IN THE TWO YEARS SINCE PRIME MINISTER Benjamin Netanyahu came to power, the Palestinians seem to be making all the diplomatic running. “We are now in the home stretch for freedom,” Palestinian Authority (PA) Prime Minister Salaam Fayyad declared in mid-April after donor countries meeting in Brussels unanimously affirmed that the governing authority he heads was ready for the transition to full-fledged statehood.A few days earlier, Robert Serry, the special UN coordinator for Middle East peacemaking, had given his imprimatur: In the areas where the UN is most engaged, he said, “governmental functions are now sufficient for a functioning government of a state.” The UN seal of approval on governance coincided with World Bank and International Monetary Fund reports on the Palestinian economy, both of which concluded that the Palestinian Authority is now capable of running an independent state.Then in late April, catching most observers by surprise, PAPresident Mahmud Abbas overcame another major hurdle when his Fatah party, which rules the West Bank, signed an agreement with the breakaway Hamas government in Gaza, recognizing his authority over all Palestinian territory.Although Israel argues that having a terrorist presence in government should disqualify any Palestinian moves for statehood, the political reunification of the West Bank and Gaza under Abbas’s presidency has brought the Palestinians closer to meeting the conditions for statehood outlined in the 1933 Montevideo Convention – that is, having the capacity to govern a permanent population in a defined territory and to conduct foreign relations. The move thus swept away arguments that with Gaza under Hamas, Abbas did not represent all Palestinians or control sufficient Palestinian territory.Indeed, by the spring of 2011, the Palestinians seemed to have mustered a critical mass of support in the international community for recognition of a state in the West Bank and Gaza based on the 1967 borders.The only question is whether it will come unilaterally, via a request for membership of the United Nations in September, or in coordination with Israel, via an eleventh hour breakthrough in the long-stalled Israeli-Palestinian peace process.The procedure for UN membership entails a two step process: First the 15-member Security Council must recommend acceptance of the would-be new member state; then the membership must be approved by a two-thirds majority of “those present and voting” in the 192-member General Assembly.In the Palestinian case, the sponsors are almost certain to run into an American veto in the Security Council. Under normal UN procedure that would be enough to quash the Palestinian move. But there is a loophole, established, ironically, by the Americans themselves.In November 1950, to overcome deadlock in the Security Council over the Korean crisis, US secretary of state Dean Acheson initiated a circumventing procedure known as “uniting for peace.” Passed as General Assembly Resolution 377, it stipulates that in cases where the Security Council fails in its duty to maintain world peace because of differences among the five permanent members, the matter at hand can be referred directly to the General Assembly.In the event of an American veto, this is the procedure the Palestinians intend to invoke. But will it be enough to assure them UN membership? The Palestinians say yes. Israeli legal experts insist that without prior Security Council backing, any General Assembly resolution, even if it is the outcome of a “uniting for peace” session, will be nothing more than a nonbinding declaration with no validity under international law.ABBAS MAINTAINS THAT HE WOULD RATHER achieve statehood through talks with Israel. But he says he has little faith that this will happen with the Netanyahu government, which refuses to accept the basic principle of two states based on the 1967 borders.Therefore, since last October, when American-initiated peace moves again broke down, Palestinian diplomacy has been steaming ahead on the UN option. Abbas reckons that by mid-May he will have already sewn up over 140 for-certain yes votes in the General Assembly, well beyond the two thirds majority (128 with all present and voting) he needs.In its campaign to undercut the Palestinian move, Israel argues that the moral weight of any General Assembly resolution will depend not only on sheer numbers, but on the international standing of the states that support it. As a result, much of the Israeli effort against the declaration of Palestinian statehood is directed at the European vote.In a lightning visit to Berlin in early April, Netanyahu was apparently successful in convincing German Chancellor Angela Merkel to vote against. In May, he intends to make similar visits to London and Paris. For now, both Britain and France apparently lean towards supporting the Palestinian move. “Recognition of the state of Palestine is one of the options which France is considering with its European partners, with a view to creating a political horizon for re-launching the peace process,” French UN Ambassador Gerard Araud declared in late-April.Israeli officials say Netanyahu is considering three main options to counter the Palestinian plan: Persuading as many states as possible to vote against in both the Security Council and the General Assembly; getting the Palestinians to remove references to borders and Jerusalem from the recognition text, on the understanding that Israel will then join the entire international community in voting for Palestinian UN membership; coming out with a major peace plan that would preempt the need for a Palestinian UN move by paving the way for a negotiated two-state solution.Whatever step or combination of steps Netanyahu chooses, close coordination with Washington will be crucial. Indeed, only the US could persuade the Palestinians to drop the territorial reference and/or come up with terms of reference for renewed peace talks.THE PALESTINIAN UN INITIATIVE raises profound legal and diplomatic questions. Will it prove to be the “diplomatic tsunami” that Defense Minister Ehud Barak is predicting? Can Israel realistically do anything to stop it? Will it undermine the legal framework of the Oslo process, leaving Israeli- Palestinian relations in a state of legal chaos, as some assert? Will it mean