Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

The Israeli-controlled Erez crossing point into the Gaza Strip looks is like an airport terminal to nowhere. After showing my passport and press pass, I enter the glass, air-conditioned and almost completely empty building and walk down a long corridor at the end of which, instead of a waiting airplane, there's a room with seemingly no exit. Then a metal door mysteriously opens, and I leave Israel. Outside there are no customers officers, no passport control, no port authority, just long caged passageways and a huge empty lot with a couple of taxis baking in the summer sun. This is the quietest border crossing in the Middle East.

The Gaza Strip, which is home to about 1.4 million people, is almost fifty day into an Israeli siege. Almost all shipments except for basic humanitarian supplies are barred from entering, and almost nothing comes out. And no one but journalists, members of international organizations like the United Nations, and a tiny number of Palestinians from special professions are allowed to come or go.

The Israelis have sealed the crossing in part as a response to the rockets that are regularly launched from Gaza into Israeli towns in the Negev, occasionally killing civilians, and often damaging homes. But the siege is also the key element of an Israeli and American strategy to isolate Hamas, the Palestinian militant group and political party which after a few short days of internecine Palestinian warfare in June, took control of Gaza from its political rival, Fatah. The hope is that by letting Gaza simmer in its own juices, average Palestinians will turn away from Hamas, which has never recognized Israel, and towards Fatah, which is willing to restart the peace process. Unfortunately, the siege of Gaza appears to be having the opposite effect.

The damage done to the Gazan economy has in fact been catastrophic. Unemployment is up to about 87 percent . About 79 percent of the population is receiving food from the United Nations. Nasser El Helou, a spokesman for the Chamber of Commerce and a hotel owner, estimated that the Gazan economy -- which is based on light manufacturing, agricultural exports, and the wages brought home by day laborers in Israel -- would collapse within two weeks if the siege continues. But he was also clear about whom he blamed for the situation. "If we are free we should control our own borders," he said. "But we do not control our borders, so the full responsibility is on the Israeli side. "

I spent Thursday talking to other business owners -- pragmatic, apolitical people -- who uniformly blamed Israel, the United States and Fatah for the destruction of the Gazan economy. In fact, after years of living with the gangsterism and warlordism that plagued Gaza while it was run by Fatah officials, most are happy with the Hamas takeover. "I blame Fatah and Abu Mazen because they made us live in garbage," said the owner of the largest factory in Gaza, which makes cookies and ice cream, but which is now almost totally shut. "They never wanted to see anyone else prosper. They just wanted to live on top, through corruption."

The business owners pointed out that not only joblessness and poverty pushing average people towards extremism, but they also said that the Israeli embargo was destroying the only class of Palestinians who still looked favorably towards Israel: them. Most of them speak Hebrew, have -- or used to have -- Israeli clients, partners, and friends, and most had once looked forward to the day when there would be no trade barriers at all for an independent Palestine at peace with Israel. "The majority of Gazans do not like Israel'" said Amassi Ghazi, the chairman of a company that imports building materials. "Until now only the private sector had good relations with Israel. So please open the border before you loose the last sector, and all Gaza will be enemies of Israel."

Has the Arab League finally broken its taboo on ties with Israel by sending a delegation to Jerusalem? Depends who you ask. The Israeli government has declared Wednesday's visit by the foreign ministers of Egypt and Jordan a historic landmark on the road toward acceptance of Israel by the Arab world. "In the past, the Arab League has opposed dialogue, normalization and any contact with Israel, and this is the first time the Arab League has authorized a delegation to visit Israel," said Israeli Foreign Ministry spokesman Mark Regev. Not so fast, say the visitors. The Egyptian government released a statement on Saturday saying that the foreign ministers are not, in fact, representing the Arab League in Jerusalem, but only their own countries — Egypt and Jordan are the only Arab League countries that have full diplomatic relations with Israel, and the League's position is that normalization of ties can only occur when Israel agrees to withdraw to its 1967 borders.

So what are Egypt's Foreign Minister Ahmed Abul Gheit and his Jordanian counterpart, Abdulelah al-Khatib doing in Jerusalem? Well, the Arab League did, in fact, ask Jordan and Egypt to formally present its peace proposals to Israel. And his government's last-minute case of stage fright didn't stop Abul Gheit from going through the motions of the day's protocol and pleasantries. But the Egyptian identity crisis may be a sign that Arab enthusiasm for a renewal of peace talks with Israel is fading even in those countries that once supported it.

The Arab peace initiative began in 2002 as a Saudi proposal that called for all Arab countries to normalize relations with Israel in return for a full Israeli withdrawal from territories it has occupied since 1967, the creation of a Palestinian state, and a fair solution to the Palestinian refugee problem. But Israel reacted coolly to the idea at the time, and with Washington showing no greater enthusiasm for pressing the issue, little more was heard of it. But following the collapse of the Hamas-Fatah Palestinian unity government, and with a greater sense of urgency over the need to rally Arab moderates against Iran and its allies, Israeli Prime Minister Ehud Olmert has begun expressing interest in the Arab peace initiative, and in restarting dialogue with the Palestinians.

