Jerusalem, Refugees Hinder Mideast Peace*

By STEVEN GUTKIN
The Associated Press
Wednesday, November 28, 2007; 1:18 PM

JERUSALEM -- If Israelis and Palestinians have any hope of achieving
their stated goal of signing a final peace treaty within a year, they
may have to slice Jerusalem in half with a wall, come up with $85
billion for Palestinian refugees and figure out how to wrest control of
the Gaza Strip from Hamas.

They'll also have to agree on which territory Israel should give to a
future Palestine in exchange for being allowed to keep major settlement
blocs in the West Bank. And if they decide not to divide Jerusalem,
they'll have to determine how to share it while avoiding the potential
security nightmare of an open border.

These are just some of the excruciating challenges faced by Israeli and
Palestinian negotiators as they begin discussions Dec. 12 on how to end
their century-old conflict _ as agreed upon Tuesday at a U.S.-hosted
Mideast peace summit in Annapolis, Md.

The Palestinians want to establish an independent state in the West
Bank, Gaza Strip and east Jerusalem _ areas that Israel captured in the
1967 Mideast war.

Of all the obstacles to a peace deal, none looms larger than Jerusalem _
the city at the heart of the Israeli-Palestinian conflict, with its holy
sites of such enormous importance to Muslims, Jews and Christians.

Past peace negotiations have made it clear that the city will have to
serve as the capital of both Israel and a future Palestine.

But that raises more questions than it answers. How can you transfer
east Jerusalem to Palestinian sovereignty without stripping its
residents of Israeli social security benefits, for instance, or how can
Israelis and Palestinians each have access to the city but not the
other's country?

"The Palestinian vision of Jerusalem is what they call an 'open city,'
with access to all parts," said Yitzhak Reiter, head of the Truman
Institute think tank in Jerusalem. "From an Israeli perspective, this is
a problem, because there would be no 'hard borders' between Palestine
and Israel."

Most Israelis and Palestinians do not want to divide the city, like the
way it was before Israel captured its eastern sector in 1967. However,
security concerns may require just that _ unless the sides can come up
with an alternative such as erecting checkpoints at all roads leading
out of Jerusalem to keep Palestinian militants from entering Israeli cities.

But there's an even thornier issue _ how to share the emotionally
charged Jerusalem holy site known to Muslims as the Noble Sanctuary and
to Jews as the Temple Mount. As the site contains a Muslim shrine built
on the remains of a Jewish one, a solution will almost certainly require
an international presence to administer jurisdiction.

Another major hurdle facing the negotiators is the issue of refugees.

The Palestinians want refugees and their descendants to be able to
return to homes they left, or were forced out of, in the 1948 war that
accompanied Israel's creation. The demand is a deal breaker for
Israelis, who sees it as a threat to their country's Jewish character.

In the end, it seems the Palestinians will have little choice but to
give up their dream of returning home. But that still leaves open the
question of whether Israel will meet Palestinian demands that it
acknowledge responsibility for the refugees' plight.

A recent report by the Aix Group, a gathering of Israeli, Palestinian
and international economists, estimated the total cost of resettling and
compensating Palestinian refugees and their descendants _ a necessary
element of any peace deal _ would be between $55 billion and $85 billion
over 10 years. It's far from clear where such an enormous sum would come
from.

Israelis and Palestinians will also need to draw their future border.
The formula worked out in previous negotiations called for a Palestinian
state in the lines that existed before the 1967 war, with some
modifications. Israel would be allowed to maintain most of its so-called
settlement blocs _ where most of its West Bank settlers reside _ in
exchange for giving the Palestinians territory inside Israel.

It won't be an easy swap. The Palestinians will surely demand Israeli
territory of equal size and value to the land they're giving up for the
settlements.

 From the Israeli perspective, security is the biggest obstacle to peace
_ especially considering Palestinian President Mahmoud Abbas' poor track
record in establishing law and order.

Israel may eventually sign a treaty. But it will not uproot tens of
thousands of settlers and hand over territory to the Palestinians unless
it can be assured that the evacuated land won't be used as launching
grounds for attacks _ as happened after Israel withdrew from the Gaza
Strip in 2005.

Israel will also likely insist on continued control of the airspace
above a Palestinian state, that such a state not have an army and that
Israel maintain a military presence in strategically sensitive areas of
the West Bank. The Palestinians will not easily accept any of these demands.

The two sides agreed at Annapolis to use the so-called road map peace
plan as a guide for negotiations, with its key requirements that Israel
stop expanding West Bank settlements and that the Palestinians rein in
militants.

Israel insists that stopping violence from Gaza must be part of the
Palestinians' obligations. It's not clear how Abbas could accomplish
this, with Hamas in control of the coastal territory after having routed
Abbas' forces there in June.

Israel and the West are hoping to weaken Hamas' hold on Gaza by propping
up Abbas in the West Bank. They may also seek to co-opt Syria, a key
backer of Hamas, in an effort to neutralize the Islamic militants. Syria
was among the 16 Arab countries participating in this week's summit.

Hamas already appears to be running into trouble in Gaza amid a
devastating international boycott, and on Wednesday a senior Hamas
official said his group might be willing to cooperate with Abbas.

Still, it will be extremely difficult for Abbas to make peace with
Israel as long as he controls only part of his territory.

"He can negotiate. He cannot deliver," said Israeli political analyst
Yossi Alpher.

____

Steven Gutkin is the AP's bureau chief for Israel and the Palestinian
territories.

___

Associated Press writer Regan E. Doherty contributed to this report from
Jerusalem.