Israeli and Palestinian leaders are fiercely demanding recognition as independent nation-states.

Abu Mazen (PA President Mahmoud Abbas) asks for the establishment of a Palestinian state, which will be solely responsible for the well-being and destiny of Palestinians. Prime Minister Binyamin Netanyahu asks for the recognition of Israel as the national sovereign homeland of the Jewish people, in order for Israel to be self-reliant.

These are justified demands of each other and of the international community. But there are also demands that have to be made of ourselves. Sovereignty not only means having the independent right to express national interests and sentiments, it requires a profound sense of responsibility toward the well-being and rights of citizens.

From this point of view, both leaderships show a worrying lack of maturity in relation to the current peace negotiations.

As for Israel, Netanyahu excels mainly in propaganda campaigns for his case, especially on security. He waves, with pathos, the Blue and the White, clinging to the maximalist demands of his government, such as large and many settlement blocs beyond the 1967 lines, a united Jerusalem as Israel’s capital, security arrangements unlimited in scope and time, no return of even a symbolic number of Palestinian refugees and the recognition of the Jewish state by Palestine. With these positions he can at most reach a peace agreement with Bayit Yehudi chairman Naftali Bennett.

The same is true for the Palestinians. Abu Mazen is repeatedly making speeches in which he outlines his maximalist demands – an independent state on the 1967 lines, with East Jerusalem as its capital, security arrangements with international forces, a right of return (though in principle, not in actuality) and no recognition of Israel as the Jewish homeland. With such positions he can at best have a peace agreement with Palestinian negotiator Saeb Erekat.

Abu Mazen looks more often at the reactions of his Fatah colleagues and to his popularity in the Palestinian street, rather than to the historic needs of difficult nation-building. Finally creating the independent Palestinian state, the Palestinian leadership must be attentive to its Israeli neighbors and to the international community.

The long-term interests of both peoples demand the creation of a new basis of common interests and compromise.

It may be harmful to popularity, but it is the only way for both sides to win. Compromise and prudence are a function of real strength. David Ben-Gurion, with Israel’s military victory in the War of Independence, could have conquered the West Bank. He refused and thus prevented a political and demographic disaster even then.

Charles de Gaulle had sufficient military might to maintain the occupation of Algeria in the ‘60s. Yet he preferred to take the unpopular route of granting and respecting the independence of Algeria.

Physical might or maximalist positions are not prescriptions to achieve gains for one country. In the age of regionalism and globalization, countries are interdependent.

In other words, the good of one country is also the good of the other, especially between neighboring states. Interdependence is not only economic but also in security, freedom and international legitimacy.

Translated to our region, there will be no freedom for Israel without Palestinian freedom; or as long as we are imprisoned in an unsustainable and immoral occupation.

There will be no security for Palestine without security for Israel; or as long as terror prevails against Israelis, Palestinians will not be safe. The economic well-being of both sides is interdependent as well, in terms of free trade, international investments and tourism. Our place within the family of nations is also a common interest – it can be strengthened only by a peaceful solution between us.

With the final stretch of John Kerry’s peace efforts, the leaderships of Israel and Palestine have to understand that our interests are intertwined in the future.

Maximalist demands and populist demagogy will lead to confrontation. Serving their countries, their peoples, and real patriotism means to compromise with each other, on all issues of contention and in creating a new regional relationship of mutual benefit.

On all the permanent-status core issues, compromise is possible and will favor a win-win outcome. As to the border between Israel and the Palestinian state: It should be along the 1967 lines with mutual and parallel land swaps. The compromise must allow a Palestinian state in the vast majority of the West Bank (and a demilitarized Gaza) with a minor annexation of the settlement blocs around Jerusalem in order to incorporate 75 percent of the settlers into sovereign Israel.

On security, only Israeli-Palestinian-Jordanian intelligence cooperation can provide an effective long-term defense against terror. Security cooperation with the US is of value to all sides. Given that terror is the prevailing security threat today, Israel cannot tolerate any threats after the withdrawal of the IDF. Therefore a temporary IDF presence on the Jordan River is something the Palestinians should agree to. Israel must understand that any IDF activity against terror cannot take the form of an occupation army. The compromise here is the complete end of occupation for complete security.

On Jerusalem, compromise is most difficult but necessary and possible. Both sides have strong historical and religious attachments to the city. The compromise, though, must be logical – that which is Israeli and Jewish to Israel and that which is Palestinian and Muslim to Palestine, which results in two political capitals within a united city. Given the religious aspects of this compromise, it is in this context where the Palestinians should recognize Israel as the nationstate of the Jewish people.

On the Palestinian refugee issue, the right of return can be only to the new independent state of Palestine.

In parallel, the international community must create a compensation mechanism for Palestinian refugees and acknowledge their tragedy. Israel must be part of the compensating countries.

The compromises on these permanent-status issues are difficult and possible, but are not the most important ones. The more significant ones relate to the strategic aspects of an Israeli-Palestinian peace deal. In return for a permanent-status agreement, Israel must gain recognition and economic cooperation from the Arab world, as outlined in the Arab Peace Initiative of 2002. The Palestinians should gain recognition and support for their new state and nation-building from the whole international community.

In other words, the real compromise is a significant “give” from both sides on the permanent-status issues and a more significant “take” from the Arab world, the United States, the European Union and the rest of the world for both states. This is a compromise that will, with time, strengthen both. Israel will cooperate economically with the Gulf countries and the Maghreb, its defense alliance with the United States will be upgraded, as will its status as a partner to the EU. The Palestinians will, for the first time, gain their equal place in the family of nations, with massive economic assistance from the US, EU and the Arab world.

These strategic goals can be achieved through a historic compromise between Israel and Palestine. A compromise will indeed strengthen both countries, much more so than making unrealistic maximalist demands and bickering with the US on the wording of the framework.

Compromise with courage and flexibility provides for long-term dividends – in the words of Albert Camus: “Blessed are the hearts that can bend, they shall never be broken.”

The writer is honorary president of the Peres Center for Peace and served as Israel’s chief negotiator for the Oslo Accords.

Barbara Hurwitz edited this column.

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