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.”

There are many reasons to feel more pessimistic than optimistic about the possibility of any major breakthrough in the Israeli-Palestinian conflict this year. The inaction by the international community, especially the United States, over the past few years has made the situation more complicated, with increased violence and hardened public opinions on both sides.

In the aftermath of the Gaza war, Hamas' popularity has increased, both inside Palestine and in the wider Arab and Muslim world, with growing support among Palestinians for military resistance. Israel has shifted politically to the right, with broader acceptance of the "fifth column" theory, which views Palestinian citizens of Israel as a security threat.

Any talk of a peace process has negative connotations for both sides. For many Israelis, it raises fears that land returned to the Palestinians in the West Bank will eventually be used for launching rockets, as happened in Gaza. Similarly, for many Palestinians, the continuation of the peace process means endless talking without results as Israel continues to annex more Palestinian land for building or expanding settlements.

Internal political considerations add more problems to the mix. Hamas' political platform differs greatly from the Palestinian Liberation Organization's (PLO's) and Palestinian Authority's embrace of a two-state solution with an Israeli withdrawal to the 1967 borders. Instead, Hamas has suggested a long-term truce with Israel with no formal recognition. In Israel, the platform of the Likud party and Prime Minister-elect Benjamin Netanyahu, unlike those of the Kadima and Labor parties, does not accept the concept of "land for peace" and the establishment of an independent, viable Palestine. Instead Netanyahu is promoting a vague economic peace plan. Thus, any coalition or unity government, on either side, is likely to be unstable because of serious political differences between the parties involved. This decreases the probability that either side will be able to act on the terms of previously suggested end of conflict agreements.

There are no historical or charismatic leaders on either side to make such an agreement happen, and moderate leaders don't have enough power to build the consensus needed to make the necessary concessions. "Radicals" on both sides can continue to wreck any potential agreement and to feed each other's raison d'گtre. Many observers believe that time is running out for the two-state solution without any acceptable or practical alternative.

It has become apparent that Palestinians and Israelis cannot make any substantive progress on the core issues without persistent mediation by third parties, especially the US, Europe and key regional players. As witnessed in the recent past, during the absence of a functional mediator, different approaches were tried by both sides and failed, with catastrophic outcomes. They led to unilateralism, a resort to brute military force, a security doctrine based on the power of deterrence that gave rise to collective punishment, suicide bombings and the increased launching of rockets. Temporary arrangements are no longer enough. These have only been used to divert attention away from addressing the core issues, maintaining the status quo, and managing rather than resolving conflict.

Despite the current realities on the ground that have led to this pessimism, there is a small but fragile window of opportunity. The declared intention of the Obama administration to change American policies in the region, putting the Israeli-Palestinian conflict at the top of its agenda, has indicated that a more determined mediation role will be pursued. Recruiting George Mitchell, who is known for his conflict resolution skills, might indicate more neutral American mediation.

There are existing tools that Mitchell can utilize and build upon. The gap in popularity between Hamas and Fatah is narrow and fluctuates with events on the ground. The Palestinian Authority can still be a relevant peace partner with a functional technocratic government, regional and international support, and a reformed security establishment. The Arab Peace Initiative is still on the table and could be employed to compensate for the current weakness of the Palestinian political system, and could open the door for a regional security arrangement.

Sources on both sides have suggested that the outgoing Israeli prime minister, Ehud Olmert, and the Palestinian president, Mahmoud Abbas, made some breakthroughs in negotiations following Annapolis and that former US President Bill Clinton's parameters are still valid. The public mood on both sides can be changed and new elections can bring new political realities. Lately, Hamas has shown signs of pragmatism, and Egypt, Saudi Arabia and Turkey can still influence Hamas' decisions. Many believe that a right-wing Israeli government will be less resistance to American pressure.

It seems that the Obama administration also believes that issues in the region are interrelated and is adopting a comprehensive approach. It should not be forgotten that Syria and Israel reached a point of direct negotiation before the Gaza war and that, in the past, Netanyahu was close to reaching an agreement with Syria. It is also likely that the Lebanese-Israeli front will stay calm in the short term. Both situations have implications for progress on the Palestinian-Israeli front.

Obama's emphasis on international cooperation, respect for international law and humanitarian law, dialogue and diplomacy, consultation with America's friends, and on listening to the voice of progressives in the American Jewish community, might create an environment for sustainable results. For any progress to take place, nothing is more important than for people on both sides to feel security, dignity and hope.

The cost of missing this opportunity would be tragic for stability in the region, US interests, Israel's security, Palestinian national aspirations, ending state and non-state terrorism, and Obama's pragmatic approach.

Palestinian President Mahmoud Abbas deserves praise for his decision to take the case for peace directly to Israeli citizens by purchasing Hebrew-language newspaper ads explaining to them the benefits of accepting the 2002 Arab Peace Initiative. One would have expected that the historic peace offer extended to Israel by the 57 members of the Organization of the Islamic Conference would have been well received, but Israeli leaders have been reluctant to even discuss it. The reason for this is party due to the fact that Israeli leaders fear a backlash from the Israeli public, whose members remain skeptical and/or largely uniformed about the details of the offer. Abbas' attempt to reassure and inform Israelis is therefore welcome, especially since so very little has been done to promote the plan among average Israelis.

