Political leaders not suspected of extreme opinions on the Israeli-Palestinian conflict have given up hope of reaching a negotiated peace deal – at least in the near future.Speaking in Berlin during a joint press conference with Prime Minister Benjamin Netanyahu on February 16, German Chancellor Angela Merkel voiced her pessimism, noting that “now is certainly not the time to make really comprehensive progress” due to the current climate in the Middle East.Closer to home, in January, Isaac Herzog, leader of the opposition and head of the center-left Zionist Camp, told Army Radio that the two-state solution is not feasible right now.“I don’t see a possibility at the moment of implementing the two-state solution. “I want to yearn for it, I want to move toward it, I want negotiations, I sign on to it and I am obligated to it, but I don’t see the possibility of doing it right now.”Myriad obstacles prevent the sides from moving forward.The “moderate” Palestinian Authority President Mahmoud Abbas would never agree to compromises on issues such as the “right of return” for Palestinian refugees or allowing settlement blocs such as Ma’aleh Adumim to remain a part of the State of Israel. He would never agree to Israeli control over the Jordan Valley or to sharing Jerusalem as a joint Israeli-Palestinian capital. Even if he did agree to a framework that a majority of Israelis would be willing to accept, Abbas hardly represents a majority of Palestinians.Palestinian political leadership is hopelessly split between Ramallah and Gaza City. Hamas seems to be more popular both in Gaza and the West Bank than Abbas’s Fatah Party. And with Hamas, a terrorist organization bent on the destruction of the Jewish state, there can never be a resolution of the conflict. Besides, Palestinians cannot put aside their own differences. How can they be expected to reach a peace deal with Israel? Still, there might be a way to move forward. The sides – in particular Israel – can take steps to improve the situation on the ground and foster better relations. There are a number of fields in which cooperation and dialogue could benefit both sides. And it appears steps have already been taken.According to a report by Channel 10, Finance Minister Moshe Kahlon has met several times with his Palestinian counterpart, Shukri Bishara. The two have discussed a number of initiatives aimed at improving ties between Palestinians and Israelis. And these initiatives have been presented to Netanyahu for his approval.Some of the initiatives include inviting Palestinian doctors to train in Israeli hospitals; new study and internship opportunities for Palestinian tech entrepreneurs and engineers in Israel’s world-leading hi-tech industry; allowing Palestinian construction companies and contractors to operate in Israel, expanding access to the Israeli market from the current situation in which only Palestinian day laborers are allowed into Israel to work for Israeli companies.Some have criticized Kahlon for meeting with Bishara, a man with a controversial past. Bishara headed Arab Bank’s operations on the West Bank during part of the second intifada, which lasted from 2000 to 2005. On September 11, 2014 in the US during the first civil trial of a bank under the US’s Anti-Terrorism Act, Bishara was questioned regarding his role in transferring funds to families of suicide terrorists and to Osama Hamdan, high-ranking Hamas member who resided in Lebanon.Bishara was never charged. However, the allegations surrounding his role at Arab Bank during the second intifada illustrate the difficulties of cooperation between Israelis and Palestinians. Nearly all high-ranking members of Fatah have in the past been part of the Palestinian struggle, which includes violent acts of terrorism. Indeed, it is nearly impossible to succeed as a Palestinian politician without having the requisite credentials as a member of “the struggle.”Nevertheless, we believe initiatives like the ones being advanced by Kahlon are the only way to achieve economic stability for Palestinians. Perhaps improvement in Palestinians’ socioeconomic conditions will lead, eventually, to a more conducive environment for dialogue and negotiations.Merkel and Herzog are right. Implementation of a twostate solution right now is not feasible. Israel needs to turn to practical initiatives that improve Palestinians’ lives and fosters an atmosphere of trust and cooperation.