A week of fateful decisions for Prime Minister Netanyahu - analysis

At the beginning of the week, IDF the Chief of the General Staff Lt.-Gen. Herzi Halevi, the head of the Shin-Bet, and Israel’s other security heads warned Prime Minister Benjamin Netanyahu that the chances of an outbreak of a third intifada in the West Bank are increasing. There are several contributing factors to the growing unrest in the area. Hamas and the Islamic Jihad are developing a significant terrorist infrastructure in Judea and Samaria and would like nothing better than to extend the atrocities committed by Hamas in Gaza to the West Bank. As public opinion polls demonstrated, the Palestinians in the West Bank wholeheartedly supported the Hamas attacks on October 7.

Another reason to be concerned about unrest in Judea and Samaria is the fact that since October 7, most West Bank Palestinians can no longer receive permits to work inside Israel for security reasons. Prior to Hamas’s attack on October 7, some 150,000 Palestinian workers from the West Bank were permitted to work in Israel.

Furthermore, Israel has withheld the transfer of $275 million in Palestinian tax revenues on goods transferred to the Palestinian Authority that it collects on the PA’s behalf. Some of the tax revenues that enter the PA are used for its notorious ‘pay for slay’ policy, in which families of convicted terrorists receive generous monthly stipends.

Tuesday, Finance Minister Bezalel Smotrich told US Secretary of State Antony Blinken: “We will not transfer a shekel to the Palestinian Authority that will go to the families of the Nazis in Gaza.”

While some might be tempted to compare the West Bank Palestinians’ wish to return to work in Israel to the requests before October 7 to allow more Gazans to work in Israel, these comparisons are not entirely accurate. Israel did not have boots on the ground in Gaza and had no security control of the area. By contrast, Israel has full military and security control over Area B in the West Bank, as well as significant intelligence sources there, and works in close cooperation with PA forces in the area.

The conclusion is clear. Netanyahu is facing a serious dilemma on this issue. Historically, he was a prime minister who has been attentive to security assessments in the field. Furthermore, he understands that a thriving economy is a necessity for maintaining peace and stability in the region.

Yet, for the current government, which includes the extreme right-wing Religious Zionist Party, which holds 14 seats and is headed by Smotrich and Itamar Ben-Gvir, the latter being the minister of national security and leader of the party’s Otzma Yehudit faction, allowing Palestinians from the West Bank to work in Israel and transferring the tax revenues to the PA is a dead end.

Smotrich has the operative ability to block the transfer of these tax revenues. Should Netanyahu agree to either of these proposals, it is likely that Smotrich and Ben-Gvir would bring down the government, leading to new elections.Netanyahu would find it difficult to rely on Gantz remaining in the national unity government.

Before the outbreak of the war on October 7, the current coalition, headed by Netanyahu, held 64 of the 120 seats of the Knesset. When the war started, the National Unity Party, which has 12 seats in the Knesset and is headed by Benny Gantz, joined the national unity government.

Should the Religious Zionist Party leave the government, taking its 14 seats with it, Netanyahu could theoretically retain control because he would still have the National Unity Party, headed by Benny Gantz, with its 12 seats. So, the coalition would still have a majority, albeit with 62 seats instead of 64.

Yet even this is no guarantee for Netanyahu, given that Gantz has not provided any assurances as to how long he will remain in the government. When he joined, he said: “As long as the war continues, I will stay to help save Israel.” But what happens at the war’s end?

Moreover, according to the agreement between Netanyahu and Gantz, bills or government decisions that are non-war-related will not be promoted during the war. Netanyahu therefore would find it difficult to rely on Gantz remaining in the national unity government.

Netanyahu under immense pressure

Netanyahu is under intense pressure to be pragmatic and compromise on the issues of tax revenues and West Bank Palestinians entering Israel.

Notably, in addition to the warning from Israeli security forces, Blinken is pressuring Netanyahu to give in. The Americans also understand that a third intifada waits right around the corner if nothing is done.

I believe that there is a slim majority both in the war cabinet and in the regular cabinet to free the tax revenues and allow Palestinian workers from the West Bank entry. This means that Netanyahu will have to work hard not only to convince extremists from the Religious Zionist Party but also to win over skeptical members of his own Likud party. This will not be a simple task, as a number of Likud leaders are not ideologically distant from Ben-Gvir and Smotrich.

