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From left: Egypt's Hosni Mubarak, Israeli Prime Minister Benjamin Netanyahu, US President Barack Obama, Palestinian President Mahmoud Abbas and Jordan's King Abdullah (AFP) 

No one believes that Arab-Israeli direct talks are likely to lead to a viable peace deal since none of the preconditions for one are in place. Hamas still controls Gaza and tosses Fatah loyalists off of rooftops. Jerusalem is either a Palestinian capital or an undivided Israeli one. Religious-nationalist settlements in the West Bank are due to renew their "natural growth" at the end of the month. Palestinians demand that all refugees of the 1948 and 1967 wars, and their descendants, be allowed back into what is now the State of Israel. Given this dour climate for rapprochement, one would be forgiven for not taking notice of the substantive if prosaic achievements that these negotiations may yet yield, namely, those fixed around furthering Palestinian Prime Minister Salam Fayyad's state-building efforts in the West Bank.

A year ago, Fayyad introduced a two-year plan for laying down the armature of a future Palestinian state with an emphasis on economic development, security and bureaucratic housecleaning. The goal was to end the corrupt, Tammany-style system of patronage that formerly defined the Palestinian Authority under Yasser Arafat and create transparent and accountable institutions beholden to no one party, particularly Fatah. Not only were these the necessary preconditions for a functioning democracy, Fayyad reasoned, but they were also indispensable indicators of financial health and stability necessary for luring foreign capital. Halfway through, Fayyad's two year-program is working.

The West Bank economy, according to the International Monetary Fund, grew 8.5 percent last year despite a global recession and ongoing military occupation. Nablus, formerly a flashpoint in the second intifada, is today home to a burgeoning marketplace of imported luxury goods and a brand new cinema featuring the latest Hollywood blockbusters. An older movie house in Jenin, another memorable locus for Arab-Israeli violence, reopened last month after being shuttered for twenty years and just in time for a three-day film festival. Ramallah, the de facto Palestinian capital, is undergoing both a cultural renaissance as well as a housing boom, with apartments in well-off neighborhoods now selling for as much as $200,000 each. The trendy Jordanian cafe-restaurant chain Tche Tche has unveiled a branch in Ramallah, and a 5-star Movenpick hotel is set to open this month.  

Close to 1,300 new building licenses were issued by the Palestinian Authority (PA) in 2009, signaling that dramatic construction in the West Bank doesn't just occur in settlements. A Qatari-Palestinian real estate company has recently broken ground on Rawabi, the West Bank's first planned city, located about 6 miles outside of Ramallah and designed as a high-tech suburb with business and commercial districts, a manmade forest and a 5,000-unit residential bloc that spans 23 distinct neighborhoods. To aid Palestinian home ownership, a new PA-sponsored mortgage fund, valued at $500 million, is set to launch later this year. 

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