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.”

This week Defense Minister Ehud Barak promised that "when the time comes," Hamas will pay for its aggression; two years ago, Prime Minister-elect Ehud Olmert promised that Israel will be a country that is "fun to live in"; during the Second Lebanon War, the government promised a "strong home front"; during last week's interviews granted on the eve of the holiday, Olmert promised that "Iran will never go nuclear"; the diplomatic and security effort this government is focused on these days is meant to secure a tahdiyeh (lull) in the South during the coming month, so that the Independence Day celebrations, and especially the visit by U.S. President George W. Bush, will not be marred; and the epitome of this method - Israel is conducting negotiations with the Palestinian Authority to reach a "shelf agreement," which it has no intention to implement.

The modus operandi selected by Olmert to conduct state affairs is drawn from the world of entertainment and anchored in the dominant media culture: He simulates reality and paints virtual solutions to real problems.

The country is a reality game. The real problems are not solved, they are "treated": They are being worked on, they are being talked about, a dialogue is created around them. This way the government creates a false image of activity that gives the impression that it is seriously working to further the state's affairs. In practice it only produces "processes" that are deceptive and distorted.

The shelf agreement is a clear example, highlighting the phenomenon: From the onset, neither the government nor the prime minister believed in the validity of the document they are negotiating with the Palestinian Authority. Their effort in this diplomatic process is purely formal - a sort of blueprint from which, at an unknown future date, a practical settlement will be derived and which will apply to the two sides.

The agreement is meant to resolve all the disputes between Israel and the Palestinians, including the question of borders, control over Jerusalem, the right of return and issues of security. This is an enormous and necessary challenge - so long as they are serious about implementing it.

However, the current atmosphere, at least on the Israeli side, is one of an intellectual exercise, something like, "let's see if we are able to reach understandings." The point of departure of the country's leadership is that the document now being discussed has no chance of being implemented, even if an agreement is formulated. The main reason for this is the weakness of the government of Mahmoud Abbas, and the dominance of Hamas in the Palestinian street.

Less-biased observers than the prime minister and his colleagues will argue that there is also a bone stuck in Israel's throat that is preventing it from swallowing the compromises necessary for reaching an agreement, not to mention implementing it - but Olmert is experienced in dousing the right-wing positions of Shas.

The government is now conducting a fake diplomatic process: It recognizes that it has no real chance of having practical results, except a formula on paper, in the best-case scenario. It perpetuates it because it is regarded as the lesser of two evils: Instead of raising its hands and surrendering on dialogue with the leadership of the Palestinian Authority, it is best to pretend and give the impression of dialogue.

The Israeli leaders tell themselves: If it does not work - it will not harm. Meanwhile, they are delaying the end, putting off the moment of truth, and are gaining another week, another month in power without direct confrontation with Abbas and his officials.

The Palestinians have their own reason for playing the game by these rules. To himself and the public, Olmert explains that the document being discussed, if an agreement is reached on it, will burn into the consciousness of the world the principle of two countries, and will thus push back the growing trend in the international community to establish a single, binational state over the entire territory.

This, of course, is a highly worthy purpose, and it is at the base of the view of many in Israel who aspire for a withdrawal from the territories to ensure the Zionist character of the state, but which requires, if it is to be achieved, practical willingness to take action and not make do with aiming for agreed-on formulas.

In other words, the key to securing Israel as a national home for the Jewish people is in the ability of its leadership to find the courage to confront the camp that refuses to surrender Judea and Samaria. Only after passing this test will the time come for an agreement with the Palestinians.

Three weeks ago, a smug real estate agent appeared on TV and announced with certainty that all the apartments to be built in Givat Ze'ev's Agan Ayalot neighborhood would be populated immediately. He added that he was convinced of his ability to sell every apartment built in this settlement because there is tremendous demand from ultra-Orthodox families for housing in this area. As if to make his words more concrete, little boys with long peyot and little girls in long dresses were shown playing in the background. Identical messages and scenes were seen in interviews with entrepreneurs and apartment owners in Har Homa, where building had been unfrozen several weeks earlier.

This week, in the wake of separate meetings between United Torah Judaism and Shas leaders with the heads of the Beitar Ilit settlement, the prime minister's decision to allow the establishment of 600 new housing units at Pisgat Ze'ev, and 800 at Beitar Ilit, was made public. There is no doubt about it: The ultra-Orthodox factions have become the spearhead of the settlement enterprise over the Green Line, and they are busy competing with one another over which of them will lead it.

An instructive process is developing: The original settlers, with their knitted skullcaps, are becoming more ultra-Orthodox, while the ultra-Orthodox public is becoming more nationalistic. The proximity of beliefs between the two camps is creating an effective pressure group having a real effect on the government's moves.

