Report of IPI Roundtable on ‘Palestine: Deal of the Century & Two-State Solution’

IPI organized a roundtable discussion on ‘Palestine: Deal of the Century & Two-State Solution’ on June 26th, 2019. The event was organized against the backdrop of the “Peace to Prosperity” workshop held from June 25-26 in Bahrain. The Bahrain workshop was described as the economic part of President Donald Trump’s “Deal of the Century”, a controversial proposal for settling Palestine dispute that appears to be heavily tilted in favour of Israel while ignoring the core issues in the dispute. In view of the ‘Deal of the Century’ proposal, the Bahrain workshop and the dilemma Pakistani policy makers could face in taking a position on the issue, IPI organized the roundtable to brainstorm the options before Pakistan government.


The Palestine dispute is one of the longest running and most complicated disputes in the world’s modern history that has roots in the Israeli occupation of Arab territories. There have been several attempts at resolving the issue at the United Nations, and other international bodies in addition to initiatives by different countries, but a durable solution has remained elusive and Palestinians continue to endure oppression under occupation.

Addressing Palestine issue has been a major priority for US President Donald Trump since he assumed office in January 2017. It was one of his electoral promises. He had his own view of the conflict and promised to give an ‘ultimate deal’ for ending the problem. He assigned his son-in-law Jared Kushner and two of his trusted aides Jason Greenblatt and Ambassador David Friedman to prepare the plan, which he called ‘Deal of the Century’. The deal is still to be officially unveiled, but its economic component worth $50 billion has been launched by Mr Kushner. The fiscal part is being deliberated at length at an international event in Manama (Bahrain) on June 25-26, 2019.  The event dubbed the “Peace to Prosperity” workshop is being held to raise tens of billions of dollars in pledges to foot the bill for the proposed deal.

The proposed deal, which enjoys the blessings of major Arab countries including Saudi Arabia and United Arab Emirates,  has, however, been rejected by the Palestinians – the primary stakeholders in this dispute. They contend that they were never consulted in the process and as such do not have confidence in it. President Trump did not just sideline Palestinians from the new plan, but has over the past couple of years ended all political and economic relations with them. He shut down the Palestinian Authority’s office in Washington and ended US economic and humanitarian assistance to the Palestinians by gradually stopping more than $200 million in economic aid projects for the West Bank and Gaza  and another $200 million in annual contribution to the UN Relief and Works Agency for Palestine Refugees, which has provided health care, education, and other services to Palestinian refugees since 1949.

The solution being proposed by Trump Administration is misplaced as it offers economic opportunities and prosperity to Palestinians instead of assuring them freedom from Occupation. Moreover, Trump has undermined his position as an honest broker in the conflict by officially recognizing Jerusalem as the capital of Israel after reversing decades-long US policy-based on UN Security Council Resolution 242, advocating a political settlement of Israel-Palestine conflict along the pre-June 1967 borders, with security guarantees and recognized borders. Trump, as a matter of fact, has already in December 2017 tolled the death knell for the Two-State solution.

President Trump in March 2019 recognized Israel’s claim over Golan Heights, which had been captured from Syria in 1967. Israeli claims to Golan Heights had always been rejected by the international community and the United Nations. Subsequent to acceptance of the claim by US, Israel has announced new settlements at Golan Heights and named them Trump Heights.

The apprehension is that President Trump, instead of seeking a solution of the dispute that could guarantee peace in the region, is working on a plan to enhance security of Israel while keeping the region unstable. The United States clearly has an interest in protecting the security of Israel, its long-term ally.

The situation is posing a serious foreign policy challenge for Pakistan. On one hand Islamabad is being pressured by Arab friends, who provided assistance for stabilizing economy when Pakistan Tehrik-e-Insaaf (PTI) government came to office amidst serious economic crisis, to support the Deal. While on the other hand is Pakistan’s long held position on the dispute that calls for a just, comprehensive and lasting solution based on international law and full implementation of relevant United Nations Resolutions, including Security Council Resolutions 242 (1967), 338 (1973), 1397 (2002) and 1515 (2003) as well as the Madrid terms of reference, the road map, the Arab Peace Initiative and the understandings reached in Annapolis.

Pakistan government has in the past also drawn parallels between Palestine and Kashmir conflicts. This means that Pakistan’s decision on this issue could potentially have implications for its position on Occupied Kashmir. It would, therefore, be a difficult choice for the government. The government is advised to judge ‘Deal of the Century’ according to the position that it has already taken on Palestine issue, which calls for attainment of rights of the Palestinian people to exercise self-determination and sovereignty in their independent and viable State of Palestine established on the basis of the pre-1967 borders, with Al-Quds Al-Sharif as its capital; and a just resolution of the Palestinian refugees issue in accordance with General Assembly resolution 194(III) of 11 December 1948. There are no two opinions that there can be no solution to the dispute without Israel’s complete withdrawal from occupied Arab Territories including Golan Heights.