But Arab countries are concerned that Olmert is more interested in the symbolic value of a peace process rather than in the substance of concluding it. Burdened by rock-bottom popularity thanks to his mishandling of last summer's war in Lebanon, Olmert is hoping that the Israeli public will be wary of tossing out a leader engaged in peace negotiations. And even if he were serious about concluding a deal, his domestic political weakness would make it difficult for him to lead the country through the wrenching changes that peace would require. Thus Olmert's announcement Wednesday that he intends to reach an agreement with Palestinian President Mahmoud Abbas over the principles for resolving the easy issues — the characteristics of the Palestinian state, its economy, and the customs arrangement it will have with Israel — and postpone addressing the difficult issues such where to draw the border between Israel and Palestine, the status of Jerusalem, and the fate of the refugees. Olmert's plan, in fact, is the reverse of the Arab initiative, which attempts to jump straight to the heart of the matter.

The problem with Olmert's approach is that the Arab world has run out of patience. It is well aware that the Oslo process floundered, at the end, not over customs arrangements and the Palestinian economy, but over borders, Jerusalem and refugees, and those issues are the ones that must be resolved if the process is to be about anything more than marking time. And the Arab League regimes don't have much time to lose: Between the radicalizing impact on their own populations of the ongoing Israeli-Palestinian conflict and also the war in Iraq; the rising power of Iran; and growing tension between Sunni and Shi'ite Muslims, the Middle East is ready to explode. Countries that were once ready to bury the hatchet with Israel are now looking over their shoulders at their angry citizens, increasing numbers of whom see more to be gained by standing up to America and Israel than by trying to revive the peace process. Saudi Arabia, for example, which drafted the Arab initiative, is now warning that peace between Israel and the Palestinians is impossible unless Israel also negotiates with Hamas.

The Saudi warning is a sign that those in Fatah such as President Mahmoud Abbas who are closest to the U.S. and Israel have lost support not only among Palestinians, but among Arab countries as well. Not coincidentally, Saudi Arabia is also the country with perhaps the biggest jihadi problem in the region — a significant proportion of suicide bombers in Iraq are reported to be Saudi citizens.

Likewise, time may have run out for peace between Israel and Syria. Since the end of last year, Syria has been repeatedly calling for a resumption of the peace talks of the late 1990s premised on Israel returning the Syrian Golan Heights, captured in 1967. But while Olmert has largely evaded the overtures — questioning their sincerity, quibbling about who if anyone should mediate — Syria may have given up. Last week, the Israeli press was filled with rumors that Iran gave Syria $1 billion to purchase weapons in return for abandoning peace overtures towards Israel.

The Arab League country most eager to get the peace process back on track is Jordan. Even as its foreign minister talked peace in Jerusalem on Wednesday, its head of state, King Abdullah II, was visiting Washington to seek U.S. support for the Arab initiative. Jordan certainly has more to lose than any of its Arab League partners if peace fails. The pro-U.S. Hashemite Kingdom may have a peace treaty with Israel, but the majority of its population is Palestinian, and it is quickly filling with Iraqi refugees growing angrier by the day. Jordan's enthusiasm for peace, then, may be less a sign of hope, as much as a sign of desperation.

It sounded very inspiring. In a major speech last night out of the White House, U.S. President George W. Bush called for a revival of peace talks between Israelis and Palestinians, and proposed that Israel and some Arab states hold a regional peace conference this fall. "The international community must rise to the moment," he said. "The world can do more to build the conditions for peace." All this from an Administration that was once wary of repeating the patterns of previous presidencies by devoting time and prestige to solving a conflict that refused to be solved.

The difference now is that the Bush Administration, with just 18 months left in office, is in dire need of some policy victories in the Middle East. In particular, it must show its Arab allies, such as Saudi Arabia — whose help Washington needs to stabilize Iraq — that the U.S. is willing to put its weight behind the peace process. But in looking to score points in the Middle East, Bush is likely to be as disappointed as his predecessors. That's because the core of his strategy to bolster moderate Arab states and moderate Palestinians while shunning the region's radicals is a case of too little too late. The sad reality is that the moderates of the Arab world have little to offer Israel and less and less power to promote peace in the Middle East.

Under the new Bush plans, Israel would begin peace talks with the Palestinians on the condition that the Palestinian Authority (PA) crack down on terrorism and corruption. This is understandable but unrealistic. The Fatah leadership that has controlled the PA since the 1993 Oslo Accords has been unable or unwilling to curb Palestinian militants. A key reason terrorist acts continue is that many Palestinians simply don't see the benefits of giving up armed struggle. With no end in sight to the growth of Israelis settlements and security barriers in the occupied West Bank, most Palestinians have lost faith in the ability of Fatah's notoriously corrupt leadership to lead them to the promised land of a Palestinian state, and have instead put their trust in Fatah's rival, the puritanical militants of Hamas.

