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.”

Advocates for engaging Hamas often argue that if the group is given a stake in the creation of an independent Palestine by being included in peace negotiations, it will moderate its positions. This co-optation argument is based on the misguided assumption that Hamas is a pragmatic nationalistic movement, motivated primarily by calculations of how to gain power.

However, Hamas is ideologically motivated, and misunderstanding its worldview is damaging. The growing Islamification of Gaza is only one example of Hamas' persistent allegiance to its ideological underpinnings, which it has shown no signs of abandoning. Hamas' ideology is rooted in the philosophy of its parent movement, the Muslim Brotherhood.

Hamas' actions must be understood in the proper context. Its lauded cease-fires with Israel are not a sign of political moderation, but rather calculated moves of self-interest. It has been deterred since the Gaza conflict. As recently as April 2008, Hamas' top official, Khaled Meshal, articulated Hamas' approach when he expressed his opinion about a temporary truce, or tahadiyeh, saying, "Hamas and the other resistance factions will use the tahadiyeh to grow stronger both in terms of weapons and training, and so the people will recover and prepare for the next round of resistance."

Moreover, Hamas feigns compromise on peace while maintaining its ideological consistency. Hamas has been given a great deal of credit - by former U.S. president Jimmy Carter, among others - for its promises to accept a final-status decision as long as the Palestinian people express support in a referendum. After meeting with Hamas leaders, including Meshal, in Damascus last year, Carter returned to Jerusalem touting a breakthrough. Meshal, however, publicly contradicted Carter within a few hours - making clear that a referendum on peace must include all Palestinians in the world, not just those living in the West Bank and Gaza. This unworkable proposition was coupled with his other condition that he knows Israel cannot accept - all Palestinians worldwide will retain their "full right of return" to Israel. Palestinian Authority Foreign Minister Riad Malki summed up the situation saying, "Hamas offered nothing to President Carter."

Moreover, Hamas has persistently refused to accede to the consistent demand of Egyptian intelligence head Gen. Omar Suleiman that it adhere to past Israeli-Palestinian agreements.

Clearly, Hamas' ideological rigidity greatly outweighs its pragmatism and political flexibility. If Hamas is included without committing, however grudgingly, to the cause of coexistence, it is unlikely to make the subsequent hard choices required by negotiations. In short, Hamas is poised to play the role of spoiler from the inside and not just from the outside.

This is not just due to its positions on peace and institution-building, but also its contemptuous attitude toward unity with Fatah. Hamas views Fatah's progress with disdain and wants to undermine U.S.-led efforts to train and equip the Palestinian Security Services. The U.S. has aided the Palestinian Authority (PA) in professionalizing its security force. Along with Israel, the PA has brought calm to Palestinian cities marred by chaos and drastically reduced the number of Israelis killed in attacks originating in the West Bank, from 410 several years ago to one this year. Hamas has vowed to remove the current PA government, which international bodies estimate is achieving 7 percent economic growth. In short, the steep price of internal Palestinian political cohesion is likely to be the crippling of nascent Palestinian institutions, as well as those boldly proposed by PA Prime Minister Salam Fayyad.

Furthermore, unconditional engagement with Hamas bears a key risk. If Hamas is engaged without having modified its program, Palestinians who stuck out their necks for a two-state solution would be branded as quislings. Hamas would be rewarded, and Abbas would be crushed. Bringing in Hamas will not give peace a chance; it will likely undo and discredit peacemaking and set a dangerous precedent for the entire region.

Yet keeping Hamas outside of negotiations requires a serious attempt to provide an alternative. This can be best accomplished by ensuring that its more moderate competitors actually do deliver. To build hope and a sense of possibility - which is the antidote to the frustration and hopelessness that Hamas exploits - there must be a peace process that has real promise. Moreover, there must be a day-to-day reality that reflects concrete positive changes. There is presently some evidence of this change, as Hamas is steadily losing public support. Even the slight spike in support for Hamas after the Gaza war has proved ephemeral. Rather, Hamas' decline has been unmistakable. Surveys conducted by the Palestinian Center for Policy and Survey Research, led by Khalil Shikaki, found that current Palestinian support for Hamas stands at 28 percent, compared to 44 percent for Fatah. In fact, Hamas has not polled better than Fatah since June 2006.

Ultimately, successful engagement must be predicated upon common interests and goals. Therefore, empowering the PA - and not engaging Hamas - should remain at the heart of a U.S.-led Israeli-Palestinian strategy.

As Israeli Prime Minister Benjamin Netanyahu recently passed his first 100 days in office, there are early signs that the Israeli leader has evolved since he held the post a decade ago.

This could mean - on the Israeli side at least - a real commitment to a durable peace.

During Netanyahu's premiership of Israel in the 1990s, he was viewed inside and outside Israel as playing to his conservative base at the expense of the rest of the country. While he did reach some interim agreements with the Palestinians, they were undone - at least in part - because he sought to placate his base. He lost re-election and for the most part proceeded to wander in the political wilderness.