The United Nations General Assembly Resolution (UNGAR) 181 (II)  was adopted in November 1947 to endorse the United Nations Partition Plan for Palestine. The resolution called for the creation of an independent Arab and a Jewish state, while proposing a Special International Regime for the city of Jerusalem as ‘corpus separatum’ (a separate entity). In June 1967, the Six-Day War, or Third Arab-Israeli War broke out between Israel and the neighbouring states of Egypt, Jordan, and Syria. In the aftermath of the war, Israel managed to capture huge swathes of land: the Gaza Strip and the Sinai Peninsula from Egypt, the West Bank and East Jerusalem from Jordan, and the Golan Heights from Syria.

Later on, the United Nations Security Council (UNSC) adopted the United Nations Security Council Resolution (UNSCR) 242 aiming at withdrawal of Israeli armed forces from territories occupied in the war by recognizing sovereignty, territorial integrity, and political independence of each state.  From 1993 to 1995, however, a number of agreements known as the Oslo Accords, aimed at achieving peace on the basis of UNSCR 242, were signed between Israel and the Palestine Liberation Organization (PLO).

The Oslo Accords backed the two-state solution while endorsing the UNSCR 242. It is pertinent to mention that Jerusalem, under international law, is supposed to remain a divided city with East Jerusalem being the capital of a future Palestinian state while West Jerusalem likely to be the capital of Israel.  Similarly, another initiative aimed at ending Israeli-Palestinian conflict, the 2000 Camp David Summit, took place in July 2000, but the negotiations ended in smoke without any substantial agreement.

An Arab Peace Initiative led by Kingdom of Saudi Arabia in 2002 proposed Israeli withdrawal from 1967 borders by establishing an independent Palestinian state in the West Bank and the Gaza Strip, but it could not yield desirous outcomes either. A year later in 2003, the Quartet on the Middle East, a group of four nations and international and supranational entities – the United Nations, the European Union, the United States, and Russia –  that was involved in mediating the Israeli-Palestinian peace process, unveiled a roadmap for permanent peace, but it too failed to materialize. Former American president Barack Obama, who too supported the two-state solution, put a partial freeze on Israel’s illegal settlements. Unfortunately, his moves also failed to generate any ideal solution to the Israeli-Palestinian crisis.

The ‘Deal of the Century’ is a fresh attempt by the Trump administration of the United States (US) aimed at reaching a long-lasting solution to the decades old Palestinian crisis. There are fears that this proposal focusing on economic and development issues might undermine the United States’ support for the two-nation formula as the measures contained in it are heavily tilted in favour of Israel.

Initially Mr Trump, during his election campaign in 2016, had begun to talk about the “ultimate deal” to resolve Palestine conflict. He started actively pursuing this idea after coming to office. The project was spearheaded by his son-in-law Jared Kushner, Jason Greenblatt, and US ambassador to Israel David Friedman. The US State Department was largely bypassed during the formulation of the proposal.


The much talked about ‘Deal of the Century’ is being driven by Jared Kushner, Donald Trump’s son-in-law and White House adviser. The plan, still shrouded in the mystery, is apparently meant to resolve the conflict between Israel and the Palestinians. It is, however, feared by Palestinians and other international experts that the plan would favour Israel, leaving the Palestinians and their cause at a huge disadvantage. The plan, as per leaks and some public statements by key US figures, eschews the resolution of the core territorial dispute, while offering the Palestinians and their future generations’ new opportunities, more and better paying jobs and prospects for a higher quality life. More simply, it is a cash in lieu of territory deal that is being offered to Palestinians. A truly Trumpian solution!

It is also envisioned, by scores of international experts closely observing the regional developments, that the United States (US) has reversed its long-maintained two-state policy, the policy confirming the Palestinians’ right to have their separate state in Gaza, East Jerusalem, and the West Bank.

The economic blueprint of the plan has been revealed by Mr Kushner and is being discussed in detail at the ‘Peace for Prosperity’ workshop being held in Bahrain (June 25-26). The overall implementation of the plan is facing a delay owing to dissolution of Israel’s parliament. There are also palpable chances, as both Kushner and Trump have backgrounds and expertise in real estate rather than diplomacy, that they would offer economic packages as bait to the Palestinians and their Arab neighbors, thereby luring them to some deals in the hope of securing long-lasting peace and security for Israel. Kushner’s two advisors, David Friedman and Jason Greenblatt, are staunch supporters of Israeli settlements.

