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The Israeli and Palestinian economies are closely interconnected. If both economies are independently stable, peace can be a reality. [1]

A 2009 Israeli government report to the Ad Hoc Liaison Committee proposes developing Palestinian infrastructure and creating jobs in conjunction with the removal of Israeli roadblocks in the West Bank to ease Palestinian movement without placing Israeli society at risk. [2]

"Economic development does not solve problems, it mitigates them and makes them more accessible for solution, and creates a stronger political base," Israeli Prime Minister Benjamin Netanyahu said in 2008. [3]

Netanyahu’s statement is based on the belief that Iran and its terrorist proxies overran Israel’s previous peace initiatives in the form of land withdrawals. The prime minister believes a Palestinian state is possible once the Palestinian economy is strengthened, thereby helping to prevent future Iranian influence in the Palestinian territories. [4]

There is already considerable trade between Israel and the Palestinian territories. A 2007 study by the Palestine International Business Forum (PIBF) states that Israel consumes 90 percent of Palestinian exports and is the source of 74 percent of Palestinian imports, showing a significant tie between Israel to the Palestinian economy. [5]

Another report details economic progress in the West Bank since early 2008. According to the report, economic cooperation and interaction between the Israeli government and the Palestinian Authority has resulted in [6]

• A 35 percent increase in trade between Israel and the Palestinian Authority (PA);
• A 24 percent increase in daily wages in the West Bank;
• Substantial growth in agricultural produce originating from the West Bank;
• An increase in banking sector profits.

There was also significant growth in the West Bank’s tourism industry and a 12.7 percent increase in the number of Palestinians employed by Israeli-owned businesses. [7]

These improvements in the Palestinian economy were not happenstance. Israel took specific steps in 2008 to ensure Palestinian economic growth:

• Eased access and movement by removing roadblocks and checkpoints; [8]

• Launched the Jenin Pilot Project, which seeks to strengthen the Palestinian Security Forces, improve the local economy and promote economic projects to improve daily life for Palestinians. [14]

Israel also works with Palestinian customs offices and has established an Israeli-Palestinian Chamber of Commerce and the Palestinian Israeli Business Forum. A joint economic committee between Israel’s Ministry of Finance and its Palestinian counterpart meets regularly to discuss issues such as Palestinian workers in Israel and the transfer of funds to Gaza. [15]

Other joint committees were created under the Oslo Accords and continue to foster cooperation between Israelis and Palestinians in different fields such as tourism, transportation, water, health, welfare and telecommunications, which have all met at least once in 2008. [16]

The PIBF study that dates back to 2007 projected that Israeli and Palestinian economic cooperation could result in $25 billion in exports and income profits, as well as the creation of a million jobs for both Israelis and Palestinians. [17]

The study also stated that the growth could only happen if the Palestinians build a stable economy and that, with economic interdependence, Israelis and Palestinians could not afford to wage war on each other.

Israel also has worked to develop understanding, networking and dialogue between Israelis and Palestinians through organizations such as MASHAV and People to People. [18]

Quotes on Economic Peace by PM Netanyahu

• “There is an important future for the Palestinian economy and the Palestinian-Israeli economic relationship. We intend to invest an enormous amount in this area. The faster it moves, the stronger the Palestinian economy becomes and the stronger the peace between our peoples becomes.” [19]

• “We must weave an economic peace alongside a political process. That means that we have to strengthen the moderate parts of the Palestinian economy by handing rapid growth in those areas, rapid economic growth that gives a stake for peace for the ordinary Palestinians." [20]

Palestinian Culture of Hate

Despite cooperation between the two sides, the Palestinian Authority and Iran-backed Hamas continue to promote a culture of hate that is widespread in Palestinian culture, particularly in Palestinian schools, Gaza’s Hamas-ruled Palestinian government and Palestinian media. For example:

• On May 5, the Palestinian newspaper Al-Ayyam reported that the PA named its new computer center after Dalal Mughrabi, a female terrorist who in 1978 killed 37 civilians—including 12 children—in a bus hijacking in Israel. American photographer Gail Rubin was among those killed in the attack. [21]

• In Palestinian classrooms, schoolchildren are taught that Israelis are the enemy and Palestinian TV regularly airs programs geared towards children that encourage them to kill Israelis and thus achieve martyrdom. [22]