In his return to the political forefront, Netanyahu, like the rest of the country, is unfailingly consistent in his demands that Iran not gain a nuclear weapon.

But on the Palestinian issue, he has changed - in both substance and tone. Unlike in the 1990s, Netanyahu has added the Labor party, which is not part of the conservative bloc and has been more open to discussing a two-state solution, to his coalition. In a speech in mid-June, Netanyahu explicitly endorsed a two-state solution, something he had opposed all his life.

Netanyahu's poll numbers shot up - and have stayed high ever since.

Some may say Netanyahu is governed by calculation more than conviction. Yet a little-noticed speech by Netanyahu in late July suggests a genuine shift in his thinking.

The annual speech given by a premier to Israel's National Defense College graduates is traditionally devoted to policy, not sound-bites. It was at this venue in 1993 that Yitzhak Rabin - a Netanyahu rival - explained how the Middle East changed dramatically after the end of the Cold War and first Gulf War, requiring Israel to "change [its] thinking patterns" about the prospects of peace.

That speech, more than any other of the time, presaged Rabin's secret road to the Oslo accord.

In Netanyahu's speech, the premier referred directly to the Palestinians, saying, "there is a struggle here, as in other parts of the world, with dark, radical forces ... I say that our real test, here, with the Palestinian Authority, is whether they can move closer in Dubai's direction, or whether they will retreat in Gaza's direction." He added, "If there is one mission that we are partner to, it is to ensure that the forces of moderation, of progress, prosperity and peace will win this struggle."

It is significant that Netanyahu now equates moderates with the Palestinian Authority and realizes Israeli responsibility for broadening the moderate base at the expense of Hamas extremists.

He did not speak this way in the past. Then, the onus was entirely on the Palestinians. Then, he would have relentlessly seized on militant statements by non-Hamas factions. Not now.

Meeting with him during my recent trip to the Mideast, one senses that the man sees more shades of gray today than he did in the past.

Netanyahu's evolution goes hand-in-hand with economic gains in the West Bank, which are further setting back Hamas and bolstering the Palestinian Authority. At this time of global economic recession, the International Monetary Fund says that the West Bank is growing at 7%. In my travels, the difference is clear: West Bank cities are no longer chaotic.

At the same time, Israeli security forces have been re-engaging with their Palestinian counterparts. As a top Israeli security official said recently about the Palestinian security officials, "They have stopped lying to us."

If there is Palestinian leadership on the other side willing to reject Hamas and walk a responsible path, the new Netanhayu finally looks poised to start walking down the road toward peace. Though the path would be rocky, it would be both momentous and profoundly ironic if a second Netanyahu tenure brings to fruition the Rabin peace legacy.

The White House publicly welcomed Israeli Prime Minister Benjamin Netanyahu's speech yesterday giving qualified support to a two-state solution with the Palestinians. Nonetheless, there remains a gap between Mr. Netanyahu and the Obama administration over the expansion of settlements. Fortunately, there is a way to bridge that gap.

The issue of settlements highlights broad philosophical differences about how to approach Arab-Israeli peace. Neoconservatives such as Norman Podhoretz have favored a hands-off approach. In contrast, foreign-policy "realists," including Zbigniew Brzezinski and Brent Scowcroft, favor imposing a peace plan.

The problem with the neoconservative approach is that it assumes the status quo can be sustained. The problem with the realist approach is that it assumes the status quo can be instantly transformed. Neither approach can be applied to a complex reality on the ground.

It is foolish to believe that Israel can continue to build settlements for decades without considering the impact that has on the lives of the Palestinians. It is also implausible that successive Israeli governments will view the settler population as mere bargaining chips in a final peace agreement. One cannot disregard the needs of either the Palestinians or of the Israelis.

Israel has been unable to freeze settlement construction since the enterprise began in 1968, and it is hard to see how it could do so now. How would the government justify the new policy to its voters?

The only way to deal with the settlement issue is to render it moot by widening it to peacemaking and heading straight into the final negotiations on territory.

Those negotiations are hung up on four issues: the rights of refugees, control of Jerusalem, security and settlements. The first two are impossible to solve when neither side has much trust in the other. The third has become more complex since Israel withdrew from the Gaza Strip in 2005 and was subsequently barraged with over 3,000 rockets. Ironically, then, the issue with the narrowest gap between Israelis and Palestinians is land.

Last year, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas discussed the possibility of a land swap between the Palestinian territories and Israel. Mr. Olmert suggested retaining 6.5% of the West Bank in return for equivalent land inside Israel. Mr. Abbas thought the figure should be approximately 2%. The difference is bridgeable. For example, three quarters of all Israeli settlers live in less than 4.5% of the West Bank, largely adjacent to the pre-1967 boundaries. This land could be swapped for an equal amount of land inside Israel.