The levers that Gush Emunim and the Yesha Council of Settlers knew how to use on prime ministers and defense ministers over the generations are now in the hands of the leadership of Shas and United Torah Judaism. Ehud Olmert needs Shas in order to hold on to his government, and he has to satisfy UTJ's demands so it will serve as a safeguard in case his coalition breaks up.

These two parties exploit their political strength and move Olmert around like a puppet on a string. Olmert tries to pretend that his response to their demands is mere small change, but in fact they are dictating the agenda with regard to settlement over the Green Line and, in this way, they have an influence over the entire Israeli-Palestinian arena.

The spiritual leadership of the Ashkenazi ultra-Orthodox public has always espoused a cautious stance toward Israel's Arab neighbors. This approach was said to be rooted in considerations of Jewish law - in terms of saving lives and preventing bloodshed - and was derived from the temperament of the Lithuanian rabbis and the way they perceived their relations with the state. The Ashkenazi ultra-Orthodox public chose to dissociate itself from the central Israeli existence and regarded the state and its way of life as an entity with which one should come into contact as little as possible.

This point of view led, among other things, to the "Torah is his religion" arrangement by which yeshiva students are exempted from compulsory military service, and created the independent education stream, the towns and neighborhoods where the Ashkenazi ultra-Orthodox families choose to live, as well as the limited degree to which they are prepared to partake in the burden of maintaining the state.

Shas, which came into existence against a different social and cultural backdrop, is led by politicians who have adapted themselves to the Ashkenazi ultra-Orthodox way of life, and by a spiritual leader who forgoes his own opinions in favor of those of the Ashkenazi rabbinic elite. In an ironic twist of history, the heads of the ultra-Orthodox public, both Ashkenazi and Mizrahi, now take a completely hawkish stance from the diplomatic point of view, while their disciplined public follows in their footsteps.

On a moral plane, it would be difficult, on the face of it, to complain about the diplomatic positions adopted by Rabbi Yosef Shalom Elyashiv and Rabbi Ovadia Yosef if they were to instruct their people to fulfill the duties that come in the wake of these positions. But unlike the settlers who wear knitted skullcaps and who share the burden, to a considerable extent, of defending the state, and who take on the risks involved in their decision to live in Judea and Samaria, the ultra-Orthodox shirk serving in the Israel Defense Forces and throw the responsibility for protecting them onto others, even when they go to live in neighborhoods and settlements over the Green Line.

This is a crazy reality: The force currently pushing forward the demand to beef up Jewish settlements in the territories belongs to a segment of the population that is not prepared to bear the burden involved in this, and whose basic attitude toward the state is one of alienation and differentiation. How long will the general public stand for this?

It was hard not to be confused yesterday by the reports and statements concerning the aims of the Israel Defense Forces operation in the Gaza Strip. Defense Minister Ehud Barak explained on Israel Radio that the operation is meant "at the end of the day" to stop the Qassam rocket attacks, but in and of itself it will not end the shooting. Prime Minister Ehud Olmert was even more unequivocal: During the cabinet meeting he stated, "Israel has no intention to end the fighting against terror," and that "over the coming days we will hold security discussions... in order to weigh the ways in which our security forces will operate and how to continue with this." Haaretz's main headline yesterday declared that the purpose of the operation is to bring an end to the rocket attacks on Ashkelon, while Ma'ariv's read: "In the crosshairs - the Hamas heads." Yedioth Ahronoth in its commentary (which was echoed by the three television news channels Saturday evening) said that this is "a limited operation that will not stop the rockets."

And the common citizen is left wondering: Where is this government taking the country? Has it formulated its goals in the confrontation with Hamas? Is the escalating military operation necessitated by the goals that have been set? Is there no operational alternative to the chosen option? Would diplomacy and dialogue not be preferable? These ruminations are the result of what is perceived to be the leadership's flip-flopping: on the one hand it has given a green light to significantly escalating the situation, yet on the other, it does not appear to be certain in its decision.

Everyone agrees that the situation, in which communities in southern Israel fall within an increasingly expanding radius of deadly rocket attacks, is unacceptable and must be brought to an end. Coming to terms - albeit with clenched teeth - with the destruction of normal day to day life in Sderot, is undermined as the threat of terror from the sky moves deeper into Israel; not because the blood of the residents of Ashkelon and Netivot is more precious, but because of the strategic implications of the ability of the Palestinian militants to disrupt routine life in increasingly larger swathes of the country.

This broad consensus is reminiscent of the public mood on July 12, 2006, during the first hours after the Hezbollah attack near Zar'it on the border with Lebanon. The overall view then was that Hezbollah had crossed every possible red line, and then too the radio and newspaper pundits called on the government not to hold back - as did the next day's newspaper headlines: "Declaration of war," "IDF strikes Hezbollah," "Beirut will burn," "Prepare bomb shelters in northern Israel."

