TEL AVIV, Israel — Secretary of State John Kerry said Tuesday that Israeli and Palestinian officials had agreed on a plan to boost the dismal economy of the West Bank, the first concrete measure to emerge from an ambitious new U.S.-led push to restart peace talks after a four-year deadlock.
Kerry said the plan called for moving very rapidly toward business expansion and private investment in the West Bank, though he declined to get into specifics, saying he didnt want the developing framework to come out piecemeal. He said that multiple U.S. government financial institutions, including the Overseas Private Investment Corp., the Export-Import Bank of the United States and the State Departments Agency for International Development, would be involved, along with private corporations and European allies.
Kerrys plans are likely to involve changes in Area C of the West Bank, where Israel has full civil and security control despite it being an area shared by Israelis and Palestinians. In recent years, Israeli authorities have delayed Palestinian-backed construction and tourism projects.
Kerry said the initiative would address the bottlenecks and barriers to doing business in the West Bank.
Economic growth will help us be able to provide a climate, if you will, an atmosphere, within which people have greater confidence about moving forward, Kerry told a news conference in Tel Aviv that wrapped up three days of meetings with Palestinian and Israeli leaders.
Kerrys trip to the Middle East at first appeared to be an afterthought, tacked on at the last minute to an itinerary that focused on a G-8 foreign ministers conference in London and his first trip to Asia as secretary. Instead, Kerry unveiled what he called a quiet strategy toward setting conditions for an Israeli-Palestinian peace agreement, a risky move that tethers the new secretary to a conflict thats bedeviled successive U.S. administrations.
This is the Obama administrations first serious consideration of the conflict. First-term Secretary of State Hillary Clinton shied away from tackling it and was preoccupied with the Arab Spring revolts, while Middle East envoy George Mitchell resigned in 2011 after failing to make any headway on the issue.
This effort has been dogged by good intentions and failed efforts at one time or another for a lot of reasons, Kerry said. I think weve all had enough time to analyze those reasons and understand some of the lessons we need to learn in trying to go forward now.
Still, perhaps keenly aware of the outcomes potential to shape his legacy, Kerry emphasized several times during his visit that he understood the complexities of the conflict, and he cautioned against too much optimism.
The president has not sent me here to propose or impose an American plan or to dictate to anybody the way forward, he said. Ultimately, this negotiation is between the state of Israel and the Palestinian Authority. We are not naive about the challenges before us, but we believe very deeply that it is our duty to give every effort we can.
Delving into the Middle Easts oldest conflict just a couple of months into his job would seem especially perilous for Kerry, who already has a full set of concerns with the bloody stalemate in Syria, an Iran with nuclear ambitions and an increasingly bellicose North Korea. However, analysts said, the administrations gamble is based on the rapid changes the Middle East has undergone two years into the Arab Spring rebellions.
The Arab demand for self-determination has seeped into the Palestinian territories, sowing unrest in the Fatah-administered West Bank and in the Gaza Strip, which is controlled by the militant group Hamas. The latter is an offshoot of the Muslim Brotherhood, the conservative Islamist group whose members now rule Egypt and Tunisia, are very active in Libyan politics and are among the exiled Syrian opposition that seeks to rule if the regime of President Bashar Assad falls. They have deep-pocketed backers in Qatar and other Persian Gulf nations.
Hamas, widely regarded as ascendant at a time when Fatah appears old guard, left its longtime base in Syria, broke from its patrons in Iran and seems to be moving slowly toward the mainstream Arab fold. Yet it still hasnt reconciled with the rival Fatah, much to the relief of Western negotiators, who are worried that the new U.S. push would collapse if the Palestinian side included Hamas, which the U.S. and Israel consider a terrorist organization.
"The Palestinians are still divided, and that will continue to be a big elephant in the room. We foresee it being a major barrier to real progress," said one Israeli official involved in talks who spoke only on the condition of anonymity because of the political sensitivity of the issue. "Then there is the bigger question of whether or not the Americans can get the Arab world interested at a time where instability has threatened a lot of the regions old guard, and they might be afraid of change."
Israeli and Palestinian officials have confirmed that Kerrys diplomatic push is based on dusting off the Arab Peace Initiative, an 11-year-old regional plan that would see normalized relations between Israel and the Arab world and a final status agreement for a Palestinian state.
Palestinian officials said that while they were hopeful that the Arab world would take a more active role in the talks, especially Jordan, which had been a major backer of the original Arab Peace Initiative, they were skeptical that Israel would make the necessary concessions.
Speaking at a background briefing, senior Palestinian officials were doubtful that the current Israeli government was suited to peace negotiations.
"Even if Netanyahu had all the good intentions in the world and we dont think he does we dont think the people in his government would give him the support he would need during negotiations," one official in Ramallah said.
Last month, Prime Minister Benjamin Netanyahu swore in his new government, which includes Jewish Home, a staunchly pro-settlement party. During coalition talks, Netanyahu agreed to make Jewish Home leader Naftali Bennett the head of the Industry and Trade Ministry. Bennett, whos spoken openly about doubling the number of Jewish settlers in the West Bank, has said he wouldnt support freezing settlement construction or removing settlements.
Israels new housing minister, Uri Ariel, is himself a settler in Kfar Adumim. Ariel once headed an organization that oversaw the building and financing of new Jewish communities in the West Bank. Hes already said that adding housing projects in the settlements would be among his priorities in office.
"We may be sitting at a table with Netanyahu and (Justice Minister Tzipi) Livni, but if behind the table a group of ministers is pushing settlement expansion, how can the talks be productive?" asked the Palestinian official, who couldnt be identified under the conditions of the briefing.
Frenkel is a McClatchy special correspondent. Twitter: @hannahallam, @sheeraf