Abbas' initiative has generated some criticism in the Arab media, especially concerning the cost of the ads, with commentators arguing, for example, that the money would have been better spent if it were used to pay for a siege-breaking boat trip to Gaza. But while arguments such as these have merit, the benefits of peace are worth every penny of investment. In addition, Saudi Arabia and other supporters of the initiative can step in to cover the costs of the campaign and thereby deflect much of the criticism.

The ads, which are expected to run in newspapers in the United States and Europe, also come as a welcome counterbalance to the many negative campaigns there. Funded by pro-Israel organizations, these campaigns have included advertisements in US subway stations showing images of Palestinian children bearing guns paired with slogans such as "this child will grow up to be a terrorist" and "Israel seeks a partner for peace" or Palestine, "a society that targets Israel ... because Israel shares America's values." Whereas negative messages such as these have the sole purpose of demonizing the other and obstructing a peace deal, Abbas' ads strike a positive tone and serve to facilitate dialogue and understanding.

The fact that the Israelis and their American allies have rejected the Arab Peace Initiative is an indication that they fail to comprehend what the offer means in terms of security, trade, investment and innumerable other benefits for Israel. Through campaigns such as the one launched by Abbas, Arabs can help Israelis to envision a better future for themselves.

Hamas leader Khaled Meshaal made a full set of rounds in Beirut on Monday, pressing the proverbial flesh and telling this country's leadership much of what it wanted to hear. Unfortunately, he also engaged in a little wishful thinking and/or expected his interlocutors to do the same. Given Meshaal's reputation for diplomatic and political savvy, it was disappointing to hear him engage in a brand of public relations with which the Arab world is all too familiar.

He all but ruled out the possibility, for example, that the continuing power struggle between his party and Palestinian President Mahmoud Abbas' Fatah faction would spill over into refugee camps in Lebanon - even though it is hard to see how anyone could reverse such a trend if it gathered any momentum at all. He also expressed a conspicuous lack of concern at the intractability of some of the issues dividing Palestine's two main parties. In addition, while he offered rhetorical support for efforts to disarm Palestinian militias with considerable potential to destabilize Lebanon, he tethered this to so many ambitious conditions as to make it valueless.

Despite some very serious problems, particularly the plight of tens of thousands of refugees displaced by the summer 2007 battles with the Fatah al-Islam group at the Nahr al-Bared camp, Lebanese-Palestinian dialogue has made great strides in recent years. Increasing numbers of Lebanese officials have begun to realize that extending decent treatment to the refugee community does not have to be inconsistent with their mantra of "no naturalization." At the same time, more and more Palestinian representatives have come to understand and accept their Lebanese hosts' insecurities about anything that might upset the famously delicate sectarian balance in this country.

Despite these improvements, there is still a dire shortage of straight talk. Beirut is running late on its pledge to reconstruct Nahr al-Bared, in part at least because donor countries have not honored their own commitments. And the Palestinians have made little progress in reducing lawlessness in the camps, in part at least because of the very tensions between Fatah and Hamas that Meshaal sought to play down.

A comprehensive overhaul of the status of Palestinians in Lebanon is in fact required, and steps have been taken toward that end. The Lebanese cannot be asked, however, to complete overnight what a mostly indifferent Arab world has studiously ignored for more than six decades.

US Secretary of State Condoleezza Rice unwittingly demonstrated much of what ails the Palestinian-Israeli peace process on Tuesday. In a speech to the American Jewish Committee in Washington, she proffered a laundry list of reasons why time is running out for a two-state solution - and each of them is a direct result of failed US policy.

Perhaps the most obvious example of this was her contention that Hamas and the Iranian support it enjoys are potentially insurmountable obstacles to peace. For all its controversial activities and positions, the same group has repeatedly issued offers of a cease-fire which Israel has summarily rejected, or tacitly accepted and then undermined via assassination and other forms of aggression. It remains to be seen whether the latest overture, brokered by Egypt and also endorsed by several other Palestinian resistance organizations, will be brushed aside or violated, but the Israelis' track record on this score is not encouraging.

Rice likes to peddle Palestinian infighting as an impediment to the peace process, but she and her boss, President George W. Bush, have exacerbated differences between Hamas and President Mahmoud Abbas' Fatah faction at every turn. They have colluded in (among other things) the Israeli military's destruction of Palestinian infrastructure, its strangulation of the economy in the Occupied West Bank, its siege of the Gaza Strip, and its incessant attacks and other provocations in both regions. Each of these has served to undermine Abbas, who has thrown his lot in with the Americans and tried to convince his people that they can believe Washington is serious about wanting them to have a state. Each of these transgressions has also served to bolster Hamas' domestic position. In fact, the only occasion on which Bush has not completely abandoned Abbas came when Hamas defeated Fatah in the 2006 elections and the Americans joined the Israelis in an ugly campaign aimed at negating the wishes of the Palestinian people.

The White House has also abetted the Israelis in a strategy of shifting goalposts, making it ever impossible for the "next stage" of the peace process to get under way. Abbas' police, for instance, are expected to prevent resistance activities by militants despite continuing Israeli attacks that make negotiations look like a Trojan horse and open him to accusations of naivety - or worse.

Rice is right: Talks as a means of ending the occupation are losing credibility, especially among younger Palestinians. But this trend will only accelerate unless the Bush administration finally seeks - and accepts - an honest reason as to why this is so.