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.”

Watching Nancy Pelosi, John Boehner and other congressional leaders craft a stimulus package to calm the turbulent economy is like watching President Bush pursue his equally implausible and belated Middle East peace initiative. In each case, the challenges are so much larger than the means suddenly being brought to bear that you don't know whether to laugh or to cry.

Just as politicians are ill-suited to sort out the effects of a complex global credit crunch, Bush is a long shot to pull off a diplomatic triumph that has eluded a long line of outside negotiators. The stretches of peace that have come to the region have been created locally -- out of desperation -- not through grand designs whipped up in Washington or Geneva. That is likely to be the case this time, too.

Bush, Pelosi and the others are driven by the same political motivation: They need to be seen doing something about a deteriorating situation they don't really control. They hope that they will catch a wave and have their initiatives seem to have generated it. Bush hinted at this window-dressing factor in a discussion with reporters Jan. 15 in Saudi Arabia:

"The reason why you articulate a vision is to give people inside the Palestinian territories who don't want violence and who don't want to destroy Israel a chance to be for something."

Until recently, Bush did not pretend that diplomacy was his thing. Talk to foreign leaders and officials or U.S. diplomats who have observed Bush in negotiating sessions, and you get a picture of a president who disdains bargaining and the essence of give-and-take.

"He is certainly smart enough to do it," says one person who has worked with Bush in such situations. "He would always get the first point across. But when there was pushing back, he didn't follow up with the rest of the argument or proposal that had been prepared. He just seemed not to care enough to do it."

Bush encountered such pushback from the Saudis and other Gulf Arabs on his Middle East peace tour this month, according to a variety of diplomatic sources. Open skepticism greeted his appeals to "moderate" Arab states to provide the political and financial support that might enable Palestinian Authority President Mahmoud Abbas to move forward on peace.

"We are not going to sink a lot of money into West Bank and Gaza projects that will just be blown up by the Israelis in a few months when things go wrong again," one Arab leader reportedly said to Bush. The president was also told that Gulf countries want Israeli Prime Minister Ehud Olmert to agree in writing to the borders of a Palestinian state before they can fully support the Bush effort.

That is a tall order for Bush to deliver. And his strategy of gathering friendly Arab states to support peace with Israel and to confront Iran was dealt a new setback last week when Hamas operatives blew open the wall that separates the Gaza Strip and Egypt.

The blast also reverberated through the Arab states that Bush has been courting, especially Egypt. In Damascus, Hamas political leader Khaled Meshal called on Egypt to stop cooperating with Israel in policing the Gaza frontier and to join the Palestinians in establishing new international controls there.

"I am addressing all the Arabs: Don't say it as an excuse that there is an international agreement" regulating the border, Meshal said. Past Egyptian governments had the courage to defy international pressure, he noted in a clear effort to shame Cairo into action.

Hamas is in fact calling the great Arab bluff that has prevailed for more than half a century. Arab leaders profess to harbor nothing but feelings of brotherhood and unity for the Palestinians and their cause. But fear actually drives their policies -- fear of the radicalism of Palestinian politics, of the relatively high levels of education and sophistication of the refugee populations scattered in Arab lands in 1948 and then again in 1967, and of public opinion in their own countries.

Arab leaders were telling Bush in their pushback -- albeit in code -- that the Palestinian refugees and their plight are the creation and responsibility of the West. Arab states will not take financial, social or political responsibility for the Palestinians just to help out Bush, Abbas, Israel -- or even the Palestinians.

Bush will return to the region in May to take part in Israel's 60th anniversary celebrations and perhaps to reinvigorate his peace initiative. He will need to. At the moment, it is on life support.

Hopes for an Israeli-Palestinian peace deal that will isolate the Hamas radicals who control the Gaza Strip have brightened measurably in recent days, according to European officials visiting here. The real news is that the Europeans report this possible outcome without a frown.

Their cautious but clear optimism is based primarily on movement in the private preparatory talks between Israeli Prime Minister Ehud Olmert and Palestinian leader Mahmoud Abbas, who are both so weakened politically that they may have no place to go but toward peace.

There is no certainty that the November conference the Bush administration hopes to sponsor will work or even happen. In the Middle East, an unexpected day of atrocity or domestic political upheaval can cancel months of diplomatic groundbreaking. The safe bet is always the same: no peace now.

But the belated U.S. mediation in the Middle East led by Condi Rice does illuminate three long-term changes that have to be taken into account in judging whether the secretary of state can wring agreement on principles from Olmert and Abbas:

؟ The takeover of Gaza by Hamas has given Olmert, Abbas and the diplomatic "Quartet" of Russia, the United States, the European Union and the United Nations a common cause -- and general agreement on means. The goal of the November conference is an agreement that will gradually encourage the Palestinians in Gaza to desert Hamas and follow Abbas's reformed Palestinian Authority.

Abbas is said by diplomatic sources to be resigned to such an accord being his swan song as leader. He will be ready to step aside in a generational change that would accelerate if Israel then releases the popular imprisoned Fatah leader Marwan Barghouti, who is serving five life sentences for murders committed under his command.