• Hamas’s own charter calls for killing Jews. It states, “The time will not come until Muslims will fight the Jews (and kill them); until the Jews hide behind rocks and trees, which will cry: O Muslim! There is a Jew hiding behind me, come on and kill him!” [23]

“The indoctrination campaign must involve ulama, educators, teachers and information and media experts, as well as all intellectuals, especially the young people and the sheikhs of Islamic movements. It is [also] necessary to introduce essential changes in the curricula, in order to eliminate the influences of the intellectual invasion which were inflicted upon them by the Orientalists and the missionaries.” [24]

Just last month, Abbas rejected the idea of a Jewish state and recently met with Palestinian youth leaders where he held up a framed map of Palestine – clearly labeled in English – that covered all of Israel. “I say this clearly: I do not accept the Jewish State, call it what you will," Abbas said during the meeting in Ramallah. The photo of Abbas holding the map appeared on the front pages of both Palestinian Authority daily newspapers. [25]

Recent Palestinian Terrorist Activities in 2009

 • June 8: Ten gunmen approach the Nahal Oz border crossing between Gaza and Israel, with a large quantity of explosives loaded on horses, seeking to infiltrate Israel’s border and kidnap IDF soldiers. The gunmen opened fire on an IDF force by the crossing, which returned fire, killing four militants. [26]

• May 22: Palestinian Islamic Jihad (PIJ) operatives open fire at IDF soldiers by the Kerem Shalom goods crossing along the Israel-Gaza border. The soldiers return fire and kill the terrorists. [27]

• May 22: An IED (Improvised Explosive Device), targeting an IDF patrol, explodes near the Karni crossing. The Popular Front for the Liberation of Palestine (PFLP) claimed responsibility for the attack, although it did not result in any casualties. [28]

• May 19: Iran-backed Hamas fires a Qassam rocket, hitting a Sderot home. Two victims were treated for shock and the home was moderately damaged. [29]

• May 3: An Israeli soldier is stabbed in the neck and moderately injured when getting off a bus in Ramat Gan, near Tel Aviv. The Arab attacker fled the scene, but was caught the next day. [30]

• April 29: An IED device explodes by the Erez Crossing in the Gaza Strip. There were no casualties. Members of PIJ and the Fatah-affiliated Al-Aqsa Martyrs Brigade claimed responsibility for the attack. [31]

• April 13: The Israeli Navy discovers an unmanned vessel off the coast of the Gaza Strip. Upon approaching the boat, it exploded but caused no damage. The navy suspected that hundreds of tons of explosives were aboard the boat and the target was a navy ship. [32]

• April 7: A resident of Jabal Mukaber in East Jerusalem tries to run over three policemen in Sur Baher (another neighborhood in East Jerusalem) with his vehicle. The policemen, who sustained minor injuries, shot and killed the terrorist. [33]

• April 4: Basma Awad al-Nabari, 15, opens fire on Israeli Border Police at the Shoket Junction in southern Israel. The police try to persuade al-Nabari to turn herself in, but fail. When she continues to shoot they return fire and kill her. [34]

• April 2: An axe-wielding terrorist enters the settlement of Bat Ayin in the West Bank and murders 16 year-old Shlomo Nativ, and attempts to murder a 7-year-old child. Another resident scuffles with the terrorist but he manages to flee the scene. [35]

• March 31: IDF soldiers discover four terrorists placing an IED near the Gaza Strip security fence. Two terrorists were killed in the ensuing gun battle and large quantities of explosives are found. [36]

• March 21: Police foil a terrorist attack in Haifa. A private vehicle wired with explosives is found outside the entrance of the Lev HaMifratz shopping mall. Approximately 100 pounds (45kg) of explosives are found in the vehicle. [37]

• March 7: An Israeli civilian sustains minor injuries when stones are thrown at him near the city of Hebron in the West Bank. [38]

• March 5: A Palestinian drives a bulldozer into a police patrol car in Jerusalem. The bulldozer crosses the intersection, plows into the car a number of times, overturning it, jamming the car against a street light and a bus on the other side of the street. A policeman sustains light injuries. [39]

• March 5: An anti-tank missile is fired at an IDF patrol on the Israeli side of the Gaza border security fence. [40]

• March 1: Nine rockets hit towns and communities in the Western Negev. One rocket hits a house in the city of Sderot. In a separate incident, an Israeli civilian sustains injuries when stones are thrown at his car, north of Ramallah. [41]

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