the end of the peace process, as others warn? And what if Israel remains in the West Bank after Palestine becomes a recognized UN member state? Will it be a case of one country illegally occupying another? And if so, will the Palestinians be able to invoke international sanctions against Israel? And could this lead to an apartheid era South Africa-style syndrome, gradual intensification of sanctions over time until remaining in the territories becomes untenable for Israel? On the other hand, if all bets are off, could Israel annex the large settlement blocs? Could an entrenched Israeli presence in the West Bank trigger a new round of violence and terror with a heavy death toll and an erosion of hard-won diplomatic and economic gains on both sides? And finally, given the potentially horrific consequences for both sides, what are the chances the parties will pull back from brink, and, despite everything, agree to settle their differences over the negotiating table? Israeli legal experts argue that the Palestinian case is much weaker than it seems at first glance. Alan Baker, former legal adviser to the Foreign Ministry, argues that without a Security Council recommendation, Palestine will not be able to become a UN member state.According UN rules and regulations, acceptance by the General Assembly alone will not be enough, he insists. “It will be no more than a repeat of the resolution adopted by the General Assembly in November 1947, recommending that there be a Jewish and an Arab state in Palestine. There is nothing new here,” he tells The Report.“Nevertheless, it will probably have huge PR value. The Palestinians have very cleverly turned this into a huge existential issue. But legally speaking, it will be nothing more than another anti-Israel General Assembly resolution.”Baker maintains that the UN can’t simply foist borders and a joint capital on Israel. These things, he says, will ultimately have to be negotiated between the parties, along with the other outstanding permanent status issues. Moreover, by trying to get the international community to unilaterally impose their positions on Israel, Baker contends that the Palestinians are in serious breach of the 1995 Oslo Interim Agreement, which set up the Palestinian Authority, the presidency and the parliament, on the understanding that all remaining differences would be resolved through negotiations. “The Palestinian approach to the UN violates the Interim Agreement, and in so doing undermines the legal basis of the PA and all the other Palestinian institutions, creating the potential for legal chaos,” he avers.In Baker’s view, this Palestinian unilateralism has wider international ramifications, since it would render UN resolutions 242 and 338, which call for a negotiated peace, meaningless.“If the UN circumvents its own resolutions in such a cavalier fashion, what value is there to any future UN resolution purporting to solve crises in former Yugoslavia, Rwanda, Darfur or anywhere else? All you need to do is to organize an automatic majority in the General Assembly on a uniting for peace resolution and you are free of all your prior commitments,” he complains.Most significantly, Baker totally rejects the claim that once Palestine is recognized as a UN member state, Israel will turn overnight from occupier of disputed territory to illegitimate invader of a neighboring country. Indeed, he maintains that Israel is technically no longer an occupier, but rather is in the territories by legal agreement with the Palestinians as the transitional power until the land is divided between them.“Under the terms of the 1995 Interim Agreement, we have a license from the PLO to be there during the course of negotiations, and when we reach a permanent agreement, we will pull back according to whatever that new agreement stipulates,” he asserts. “It’s like when Israel signed the peace treaty with Egypt in 1979 and was still in Sinai in 1982. But between 1979 and 1982, Israel was no longer considered an occupier because it was there with Egypt’s consent. The same goes for Israel’s 1995 agreement with the Palestinians.”Baker, who was closely involved in the drafting of the 1995 agreement, contends that there is nothing in it that limits the time Israel can remain on the territories as the transitional power, and he insists that any Palestinian attempt to invoke sanctions against Israel because of its continued presence will have no legal foundation whatsoever. Therefore, because of what he says is the intrinsic weakness of their case, Baker believes the Palestinians may still drop the idea of approaching the UN in September.If, however, they don’t, Baker has some advice for the prime minister: “I would go to the Americans and say, get the Palestinians to drop the references to borders and Jerusalem and we’ll vote in favor. That would take the sting out of the whole thing. It would become a nonissue,” he states.THE PALESTINIANS ARGUE THAT THEY HAVE BEEN forced into the UN gambit by a recalcitrant Israeli government that refuses to engage in serious peace talks. “Our preferred option is to negotiate a peace settlement with the Israelis. But we cannot be held hostage to the status quo by an Israeli government that prefers dictation to negotiation,” Saeb Erekat, former chief Palestinian negotiator tells The Report.Contrary to Baker’s view, Erekat argues that once the UN recognizes the state of Palestine in the 1967 borders, Israel will no longer be able to define the West Bank as “disputed territory.” “Palestine will be a state under occupation. And there are real consequences for nation states that occupy other nation states. Just read the UN Charter,” he warns.According to Erekat, the Palestinians will easily be able to get the 128 votes they need for an assured two thirds majority in the General Assembly. He points out that 137 nations supported a recent Palestinian-initiated resolution against Israeli building in the West Bank settlements, and he is confident that considerably more will vote for Palestinian statehood.Moreover, the former chief negotiator strongly denies that getting UN approval for a Palestinian state would undermine the Oslo peace agreements. On the contrary, he says, it would enshrine the two-state solution implicit in the Oslo process. “We are not asking for Israel’s expulsion from