Olmert's motivation for dealing is to stay, not to go. A peace accord is his best bet to reverse woefully low approval ratings sparked by the mishandled military campaign against Hezbollah in Lebanon last year. If he can get Abbas to acknowledge the inevitable -- to grant formally that Israel will have a decisive say in the administering of a "right of return" by Palestinian refugees to Israel -- Olmert could be the peace candidate in Israel's next elections.

؟ Europe's long-standing political and romantic fascination with Palestinian radicals and their cause has ebbed to its lowest point in four decades. The destruction wrought by suicide bombings and other terrorist acts in the second intifada, as well as Gaza's implosion after Israel's unilateral withdrawal, have contributed to a more equal rebalancing of European sentiment.

Arab officials are dismayed by the dramatic change that has occurred in France since Nicolas Sarkozy's election as president in May. Sarkozy has openly expressed his intent to offer Israel greater support internationally. He has also indicated that he will move away from the pro-Arab policy established by Charles de Gaulle in 1967 and pursued with vigor by Sarkozy's predecessor, Jacques Chirac.

But it is not only France. When Italian Prime Minister Romano Prodi visited Israel this summer, he made clear his coalition government's backing of the Quartet's initiative, which now features former British prime minister Tony Blair as a special envoy.

"We see exactly what you are doing," Egyptian President Hosni Mubarak told a European official recently in a dismissive manner, according to notes of the conversation taken by the official. "You will lose a lot in the Arab world."

؟ Mubarak's defiance points to a third, less positive, change: his entrenched immobility on peace with Israel, as well as on political change and on deepening social problems at home. Under Anwar Sadat, Egypt was a catalyst for peace and regional change. Now Egypt says it will come to the U.S.-sponsored conference in November in a completely passive mode. It will be there to support Saudi Arabia, not American peacemaking.

The Saudis at least seem to have a more activist approach. Foreign Minister Saud al-Faisal told reporters in New York on Wednesday that an Israeli "moratorium on the building of settlements" in the West Bank "will be a good signal to show a serious intent" to reach peace. He suggested it would enable Saudi Arabia to come to the conference.

U.S. encouragement of a meaningful moratorium by Israel now is a key step in rescuing Gaza from Hamas this winter. So is full U.S. support for Blair's ambitious effort to engage moderate forces in Gaza. Circumstances may be just desperate enough for reason and good will to break out suddenly.

Willful optimism is Tony Blair's strong suit. He hurls himself at hard cases with ironclad confidence in his ability to make history see reason. Take the liberation of Kosovo, which he spearheaded, or Northern Ireland's peace accord, which he coaxed into being. For less happy results, take the war in Iraq.

The former British prime minister journeys this month into the diplomatic wastelands of the Middle East -- with one hand seemingly tied behind him. This time, Blair confronts a challenge that may shred even his hardy historical optimism.

Some who commissioned him to represent the diplomatic artifice known as "The Quartet" -- the United States, Russia, the European Union and the United Nations -- have come to fear that Blair will try to do too much, not too little, as special envoy to Israel and the Palestinians. They know their man.

History would seem to favor the immovable object (the Israeli-Palestinian conflict) over the irresistible force (Blair's dynamism and determination). Peacemakers are blessed in the Bible, but in the Holy Land they are usually assassinated, betrayed, made to look foolish or simply ignored as they sink into ever deepening irrelevance and gloom.

That latter unhappy fate seems to have befallen James Wolfensohn, Blair's immediate predecessor as Quartet special envoy. "The current situation in the Middle East leaves him in despair," Shahar Smooha wrote in the Israeli newspaper Haaretz in July.

Smooha's source was impeccable: Wolfensohn. The former World Bank president took the occasion of Blair's appointment to break a public silence on his policy conflicts with the White House and Secretary of State Condoleezza Rice during Wolfensohn's 11-month effort to help broker understandings between Palestinians and Israelis.

Wolfensohn's version says he had to fight his way into key meetings over the opposition of Rice and National Security Council staff member Elliott Abrams. That led to Wolfensohn's staff of 18 being fired without his being consulted and in apparent retaliation. "I was stupid for not reading the small print," Wolfensohn said. "I was never given the mandate to negotiate the peace." He assumed -- wrongly -- that contributions toward that end would be welcomed.

Don't mistake Wolfensohn's complaint for just one more insider account of dysfunction, rivalry, treachery and bad feelings in the battered Bush administration, which is denounced almost daily by former appointees for having not listened to them, to reason or to the law. Wolfensohn also gave the interview to sketch out a seriously original approach to the Israeli-Palestinian conflict.

"There has to be a moment when Israelis and Palestinians understand that they are a sideshow," Wolfensohn told Haaretz. "The real global politics is the politics of war and the politics of nuclear weaponry and the weight of the population."