Even though Hamas is the democratically elected representative of the Palestinian people, Bush's plans continue to embrace Fatah's failed leaders, and to exclude Hamas from the proposed peace talks. So whatever agreements the peace negotiations produce are unlikely to have any legitimacy on the ground. And while the Bush Administration is doing what it can to bolster the legitimacy of Palestinian President Mahmoud Abbas (the head of Fatah), this could also backfire. The $190 million package of U.S. aid Bush proposes to send to the Palestinians includes money to bolster Fatah-controlled security services — effectively arming Fatah thugs to fight Hamas thugs. This is a recipe for renewed Palestinian civil war, not nationhood. And if Hamas' recent victory over Fatah in Gaza is any guide, it's a civil war that America's allies might not win.

Just as Bush would exclude Hamas from Palestinian-Israeli peace talks, his call for a regional peace conference notably excludes countries that are hostile to Israel, especially Syria and Iran. A peace conference that doesn't involve enemies sitting down across from each other isn't much of a peace conference. The countries that might show up, such as Saudi Arabia, don't border Israel and have never fired a shot in anger at the Jewish state. (The Saudis just try to ignore Israel.) The Bush Administration merely wants these countries to take some initial steps toward recognizing Israel, such as sending heavyweight cabinet-level ministers to the meetings. But many of America's Arab allies are autocratic regimes whose populations are becoming increasingly anti-American and anti-Israeli, thanks to the American invasion of Iraq and the Israeli occupation of Palestinian territories. These governments are unlikely to make substantial gestures toward Israel without significant progress toward a Palestinian state, lest they incur the growing wrath of their fast-radicalizing subjects.

The reality is Israel's safety will never be assured, and a Palestinian state will never be secured until the U.S. and Israel begin some level of cooperation with their enemies, or until they defeat them. And if dealing with the devil seems naïve and impractical, it's worth remembering that victory in the Middle East is just as elusive as peace.

Imposing order on the rival gunmen of Hamas and Fatah would have been a tall order for a leader far stronger than Palestinian Interior Minister Hani Kawasmeh. Kawasmeh, a career civil servant rather than a tough-guy commander of either of the two main Palestinian factions, was appointed to the position as a compromise candidate after Hamas and Fatah brokered their unity government in Mecca earlier this year. And it came as no surprise when he announced his resignation on Monday, amid a fierce resurgence of fighting between the two camps that has claimed at least eight lives since Sunday. Absent a power base of his own, Kawasmeh's prospects for integrating the fighting forces of the rival factions into the Palestinian Authority's security forces were always slim. But his resignation may nonetheless portend the collapse of the unity government, and the onset of a full-blown Palestinian civil war.

Kawasmeh's failure results in part from the refusal of Fatah hardliners to cede power within the Palestinian Authority to Hamas, despite the fact that the latter won last year's Palestinian parliamentary elections. Even after their leaders agreed to a power sharing arrangement in Mecca last fall, many Fatah officials have done their best to make it fail — perhaps encouraged by the U.S., which has refused to have any relations with a Palestinian government that includes Hamas, and has made isolating the Islamist ruling party a focus of its Middle East policy.

But Hamas has its own hard-liners, who have plenty to gain from the collapse of the unity government. One of the main reasons for sharing power with Fatah — to circumvent the U.S.-led financial siege of the Hamas-led Palestinian Authority — has turned out to be moot. The U.S. and the EU continue to refuse to give direct aid to any Palestinian government with Hamas in it, despite the unity government. A narrower Hamas government would also be in a better position to prevent the already fragile Arab League initiative offering Israel a comprehensive peace agreement in exchange for a returns to 1967 borders.

Despite frantic efforts by the leaders of both parties to restore calm, fighting raged on the streets of Gaza on Monday. Masked gunmen have reportedly taken up positions at major buildings and intersections all over Gaza city, and Fatah officials predict the collapse of the government in a matter of days.

The chaos in Gaza is a disaster for a Palestinian population suffering the stress of more than a year of sanctions, but it also bodes badly for Israel. Qassam rocket attacks from Gaza into Israel have become an almost daily routine since March, when Hamas ended its unilateral cease-fire. If the Palestinian government collapses, Israel may soon resume strikes against militant leaders and rocket cells, which in turn will likely escalate the attacks. Israeli security officials have admitted there is no military solution to the rockets, but they may be drawn further into the conflict if Gaza militants begin using longer range Katyusha rockets, of the kind used by Hizballah from Lebanon last summer, and which Israel fears may have been smuggled into Gaza.

The area evacuated by Israel in 2005 is well on its way to becoming a kind of seaside Falluja, a safe haven and training ground for extremists of all kinds. Aid workers recently returned from Gaza describe a city breaking down into tribal and gang formations, much like Iraq. The fact that these groups can act with impunity is clear in the ongoing captivity of BBC journalist Alan Johnston, who was kidnapped in March, and has been held despite the fact that his release has been demanded by the top leadership of both Fatah and Hamas. Last week, Palestinian President Mahmhoud Abbas said that his security forces are aware of Johnston's location and the identity of his kidnappers, but have been unable to act on that information, ostensibly out of concern for Johnston's safety. Without a government in Gaza, near term prospects for Johnston's return will look even worse.