In international relations, whenever you hear the term "confidence-building measures," you can be sure that someone is trying to kick a can down the road. Israeli Prime Minister Benjamin "Bibi" Netanyahu has now promised to offer such measures to the Palestinians. He has also urged that everyone "calm down" about the diplomatic row between his government and the United States.
But this crisis hasn't been caused by just one event—the announcement, while Vice President Joe Biden was visiting Israel, to approve new Jewish housing units in East Jerusalem. It caps a year of increasingly strained relations between Washington and Tel Aviv. And while he's apologized for the ill-timed announcement, Netanyahu remains unyielding. In fact, the Israeli press has reported plans to build not merely the 1,600 units announced last week, but 50,000. "We will act according to the vital interests of the state of Israel," Netanyahu said last week.
What are those vital interests? If you have listened to Bibi Netanyahu over the past few years, it's clear what tops the list—Iran. In fact, the prime minister has described the Iranian threat as an existential one for Israel, and a grave one for the world. He sees combating it as the central challenge of our times. "We are faced with security challenges that no other country faces, and our need to provide a response to these is critical, and we are answering the call," Netanyahu told his Likud faction in May 2009. "These are not regular times. The danger is hurtling toward us. My job is first and foremost to ensure the future of the state of Israel."
But after watching Netanyahu's government over the past year, I have concluded that he is actually not serious about the Iranian threat. If tackling the rise of Iran were his paramount concern, would he have allowed a collapse in relations with the United States, the country whose military, political, and economic help is indispensable in confronting this challenge? If taking on Iran were his central preoccupation, wouldn't he have subordinated petty domestic considerations and done everything to bolster ties with the United States? Bibi likes to think of himself as Winston Churchill, warning the world of a gathering storm. But he should bear in mind that Churchill's single obsession during the late 1930s was to strengthen his alliance with the United States, whatever the costs, concessions, and compromises he had to make.
In a smart piece of analysis in Israel's Haaretz newspaper, Anshel Pfeffer, no fan of the Obama administration, writes, "When senior ministers or generals list Israel's defense priorities, there is always one point on which there exists total consensus: The alliance with the United States as the nation's greatest strategic asset, way above anything else. It is more crucial than the professionalism of the Israel Defense Forces, than the peace treaty with Egypt and even than the secret doomsday weapons that we may or may not have squirreled away somewhere…But [Netanyahu] has succeeded in one short year in power to plunge Israel's essential relationship with the United States to unheard of depths."
Iran's rise has also placed Israel in the unusual position of being on the same strategic side as the major Arab states, as well as the United States. Saudi Arabia, Egypt, and Jordan are all deeply worried about the hegemonic ambitions of Iran, particularly if it obtains nuclear weapons. A core Israeli objective should be to strengthen this tacit alliance. What the moderate Arab states ask for, again and again, publicly and privately, is that Israel make some progress—even if only for appearances' sake—on the peace process. The single biggest challenge for these countries is that Iran has appropriated the Palestinian cause, which makes it difficult for, say, the Egyptian government to take a public stand that is hostile to Tehran. Lowering the temperature on this issue would benefit the Arab states, strengthen their will to stand up against Iran, and contribute directly to Israeli security.
But Israel right now appears to be largely unconcerned about the dangers that gather, or at least unwilling to make any real concessions to deal with them. And on first glance, it's easy to be sanguine. The construction of the security barrier between Israel and the Palestinian West Bank has largely solved the day-to-day problem of terrorism for Israel. (I was one of the first American commentators to write in support of Ariel Sharon's decision to build the wall because it would put to an end the Palestinian fantasy that they could achieve anything meaningful through terrorism.) Israel's war with Lebanon and its devastating attack on Gaza have crippled the military arms of its two adversaries, Hizbullah and Hamas.
Israel's economy is booming. Economic reforms, many of them championed by Netanyahu when he was finance minister between 2003 and 2005, have accelerated an entrepreneurial revolution in the country. Wise monetary policy—Israel's central banker is the former MIT economist Stanley Fischer—has stabilized the country's broader economy. The result has been dramatic. Israel was growing in the 5 percent range before the global economic crisis and it shrank only slightly in 2009, even when almost all the world's economies plummeted. Israel has become a rich country, with a median income around $37,000 (adjusted for purchasing power), which is higher than Singapore, Hong Kong, Ireland, and some U.S. states, and just below the United Kingdom and Switzerland. As Dan Senor and Saul Singer point out in their book, Start-Up Nation, Israel has more companies listed on the NASDAQ than any country other than the United States—more than China or India or Britain.
This is great news and proof of the capacity, talent, and drive of Israelis. But it is also lulling the country into a false sense of complacency. Israel continues to live in a terrible strategic environment, with radical groups eager to combat it, most of its neighbors unwilling even to recognize its existence, and a broader world that is increasingly dismayed by or hostile toward it.
Many of these problems and attitudes stem from a deep-seated rejection of Israel. But much has changed in that regard. The Arab states have had to accept that their goal of defeating Israel has crumbled. Over the past decade, in various public forums, Arab statesmen led by King Abdullah of Saudi Arabia have declared that they would be willing to normalize relations with Israel if the Palestinian problem were resolved. The Palestinians in the West Bank have extremely good leadership, with President Mahmoud Abbas committed to a peaceful path to a two-state solution and Prime Minister Salam Fayyad committed to a competent, clean, and effective Palestinian government that focuses on economic growth, not violence. Yes, there are problems—Hamas being the central one—but compared with any previous point in their history, the Palestinians are being led wisely.
Meanwhile, the central problem persists: Israel rules more than 3 million Palestinians who will never become citizens of Israel and yet do not have their own state. As they multiply, Israel's status as a democracy becomes more and more complex; the country looks more and more like an island of rich Israelis set in a sea of Palestinian serfs. If gradually the two-state solution becomes impossible to implement—because of Israeli settlements, Palestinian rejectionism, whatever—Israel's own Arab population will threaten the state's Jewish character, and be even further radicalized. Israel will be left with only the institutions of government, having undermined both its democracy and its Jewish character.
The traditional threats also persist. Hizbullah's rockets will gain range and power; explosives and chemicals will become easier to deploy; terrorists will eventually be able to breach high walls and strong air defenses. Israel has adopted a purely military response to these security threats but throughout history, the most durable security has come from political arrangements that reduce or eliminate external threats.
Bibi Netanyahu makes bold speeches about protecting Israel but when it comes time to act, he has cobbled together a coalition of extreme parties, made concessions to them on crucial issues, given them free rein to undermine Israel's broader security, and pandered to his public's most populist instincts—all to ensure than he can sit in the prime minister's chair. Little that Netanyahu has done suggests he has prioritized the Iranian threat—or these deeper, long-term threats—and made difficult decisions to address them. Forget Winston Churchill, Bibi Netanyahu looks more like a local ward boss, concerned only with keeping himself in power while the dangers to Israel mount from all sides.