It seems that the government is also affected by the same spirit that guided its steps during the first days of the Second Lebanon War. While it appears to have adopted the insights of the Winograd Committee and has at its disposal more successful leaders than Amir Peretz and Dan Halutz, the impression created during the past 48 hours is that even now its declarations are hollow and that is has lost its way in its search for a solution to the current situation.

We need a fundamental change, and the way to do this is by either one of two tracks - the military or the political. If the violent option is selected, preparations need to be made regarding its scale, the determination for carrying it through and the means that are necessary to achieve the goal. In other words, to act militarily from the air and the ground with the necessary force that would destroy Hamas' ability to launch rockets against Israel.

If this goal cannot be achieved - either because of the cost in lives such an operation will claim or for other reasons - the diplomatic option needs to be adopted and a dialogue needs to commence with the Hamas leadership. If this angle is not realistic - because of considerations involving Israel's relations with the Palestinian Authority, the United States, or other reasons - the broad military operation needs to be chosen.

A limited military operation, like the one that has been taking place over the past two days, is is not effective: it does not even seek to bring an end to the rocket attacks, it does not aspire to alter the situation fundamentally, and it does not even pose clear goals. The way things are currently being conducted, the government is in danger of once more bitterly disappointing its citizens in an area they are particularly sensitive about: their security.

There's a saying that, if it's round, and green on the outside, red on the inside, has black seeds, and otherwise looks like a watermelon - it most probably is a watermelon. The same could be said about Shas, that if it looks like an opposition party, sounds like an opposition party, and behaves like an opposition party - that's a sign it is an opposition party. Just as the most determined skeptic is invited to cut the watermelon open and take a bite to be convinced that what he has before him is a fruit and not a basketball - it's high time that Prime Minister Ehud Olmert wise up and understand that Shas' representatives are part of the coalition in order to foil the peace process he has initiated, and in this way they are undermining the raison d'etre of the government - at least in the way Olmert presents that government.

On Monday, Shas chair Eli Yishai tightened the noose on the political neck of the prime minister just a bit more: Having already forbidden Olmert from discussing the subject of Jerusalem as a "core issue" with the Palestinians, and having warned not to dare to even express a view that reflects willingness to discuss a compromise on Jerusalem - Yishai now demands that he completely stop the political talks with the Palestinians so long as Qassam rockets continue to be launched into Israel from the Gaza Strip. In the words of Deputy Prime Minister Yishai: "We need to end the negotiations and concentrate on ending terrorism."

In other words, this movement, whose ranks do not normally contribute to the troops who will be sent into the alleys of Beit Hanun and Jabalya, is giving the prime minister an ultimatum: If he does not immediately opt for the military option and relinquish, at least for now, the diplomatic process, Shas will leave the government.

Shas' demand pushes Olmert into a corner, and exacerbates the question raised by his insistence on remaining in his post even after the grave report issued by the Winograd Committee. Olmert has asked us to believe that it is not selfish motives and arrogance that lead him to continue managing the affairs of state; that his behavior is guided by the best interests of the country, as he views them, and which are encapsulated in his desire to reach an agreement with the Palestinians.

Basically, the premier has called on the public to forgive him for his poor performance during the Second Lebanon War, as he asks for the opportunity to calm the conflict with the Palestinians, and then create the conditions to resolve it. Now, along come Yishai & Co., who are drilling holes into the political flak jacket covering the prime minister: In their view, the direction in which he would like to lead the country is mistaken; they are suggesting, essentially demanding, that he go the opposite way - toward war.

In light of this situation, Shas' continued participation in the coalition is a farce. In the not-too-distant future, Shas will transform its views into a political move and leave the coalition. Even if Yishai's warnings are only tactical (to please Shas voters and fend off pressures from Benjamin Netanyahu and Avigdor Lieberman), they are building up to a binding public stance for Shas and creating expectations among its supporters.

Moreover, the views expressed by Yishai do reflect those of the party's constituents, and of Shas' spiritual leader, Rabbi Ovadia Yosef: They are not genuine partners to a willingness to make the necessary concessions for reaching an agreement with the Palestinians. Shas is an opposition party in practice, although it has sufficient audacity to continue benefiting from its place in government without accepting the collective responsibility that the position requires.

This approach is evident not only in its attitude to the question of the Gaza Strip and negotiations with the Palestinian Authority, but also in its demand for the restoration of stipends for children to the high levels they were at five years ago. Such a move would constitute an abandonment of the economic policy that encouraged people to join the work force. Shas also supports the initiative of United Torah Judaism that has called for an exemption for the Haredi education system from the requirement to include in its curriculum core subjects like math and English.

During the 25 years it has been involved in public life, Shas has managed to be "part of," but always from the outside: In its ideological view regarding the relationship between state and religion, it is hardly different from UTJ, which has consciously avoided being part of coalition governments, while in practice, Shas has exhibited great eagerness to be as close as possible to the pie. The choice carries with it obligations, certainly during times of difficult decisions, and if it adopts mutinous views - it should just get out.