ANOTHER SIGNIFICANT factor that may serve to prevent the entry of Palestinians into Israel is Israeli public opinion. After October 7, most Israeli Jews are not likely to want Palestinian employees from the West Bank in their homes. Building supervisors do not want them at building sites either, and restaurant owners will not hire them.

There are also warnings regarding potential terrorist attacks. Given all of these complexities, it will be interesting to see what Netanyahu decides. I believe that the combination of the security issues raised by the army and American pressure will persuade him, at the very least, to agree to the transfer of tax revenues to the Palestinian Authority.

During his visit this week, Blinken spread hints about the possibility of normalization with Saudi Arabia, discussing American-Israeli cooperation on the ‘day after’ the war concludes, and making assurances of US contributions to help Israel retain stability in the face of foreign threats.

In addition to trying to convince Netanyahu to address the financial crisis in the West Bank, Blinken has been pushing the prime minister to reduce the level of fighting in Gaza. The US would like to see the war come to an end and wants to see the continuation of the process towards the creation of a Palestinian state.

In the North, the Americans want Israel to reach some type of diplomatic solution with Hezbollah to avoid a major war. A premature resolution of these conflicts would present a significant dilemma for the prime minister. More than 125,000 people from Israel’s northern and southern communities have been evacuated, and neither group will agree to return to their homes until the threats from Hezbollah in the north and Hamas in the south have ended.

This means that Israel will likely continue to fight aggressively to remove the threats from its northern and southern borders. People in Israel today do not put much stock in diplomatic solutions, and the Israeli public is determined to continue until Hamas is defeated. It will be difficult to convince those who have been evacuated from their homes to return unless the enemy has been neutralized.

Heading Netanyahu’s list of dilemmas is the hostage crisis. They have been held captive in Gaza for nearly 100 days. Evidence is mounting of torture and sexual abuse, and the nightmare continues to be lived on a daily basis. What are the terms that Israel can agree to for a further ceasefire and release of prisoners? Can Israel sacrifice its war goals in order to arrange for their release?

Like the other subjects covered in this week’s column, this is a complex dilemma with no easy answers.

Stability at Israel’s northern border and a solution for the ‘day after’ in Gaza are crucial for the normalization of relations between Israel and Saudi Arabia. While the opening of diplomatic relations would be a game-changer for the Middle East, the price would be acceptance of a two-state solution and a Palestinian state on Israel’s doorstep.

Under the current circumstances, with unrest in the West Bank, a war in the South, a mini-war in the North, and an unstable political situation, it is impossible for the prime minister to pay this price.

Additionally, public opinion in Israel is solidly opposed to any two-state solution at this time. The atrocities committed by Hamas have left most Israelis feeling that there is no Palestinian partner for peace.

If Netanyahu could increase the collaboration with Gantz beyond a wartime coalition, it is possible that they could succeed not only in war, but in peace. But does Netanyahu have this ability? For that matter, does Gantz and his National Unity Party have what is necessary to do this? If the two could work out these issues and neutralize the extreme right-wing forces in the current government, Israel could open diplomatic relations with Saudi Arabia, which would be a major accomplishment.

Currently, Smotrich and Ben-Gvir present a warning signal for Arab countries. Most of the Arab leadership is concerned about these men’s extremist tendencies, especially Ben-Gvir’s, and Arab leaders are concerned that at any time, he may go to the Temple Mount, causing major damage to the region with his reckless behavior.

The aforementioned issues present a major set of dilemmas for Netanyahu this week. Decisions will need to be made, and American pressure can be unrelenting. Nevertheless, there is a ray of light. From the difficult fighting and the losses of October 7, we can raise new avenues of peace and stability.

Since the outset of the war, I have said that this conflict is not only a war for Israel but for moderate Arab nations. Combating and defeating terror can lead to stability, prosperity, and a promising future for the children of the Middle East. It will be complicated, it will require compromise, but it can be done.

As the Israel-Hamas war enters a new phase, with over three months of fighting and many more to go, we must hold onto hope that the time ahead will be one marked by peace and progress instead of fear and bloodshed. It is incumbent on decision-makers in Israel and around the world to ensure that the postwar reality will be marked by opportunity and hope for Jews and Muslims in the region alike.