The situation becomes further grim due to absence of political contacts between West-backed Palestinian Authority in the Israeli-occupied West Bank and the Trump administration for last 18 months ever since Trump’s decided in 2017 to recognize Jerusalem as Israel’s capital and move the US embassy there from Tel Aviv.  The Palestinian reaction to the move had annoyed President Trump, who responded by cutting the aid for Palestine including funds for UNRWA, the UN agency supporting Palestinian refugees. It has also closed the Palestine Liberation Organisation (PLO) office in Washington that had been opened by the former president Barack Obama.

Egypt, Jordan, and Morocco are participating in the US-led conference in Bahrain, which is also being backed by Saudi Arabia and United Arab Emirates. The participation of important Arab states has added to the significance of the conference these states have either enjoyed close relations with Israel or are developing ties with it. Two of these states already have peace agreements with Israel and have also remained key players in Israeli-Palestinian peace efforts in the past. It is reported that finance and economic ministers of important countries, business leaders, and other global financial bodies, like the International Monetary Fund (IMF) and World Bank, are also taking part in the conference.

The US move to relocate its embassy to East Jerusalem has undermined its role as neutral arbiter in the conflict. Likewise, American support for Israeli claim on the Golan Heights is at variance with its long-held policy on the issue. These steps and the closure of PLO office in Washington in September 2018 suggest that US no more supports the two-nation solution of the conflict.


Israeli publications have carried the outline of the plan. The main points of the agreement are as follows:

  • A territory called “New Palestine” will be established in the occupied West Bank and Gaza, excluding the Israeli settlements through a tripartite agreement between Israel, the PLO and Hamas. The settlements that have been illegally established by Israel, as per the plan, would become part of Israel instead of being rightfully returned to Palestine.
  • Palestinian prisoners would be gradually freed under the deal in three years.
  • Israel would maintain the control of Jerusalem. The Palestinian residents of the city would be citizens of Palestine but would pay taxes to Israel. Status quo would be maintained at the holy sites.
  • Egypt will provide land for airport, factories and agriculture for Palestine. These would serve Palestine in meeting its requirements, but Palestinians will not be permitted to reside in that region.
  • A highway connecting the Gaza Strip to the West Bank will be built above Israel mainly through Chinese funding with South Korea, Australia, Canada, the US and EU each chipping in ten percent.
  • The deal would be sponsored by US, EU and Gulf states. The budgeted figure for establishment of New Palestine is $50 billion. Arab brothers would provide 70 per cent of the cost, the Americans will contribute 20 per cent and the EU ten per cent.
  • “New Palestine” would not be permitted to raise armed forces and would rely on Israel for defense against any external aggression. However, for internal law and order, it could have its police.
  • Hamas will hand over all its weapons to Egypt.
  • Elections are expected to be held within one year of the establishment of the “New Palestine” state.
  • All borders between the Gaza Strip and Egypt and Israel would remain open to people and goods and Palestinians would be able to use Israeli air and seaports.
  • “New Palestine” will have two crossings into Jordan, these will be under the control of the “New Palestine” authorities.
  • In case of non-acceptance of the deal, the US will cut all financial support to the Palestinians. Other countries would be pressured to follow the suit. Contrarily if Palestinian Authority President Mahmoud Abbas signs the deal, but Hamas and Islamic Jihad refuse to do so then war will be imposed on Gaza Strip. The cost for refusal by Israel is mere cessation of $3.8 billion a year in support.

The economic component of the proposed Deal, which has been unveiled and published on White House website, reveals that it would carry a price tag of $50 billion. The funds are planned to be raised through Public and Private financing including investments by corporate sector. Around one million new jobs are proposed to be created for the Palestinians. The distribution of the projects envisaged under the Deal suggests that projects worth $27.5b would be set up in the West Bank and Gaza, while another $9.1bn, $7.4bn and $6.3bn would be spent on welfare of Palestinians living in Egypt, Jordan and Lebanon respectively. The projects are planned to be undertaken in the fields of healthcare, education, power, water, high-tech industries, tourism and agriculture.



Prof. Sajjad Bokhari, Executive Director IPI, commenced the roundtable with his introductory remarks. Mr. Malik Muhammad Ehsan Ullah Tiwana, Chairman National Assembly Committee on Foreign Affairs, chaired the roundtable discussion. Permanent Representative of Pakistan at the UN Ambassador Maleeha Lodhi and Deputy Permanent Observer of the State of Palestine at the UN Ambassador Feda Abdelhady addressed the participants of IPI’s roundtable via video. Mr. Awais Ahmed Khan Leghari, Former Federal Minister & Secretary General PML-N (Punjab), and Allama Raja Nasir Abbas, Secretary General Majlis Wahdat-e-Muslimeen Pakistan-MWM were guest speakers at the roundtable discussion. Ambassador (R) Ali Sarwar Naqvi, Executive Director at the Centre for International Strategic Studies (CISS) also took part in the roundtable discussion. Several representatives of think tanks, academicians, media personnel and researchers attended the event.


