’t right.

This is why I think that what Fayyad is doing is so important.

In the end, security is not just a question for Israel. It’s a question for the Palestinians. If you want a properly governed state, you’ve got to have proper functioning security forces.

You’ve got to have one rule of law. You’ve got to have courts, prisons, prosecuting authorities.

You’ve got to have the full infrastructure of a judicial and criminal system. And if you don’t have that, you’re always at risk of a disintegration of the most basic function of statehood, which is to provide law and order.

This shift that you’ve mediated now, on what goes into Gaza, was a consequence of pressure on Israel following the fatal interception of the Mavi Marmara…?

I’ve been talking about this with the prime minister and his colleagues for a long time, actually. My argument was and always has been that there is a very clear distinction, the only distinction in the end you can sensibly justify, between the security needs of Israel and [the] daily life [needs of Gazans].

This is a position I actually believe the prime minister feels more comfortable with, because you can justify it.

So the previous policy, aimed at weakening Hamas and placing pressure for the release of Gilad Schalit by imposing restrictions that affect every Gazan, was a mistake that should have been corrected in any case?

The trouble is you have the tunnels, which Hamas have a complete grip over. There was and is an alternative means of goods coming into Gaza.

Your statement in support of the new Gaza arrangements on Sunday was interpreted by the Prime Minister’s Office as saying that you, and as a result the international community, now recognize Israel’s naval blockade of Gaza. Is that wishful thinking?

No. I think people understand that Israel is going to insist that any stuff that comes into Gaza is checked. That’s not the point, frankly.

The point is not to get things into Gaza port; the point is to get things into Gaza. And if you have this new policy in place, you can do that.

This was seen here as very significant because there are other boats coming. If you stand up and say, ‘the naval blockade is legitimate,’ then Israel feels it has greater legitimacy to act against those boats.

Yes. Where I divide from some others in the international community is that I think that Israel has got a genuine security concern that it is entitled to meet. For me the fact that Israel says, ‘Look, we’re not going to allow things into the [Gaza] seaport but you can bring them to Ashdod, and we can check them, and then they can come on to Gaza,’ I think that is a reasonable position.

What you can’t justify is saying that basic foodstuffs and household items can’t go into Gaza.

Under the new arrangements, would you say to anybody who is considering joining a flotilla to bring aid to Gaza, shouldn’t be doing so?

What I say to anybody organizing a flotilla is that if we implement this [new eased] policy, so that the things that people are trying to bring in by flotilla you can bring in through the legitimate existing crossings, do it that way. That is the more sensible way to do that.

What is the thinking about how to give the PA credit from this? There’s talk about putting the PA at the crossings. Has Israel signed an agreement…

The PA does not benefit, and President Abbas and Prime Minister Fayyad do not benefit, from the conditions for people in Gaza being bad. Improving the conditions of people in Gaza, by whatever means, is helpful to the overall cause. So, yes, there’s an issue obviously about the PA at the crossings, and that’s something that will be explored now. Likewise, the European Union mission at Rafah. These are conversations that we will have.

What do you think of those of your international colleagues who believe some effort should be made to reach out to Hamas?

 It would be better if Hamas were part of this process. But it’s their choice, really. When people say the international community should reach out to Hamas, it’s not as if Hamas aren’t being spoken to. People talk about this as if there was some failure of communication.

There are plenty of people that talk to Hamas. The Egyptians are talking to Hamas constantly. People talk to Hamas, and Hamas know perfectly well what they need to do in order to come into the process.

It’s very important to describe these Quartet rules [which require Hamas to recognize Israel, renounce terrorism and accept previous Israeli-Palestinian agreements as pre-conditions for international legitimization] not in the sense of a piece of bureaucracy.

The point is that if you want to be part of a negotiation for a state of Palestine and a state of Israel, one, it’s quite difficult to do that in circumstances where you’re sitting across the table from people and saying, ‘We reserve the right to kill your citizens at the same time as we’re having this talk.’ That in my view doesn’t work as a negotiation. And two, obviously, it’s quite difficult if you say, ‘But we don’t actually accept that you should have state, that your state exists.’ These [Quartet rules] actually derive from a sensible political analysis. They don’t derive from some capricious folly on the part of the international community.

Sometimes there are statements that come out of the Hamas leadership that seem to indicate they’re prepared to make a change.

But then, other times, they don’t. Take the Gaza situation now: If you really want to make this work, to take the change that’s been made by Israel in its policy, and say, ‘Right we’re going to get behind this and use this as an opportunity to boost the whole process,’ I mean, what would you do? You’d release Gilad Schalit, wouldn’t you? And you’d say, ‘Now we can get a whole lot of prisoners released from the Palestinian side,’ and everyone would feel better.

So if they want to play a constructive [role], the door is absolutely open. But they’ve got to want to be part of it. I don’t think this is a failure of ours – that we’re not reaching out, or failing to communicate. They know perfectly well what we’re saying and why we’re saying it.

Yet we see Abbas trying, or purportedly trying, for some kind of reconciliation with Hamas – when, if he is reconciled, that complicates any prospect of moving forward.

When people, particularly from the Arab media, say, ‘Don’t you think Palestinian reconciliation is a good thing?” I say, ‘Yes, it’s a really good thing, but the only reconciliation that ever works is one that’s genuine.’ The question is: On what terms can you achieve that unity? For example, if the unity was to be at the expense of the progress we’ve made on Palestinian security, that would not be a sensible deal.

When you take a step back and you analyze this whole situation, the basic problem is that people have lost faith in the political process to deliver a credible solution – on the Palestinian side and on the Israeli side. It was only when I came back to this after leaving office [as British prime minister ] that I understood the impact of the [second] intifada and the disengagement from Gaza on the Israeli mindset. The combination of those two things fundamentally changed the way Israelis look at this situation. Their position now is to say, ‘Show us that if we make peace, it’s a genuine, lasting peace with a Palestinian state that we can predict, that is stable, and that is a secure partner for us. Show us that, and we’ll give it a go. But if you can’t show us that, the experience of the last 10 years makes us very doubtful.’

And are we being shown that? What you have are contradictory elements.

If you look at what’s happened in Gaza with Hamas, then you would be skeptical. All I’m saying to Israeli [public] opinion, is that if you look at what Fayyad has done with Palestinian security and the changes in the economy on the West Bank, you should at least factor that in and therefore not exclude the possibility that we can actually make progress.

This will only work if you build the state and its institutions bottom-up as well as negotiate these traditional political issues top-down.

How troubled are you, and how troubled should we be, about the demonization and delegitimization of Israel? It does trouble me because I think that the security of Israel is a fundamental part of our security too, in countries like mine.

The lesson is to take the ground that is always justifiable. And there is ground that is justifiable. That’s why the policy we’ve now articulated on Gaza is a sensible policy. I, as a friend of Israel, can go out and justify this policy. As you put it in your paper, ‘Coriander, yes; Kassams, no.’ I can justify that policy.

What I found hard to justify was ‘Coriander, no.’ There is a constant battle here [against delegitimization] that anyone in Israel is well aware of. That’s why the smart thing is always to be on the ground that you can defend most easily.

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