the UN. We are asking for the state of Palestine to be added to the map, to live side by side in peace and security with Israel. And I think Israel should have been one of the first to take the moral high ground and recognize a Palestinian state in the 1967 lines,” he insists.Some analysts maintain that the Palestinians are no longer interested in peace talks, confident they can achieve their goals through international pressure on an increasingly delegitimized Israel. Others hold that the UN gambit is at least partly a means of putting pressure on Israel to negotiate. Erekat insists that if Israel stops building in the settlements and puts a serious peace offer on the table, the Palestinians will more than happy to reengage.SO WILL NETANYAHU PUT THEM TO THE TEST AND come out with a far-reaching Israeli peace plan in his much awaited address to the US Congress scheduled for late May? According to Israeli officials, Netanyahu was considering announcing a pullback from part of the West Bank as a gesture of goodwill. He was also contemplating a call to the Arab world to join Israel in an international peace parley along the lines of the 1991 Madrid Conference.But after the Fatah-Hamas reconciliation and the ongoing upheaval in the Arab world, the inclination in the prime minister’s inner circle seems to be to put the emphasis on Israel’s security needs in an increasingly volatile and unstable region.Zalman Shoval, a former ambassador to the US, now serving as the prime minister’s special envoy on peace to the US and Europe, says that for both Palestinian and regional reasons, Netanyahu will underline the need for a long-term Israeli military presence in the Jordan Valley, a demand the Palestinians reject as encroaching on their sovereignty.Shoval counters that developments in the Arab world and the possibility of Palestinian terror from the West Bank make it imperative.“After the American troops leave Iraq, Iran will try to turn it into a zone of influence and who knows what will emerge in Syria. We could find ourselves facing as serious a threat on our eastern front as we did 20 years ago,” he tells The Report.Shoval acknowledges that the government is concerned about the Palestinian approach to the UN, primarily because it could fuel efforts to delegitimize Israel. But he insists that it will not change things on the ground. “Will it force Israeli soldiers to leave their camps in the territories? Will it make hundreds of thousands of people who live around Jerusalem illegal? I don’t think so,” he avers.Moreover, if the Palestinians take unilateral steps, Shoval warns that Israel could too. For example, it could apply Israeli law to the large settlement blocs, which it insists would become part of Israel-proper in any territorial settlement. And although the Palestinians might try to use a UN resolution on Palestine as a basis for sanctions against Israel, Shoval does not think they will get very far. “At the end of the day, who will decide on these sanctions? The US and the Europeans won’t go along with anything like that. Indeed, in the US and in some European countries, boycotting Israel economically is actually illegal,” he contends.Opposition politicians and peace activists are less sanguine. Both Kadima and Labor party leaders warn that Netanyahu is leading Israel down a slippery slope towards diplomatic isolation. And Shaul Arieli, a leading member of the dovish Geneva Initiative, sees even darker scenarios. He maintains that Palestinian membership of the UN will unleash a host of negative processes, including economic and cultural boycotts, regional anti-Israel moves and possibly even terror against Jewish targets abroad.Complicating matters even further, Arieli, an expert on the territorial issue with the Palestinians, says that in a meeting with peace activists in early April, Abbas told him that once a Palestinian state is recognized, he sees no point in further negotiations with Israel. At that point, Abbas said, he would simply press the UN to enforce its decisions, including Israeli withdrawal to the 1967 lines.In other words: Israel could find itself with a Palestinian state on its doorstep and under pressure to withdraw from the West Bank, without having secured any of its declared basic interests, which include retention of the large settler blocs and the Jewish neighborhoods in East Jerusalem, demilitarization of the Palestinian state, resolution of the refugee issue, Palestinian agreement on end of conflict and finality of claims.Instead, the Palestinians would trigger a process eventually forcing Israel to withdraw empty-handed.“I don’t want to exaggerate. I don’t see international use of force against Israel. But, like South Africa in the 1980s, I do see sanctions. And as soon as they begin to bite, the Israeli people, most of whom don’t care about the territories, will start exerting pressure on the government to leave,” Arieli tells The Report.In Arieli’s view, the only rational thing for Israel to do in the circumstances is to negotiate terms for its withdrawal from the West Bank with the Palestinians. In that way, vital interests could be secured.But why should the Palestinians engage, if by internationalizing the conflict, they can achieve their goals without having to make concessions to Israel? Because, says Arieli, the sanctions route would take many years and much could change in the interim. Fatah could lose its preeminence in the PLO to Hamas. Major development programs could be compromised. Abbas could miss his chance of going down in history as the man who delivered Palestinian statehood.Arieli also points to another crucial time constraint: the Fatah- Hamas agreement to hold elections in a year. That, he says, leaves Israel just one year to wrap up a peace deal. “If it does, it would put Hamas on the spot. Hamas would have to decide whether or not it accepts the agreement or gets into a standoff with the PLO, the legitimate representative of the Palestinian people, on the eve of elections,” Arieli argues.For Arieli, the imminent establishment of a Palestinian state is inevitable, with or without Israel’s input. The big question, in his view, is whether the Netanyahu government will have the savvy to take some of the diplomatic play away from Abbas, Fayyad and company and to safeguard Israel’s vital interests.