The key arguments of the speakers are listed below:

In his introductory remarks Prof. Sajjad Bokhari termed the “Peace to Prosperity” workshop as an attempt at closing all the doors on the Palestinians for their separate and independent state. He further said US by ending aid to the United Nations Relief and Works Agency (Unrwa), a Palestinian refugee agency, added to the economic woes of the Palestinians. He maintained that US moves of shutting down Palestinian Authorities’ office in Washington; accepting Jerusalem as the capital of Israel and recognizing Israeli sovereignty over Golan Heights have proven that US is not an ‘honest broker’ in the dispute.  He maintained that the flawed-deal is likely to widen the gap between Muslims countries on the issue as some states have supported the plan while the others were opposed to it.

He suggested that Pakistan, while formulating its position on the issue, must keep in view its current stance on the dispute, international law and the relevant UN resolutions. He said that lasting peace cannot be achieved without addressing the core issues. Drawing parallels between the Kashmir and the Palestinian issues, he stated that any foreign policy decision in this regard may have implications for Pakistan’s position on the Indian Occupied Kashmir (IOK).

Permanent Representative of Pakistan at the UN Ambassador Maleeha Lodhi in her presentation said that support for Palestine has always remained an important pillar of Pakistan’s foreign policy. She compared the Palestine issue with the Kashmir dispute and noted that both of them remain unresolved on UN agenda as the relevant United Nations Security Council (UNSC) resolutions remain unimplemented. She accused big-power politics of hindering the implementation of UN resolutions on the two disputes.

Dr Lodhi said that Pakistan firmly remains committed to Two State Solution of the Palestine dispute and rejects the shifting US position on the issue. While referring to US position on Golan Heights, and illegal settlements, she said that a shift in US position was noticeable and Pakistan does not agree with those changes and continues to be part of OIC in rejecting them and calling for a just, and humane settlement of Palestine issue in line with UNGA and UNSC resolutions.

Pakistan, she said, calls for Two State solution based on pre-1967 borders with Jerusalem as capital of independent and contiguous Palestinian State. International consensus in favour of such a solution, she maintained remains unaffected. Quoting UN Secretary General, the Pakistani envoy said, there was no other viable plan that could deliver peace in Middle East.

Deputy Permanent Observer of the State of Palestine at the UN Ambassador Feda Abdelhady, meanwhile, said accused US President Donald Trump and US ambassador to Israel David Friedman of aligning with the right wing parties in Israel and sabotaging the peaceful solution of the Middle East crisis. She said that the Palestinians have already rejected the so-called US-led “Deal of the Century” by not participating in its economic workshop the “Peace to Prosperity” in Bahrain. She said that Palestinians will only accept a solution, which is based on the UN resolutions, international law and the Arab Peace Initiative- all of which call for a two-state solution. She further expressed her unwavering believe in multilateralism and dialogue for the solution to the Palestinian issue.

Amb Abdelhady rejected the ‘Deal of the Century’ as “cynical and bad faith effort”.

Criticizing the US plan, she said Bahrain Conference relegated core issues in Palestine dispute as ‘non-issues’ and there was not even a mention of ‘Palestine’ and ‘occupation’ in the US plan. She said US was, in collaboration with Israel, trampling the law and mocking the longstanding international consensus on the issue.

“It is clear that appealing, cajoling, and appeasing Israel is not going to work and the international community must realize that only accountability can break this toxic cycle, end illegal occupation and achieve rights for Palestinian people,” she maintained.

Mr. Malik Muhammad Ehsan Ullah Tiwana reaffirmed the message of Dr Lodhi and said that Pakistan must follow the international law and US resolutions. He believed that Pakistan does not have much room to change its position on the issue except for supporting the UN resolutions. He said that Pakistanis would never accept ‘Qibla e Awal’ going to Israel. Answering a question whether the Palestinian issue has any relevance to a non-Arab state, like Pakistan; he said that Pakistan looks at the issue from the lens of ‘Muslim Ummah’. He said that Pakistan is not in a position to take two different approaches towards two same issues of Palestine and Kashmir as any foreign policy decision on Palestine will have serious implications for the position on the Kashmir dispute. He said despite facing enormous challenges, Pakistan has always offered unflinching support for their Palestinian brethren. He said Pakistan is facing two-pronged challenge while devising any position on the Palestinian issue: one is religious sentiments of Pakistanis attached to the Palestine; and, second, is possibility of serious repercussions of that position for our long-maintained stance on Kashmir. He noted that there was a political consensus in Pakistan on the Palestine issue.