There are three distinct advantages to focusing the negotiations on territory now. First, it allows the Palestinian Authority to tell its people that it has obtained the equivalent of 100% of the land to be part of a contiguous Palestinian state. As such, negotiations and not Hamas terrorism will be vindicated. Second, Israelis will have something to gain and not just give. Until now, no Israeli leader has succeeded in legally annexing a single settler, let alone a large majority of them. So give a large majority of the settlers who live in the major blocs a stake in being part of the solution rather than part of the problem. They would have their legal status normalized as part of Israel. Settlements and security would be decoupled. The Israeli army would not leave until the Palestinian security services demonstrated an ability to root out terror. Finally, after many decades, the settlements issue would no longer be a thorn in U.S.-Israel relations.

This approach alone will not guarantee successful resolution of the Jerusalem and refugee issues. Yet after success on land they will have to be addressed. Over time, Israel will need to make concessions in Jerusalem, and the Palestinians will need to concede that refugees can only return to the Palestinian state and not to Israel.

Stalemate is never a durable strategy, but a proactive approach could shatter old myths and create a better and more permanent reality for both sides.

For the past several years, Palestinian moderates often have been on the defensive amid the growth of Hamas (the Islamist Resistance Movement). The re-emergence of Palestinian moderates is key, as Israel and the Palestinians now try to restore their shattered partnership and head toward a Middle East peace meeting in November in Washington.

Ironically, the return of the moderates is facilitated by the rejectionist group's overreach. Hamas' takeover of Gaza in June is allowing the Palestinian Authority in the West Bank to be unshackled from Hamas radicalism. It is too soon, perhaps, to pronounce the eclipse of Hamas. But the moderates are starting to regain their footing.

The stakes are high. If the moderates fail, the Islamization of Gaza that is underway will likely, over time, spread to the West Bank. Transforming the Israeli-Palestinian dispute from a nationalist to a religious conflict would be catastrophic, making any peaceful resolution impossible.

Hamas' violent takeover of Gaza shocked Palestinians, and according to polls, many Palestinians see the move as undermining Hamas' credibility. According to a survey by the Nablus-based An-Najah University, 55.6 percent of Palestinians believe the Hamas seizure of Gaza on June 14 was a "coup." Furthermore, by 63.4 percent to 26.2 percent, the Palestinians do not believe Hamas is capable of managing the affairs of Gaza.

A separate poll by the Jerusalem Media Communication Center recently confirmed this finding, saying that the Palestinian Authority is governing the West Bank better than Hamas is ruling Gaza.

Fortunately for the moderates, there is a new Palestinian premier in the West Bank. Salaam Fayyad is a committed Palestinian nationalist who has demonstrated economic success amid trying conditions. Appointed by President Mahmoud Abbas, Fayyad has the necessary credentials: He holds a doctorate in economics and worked for the International Monetary Fund and the World Bank for 14 years. From 2002 to 2005, Fayyad was the authority's finance minister, and the post earned him a reputation for fighting corruption, including breaking up cartels and introducing fiscal transparency.

Fayyad and the authority still have to overcome many challenges if the West Bank is to be governed better than Gaza, thus vindicating moderation in the eyes of Palestinians. Fayyad must use his relationship with Fatah - the mainstay of the Palestinian nationalist movement - to carry out his efforts. The technocratic Fayyad needs Fatah's support to achieve his goals, while Fatah seeks identification with a man whose distance from the party could improve its corrupt image.

Another major challenge for the Palestinian Authority is security. One can assume that Hamas has enough sympathizers in the West Bank to launch terror attacks in an effort to embarrass and undermine the authority. With that in mind, Fayyad summoned 800 imams from West Bank mosques into his office and boldly insisted that they remove all political messages from their sermons. Moreover, an authority cabinet minister just announced that the authority will close 103 charities suspected to be financial conduits for Hamas.

Last week marked the first time in years that Israeli and Palestinian West Bank commanders on all sides sat together to discuss restarting security cooperation. Geographic zones of cooperation will enable Israel to more rapidly lift checkpoints, thereby fostering economic trade. Lt. Gen. Keith Dayton, the U.S. security envoy, needs support if he is going to be helpful in rebuilding Palestinian security forces. But because of squabbles in Washington, Dayton - who has been in the region for almost 10 months - only started receiving money for his mission in the past few days.

Given the stakes, the differences in Washington should end. The security aid just dispatched should be coupled by housing and development assistance, thereby supporting Fayyad's reforms. In contrast, Hamas senior official Mahmoud Zahar reportedly has boasted that he has received $400 million from Qatar, and Palestinians, among others, have asserted that an equal amount has come from Iran.

A final challenge is creating diplomatic momentum. If handled correctly, the November U.S.-backed peace meeting can galvanize the parties to make progress. But if there are unrealistically high expectations that the parties can resolve the most searing problems of their conflict - including Jerusalem - by the November parley, this could tragically trample what-ever moves the parties do make.

After many years of terror and violence, the story is not that the sides would have resolved their conflict by November, but rather that an effort is under way to restore the shattered Israeli-Palestinian partnership. The glue for a revived partnership is the understanding that the alternative is Hamas, which threatens Israelis and Palestinians alike. It is essential that moderates, not radicals, be more determined this time to chart history's course.