Two States in Palestine?

Abstract

Israelis and Palestinians have off loaded the costs of their conflict to outsiders and lack incentives for peace making. Massive subsidies for the Palestinians should be gradually withdrawn and Israel should pay rent for the settlements and other land it occupies. The rents will fund the Palestinian economy and compensation payments in lieu of the right of return. The Palestinian state will be demilitarized and neutral, and become viable with economic ties to Israel and with international aid. Two states will coexist along the 1967 green line and East Jerusalem will be part of “Jerusalem: one city, two capitals”. Peace making will be backed by the major international stakeholders and the agreement will be legitimized by the voters in both countries.