He also noted: "Both sides have to recognize that they are 11 million people in a sea of 350 million Arabs. Over the last four years, the war in Israel and Palestine has cost the international community -- including military expenditure -- somewhere between $10 [billion] and $20 billion. The Iraq War has cost $600 billion. The Afghanistan War has cost between $50 billion and $100 billion. You have a nuclear threat in Iran, you have the issue of Syria and which way it goes, and you have a doubling of the Arab population in something like between 10 and 15 years."

Wolfensohn's experience does cast a long shadow over the mission taken on by Blair, whose formal mandate is similarly restrictedto improving the economic situation of the Palestinians while staying out of peace negotiations. The political role is reserved for Rice, who hopes to convene a Middle East peace conference in Washington in November.

Two things are essential for that conference to succeed, involved diplomats say: One is for Saudi Arabia to attend and to offer formally to Israel a peace plan that has been discussed in the media by King Abdullah. The other is for Bush to engage his own prestige and influence in a negotiating effort that has been left entirely to Rice. It is not yet clear that Bush is as committed to pressing Israel to make difficult compromises as is his secretary of state.

The need for Bush to engage eventually may partly explain why Blair has not been deterred by the Middle East's long abuse of would-be peacemakers. It would be foolish to sideline or constrain his enormous political skills, his close ties to Bush and that irrepressible optimism if a serious effort for peace is to be mounted. Rice should come to see that as well.

President Bush enjoys hosting formal state dinners about as much as having a root canal. Or proposing tax increases. So his decision to schedule a mid-April White House gala for Saudi Arabia's King Abdullah signified the president's high regard for an Arab monarch who is also a Bush family friend.

Now the White House ponders what Abdullah's sudden and sparsely explained cancellation of the dinner signifies. Nothing good -- especially for Condoleezza Rice's most important Middle East initiatives -- is the clearest available answer.

Abdullah's bowing out of the April 17 event is, in fact, one more warning sign that the Bush administration's downward spiral at home is undermining its ability to achieve its policy objectives abroad. Friends as well as foes see the need, or the chance, to distance themselves from the politically besieged Bush.

Official versions discount that possibility, of course. Bandar bin Sultan, the Saudi national security adviser, flew to Washington last week to explain to Bush that April 17 posed a scheduling problem. " 'It is not convenient' was the way it was put," says one official.

But administration sources report that Bush and his senior advisers were not convinced by Bandar's vagueness -- especially since it followed Saudi decisions to seek common ground with Iran and the radicals of Hezbollah and Hamas instead of confronting them as part of Rice's proposed "realignment" of the Middle East into moderates and extremists.

Abdullah's reluctance to be seen socializing at the White House this spring reflects two related dynamics: a scampering back by the Saudis to their traditional caution in trying to balance regional forces, and their displeasure with negative U.S. reaction to their decision to return to co-opting or placating foes.

Abdullah gave a warm welcome to Iranian President Mahmoud Ahmadinejad in Riyadh in early March, not long after the Saudis pressured Palestinian President Mahmoud Abbas into accepting a political accord that entrenches Hamas in an unwieldy coalition government with Abbas's Fatah movement.

"The Saudis surprised us by going that far," explained one White House official in a comment that reached -- and irritated -- Saudi officials. So don't count on Abdullah to put new force behind his long-stalled Israeli-Palestinian peace initiative at the Arab summit scheduled this week in Riyadh.

Rice had hoped the summit would provide a boost in her current proximity talks with Israeli and Palestinian officials, but she appears to have struck a dry well. "She is conducting crisis management, not grand diplomacy," a European official who talked to her recently said disappointedly.

Adds an admirer who tracks Rice's intentions and assessments in the Middle East: "Condi is doing everything she can. But she is dancing with a corpse that just keeps flopping over in another direction every time she tries to move it."

A few months ago, Bandar was championing the confrontational "realignment" approach in Saudi family councils: Iran's power would be broken, the Syrians would have to give up hegemonic designs on Lebanon, etc., etc. Now the Saudi prince visits Tehran and Moscow regularly. He helped set the stage for the Palestinians' Mecca accord, which has caused Israel to reduce what little cooperation it felt it could extend to Abbas.

And he delivered the king's regrets about dinner. (The White House declined all comment about the April 17 dinner and Bandar's visit.) This is less a clear strategic reversal than a tactical adjustment for the Saudis: They remain frightened of the expanding ambitions of Iran. And the personal bond between the Saudi royals -- especially Bandar -- and Bush and his father remains strong.

But the Saudis, too, know how to read election returns. They see Bush swimming against a tide of scandal and stench that engulfs his most trusted aides. In the traditional Saudi worldview, this is a moment to hedge, not to indulge in the kind of leadership needed to break the Israeli-Palestinian deadlock or the deadly morass of Iraq.

It could be less calculated than that. Part of the royal family was unhappy with Bandar's earlier break-their-bones realignment rhetoric. Abdullah would not want to come to Washington to front for a divided family. He may need more time to patch things.

But Rice will get no relief when she returns to Washington. She will have to deal with more depressing society news: Jordan's King Abdullah, who has spent more time in George W. Bush's Washington than any other foreign leader, has let the White House know that he can't make that state visit discussed for September. Can you do 2008? the king asks instead.