Executive Director Centre of International Strategic Studies Ambassador (R) Ali Sarwar Naqvi, on this occasion, said Pakistan has always supported the UN resolutions which call for withdrawal of Israeli army from the occupied territories; recognition of Jerusalem as the capital of Palestine; and right of return to Palestinian refugees. Highlighting Pakistan’s contributions to the issue, he reminded that some of the early UN resolutions on Palestine were drafted by Pakistani diplomat Agha Shahi. He said many important countries, like Pakistan, China, and Indonesia are not taking part in the US-led Bahrain workshop, which would weaken its credibility. He also believed that the timing of the workshop was inappropriate as Israeli Prime Minister Benjamin Netanyahu was facing a reelection in September after his parliament was dissolved last month. He said Pakistani policy makers need not worry as the proposal was not likely to achieve its goals.

Mr. Awais Ahmed Khan Leghari said that despite a noticeable shift in the foreign policies of the KSA and the UAE towards Israel, Pakistan should not abandon its independent stance on Israel as extending legitimacy to any plan contrary to international law and the UN resolutions may have severe consequences. He said Pakistani policy makers should not toe the line of their Arab friends as the latter have remained neutral on Kashmir issue while forging close ties with India. He said any change in position on Palestine can have serious implications for Kashmir issue. Mr. Leghari said Arab countries are at US’ beck and call as they need American support for deterring Iran, suppressing Houthis in Yemen; challenging Qatar in the current standoff, and establishing their regional hegemony. He said Arabs take Iran as their real enemy instead of Israel. In this scenario, he believed, Pakistan must support Palestinians while not recognizing the illegal settlements of Israel and its unlawful control on Jerusalem.

Allama Raja Nasir Abbas said that Pakistan has a significant geostrategic importance. It can become a target of Western conspiracies in the future for its role in the global politics as international power is shifting towards Asia. He maintained US and its allies want a well-planned territorial extension of Israel as Israel lacks sufficient strategic depth. He said since Israel failed to extend its territory in Lebanon, Syria, and Iraq after a strong resistance shown by these states, US started to use the unlawful tactic of this so-called controversial “Deal of the Century” to extend the territory of Israel while sidelining the aspirations of the Palestinians.  He maintained that the plan of Greater Israel is a threat to entire Asia, and it was only Iran that was the epicenter of this resistance to Israel. He said KSA’s policies on Yemen and Egypt are also a hindrance in the way of peaceful settlement of the Middle East crisis.

IPI’s Observations and Recommendations

The Islamabad Policy Institute (IPI) has presented a number of recommendations for the Pakistani policy makers in view of the developing situation:

  1. The US-led ‘Deal of the Century’ is a death knell for the two-state solution of the Palestinian conflict.
  2. The deal has a propensity to widen the gap between the Muslim states on the issue.
  3. The only viable political solution to the Palestine crisis lies in the implementation of the UN resolutions as any deviation may have serious consequences for Pakistan’s stance on Kashmir issues.
  4. Big powers have been playing a negative role in impeding the implementation of the UN resolutions on Kashmir and Palestine.
  5. Moves of the US President Donald Trump and the US ambassador to Israel David Friedman of aligning with the right wing parties in Israel were undermining the peaceful solution of the Middle East crisis.
  6. Pakistan, while devising any policy on the issue, must keep in view the sentiments of the people about Palestine dispute and its potential implications for Kashmir dispute.
  7. There is a strong consensus among all the political parties in Pakistan regarding the Palestine issue. All support the two-state solution on the basis of pre-1967 borders.
  8. The deal is not likely to succeed as some major states are not taking parts along with the prime stakeholders of the conflict, the Palestine Authority.

Pakistan must, therefore, not abandon its long-held stance on the Palestinian issue, which is based on international law and the UN resolutions. If Pakistan joins its Arab friends in supporting ‘Deal of the Century’, then India may use this example of settling a dispute (currently on UN agenda) out of UN as a precedent in the case of Kashmir. The issue has the potential to widen the Gulf between the Muslim states and dilute the support for Palestine cause. Pakistan must, therefore, tread a careful path while devising its policy on the issue by remaining neutral in the Middle East crisis and insisting on adherence to international law and UN resolutions. Pakistan should not join any bloc as it would not serve its national interest.


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