Following the death of King Husayn and the accession of Abdullah II, the Clinton administration and the International Monetary Fund expressed their support for the new Jordanian ruler by committing $450 million in new aid on top of $225 million committed by the US earlier this year. The US is also increasing its annual grant to the Palestinian Authority from $100 to $400 million. Israel, on the other hand, will not receive the $1.2 billion it was promised at the October 1998 Wye summit. These financial measures are meant to sustain a Middle East peace process that has all but collapsed. King Husayn's death, the fall of Israel's Likud government, the scheduling of early Israeli elections and Israeli Prime Minister Netanyahu's decision to freeze implementation of the Wye accords have rendered progress in the peace process impossible for the foreseeable future. This has led to much speculation about the effects of political changes in Jordan and in Israel on the peace process. Such crystal ball-gazing obscures an underlying reality: the Oslo process was always unlikely to result in a just and stable resolution of the Palestinian-Israeli conflict.

The negotiations set in motion by the 1991 Madrid Conference and the 1993 Palestinian-Israeli Declaration of Principles (the Oslo Accords) did not occur because the PLO suddenly decided to pursue a diplomatic resolution to the conflict with Israel. That decision was unequivocally taken by the 19th session of the Palestine National Council, the highest body of the PLO, in Algiers in November 1988. The PLO had signaled its willingness to negotiate with Israel as early as the mid-1970s, but no Israeli government was interested in testing its intentions.

The collapse of the Soviet Union and the unchallenged hegemony of the United States in the Middle East after the 1991 Gulf War set the stage for the Madrid and Oslo negotiations. The Bush administration tried to consolidate its Gulf War achievements by removing a major potential source of regional instability--the Arab-Israeli conflict. Conditions were ripe for this effort because the PLO was politically weakened and diplomatically isolated as a result of opposing the US-led war against Iraq, although the PLO did not support Iraq's invasion of Kuwait. Furthermore, Israel, the PLO and the US all feared the growing strength of the radical Islamist organizations, HAMAS and Islamic Jihad. The Palestinian intifada, the popular uprising against Israel's occupation that erupted in December 1987, had demonstrated that Israel could not continue the low-cost occupation policies it had pursued since 1967. Israel's business elite was unwilling to pay the costs of further occupation. It sought instead to participate in Shimon Peres's vision of a "New Middle East" based on opening Arab markets to Israeli goods and services. This required a settlement of the conflict with the Palestinians.

The Oslo Declaration of Principles was not a peace treaty between Israel and the PLO. The DOP established a negotiating process without a defined outcome. Negotiations were to take place over a five year interim period during which Israel was to withdraw from "Gaza and Jericho first," and then unspecified parts of the West Bank. In exchange, the PLO recognized Israel and pledged to cooperate in suppressing terrorism. The May 1994 Cairo Agreement limited the extent of the initial Israeli withdrawal to about 65 percent the Gaza Strip, defined the extent of the Jericho area, established the Palestinian Authority as the governing body in the evacuated territories and inaugurated the interim period, which expires on May 4, 1999.

The September 1995 Taba Agreement (Oslo II) divided the West Bank into three areas. Israel withdrew from Area A, consisting of about three percent of the territory (the cities of Nablus, Jenin, Tulkarem, Qalqilya, Ramallah, Bethlehem and subsequently, in January 1997, 80 percent of Hebron) giving the Palestinians control of civil affairs and internal security. In area B, consisting of about 23 percent of the territory (including some 440 villages and their surrounding lands), the Palestinians are responsible for certain municipal functions, while joint Israeli-Palestinian patrols maintain internal security. Area C, consisting of about 74 percent of the territory including all of the 145 settlements and the new Jewish neighborhoods in and around East Jerusalem, remains under full Israeli control. The most important questions were postponed to final status talks. The agenda of those negotiations includes the borders and the nature of the Palestinian entity, the fate of Israeli settlers and settlements, the status of Jerusalem, the right of Palestinian refugees to return (either to the Palestinian entity, or to their abandoned homes in Israel), refugee compensation and water usage. Substantive final status talks have not yet begun and certainly will not be completed before the May 4, 1999 deadline.

The October 1988 Wye Accords defined a further Israeli withdrawal from an additional 13.1 percent of the West Bank. But Israel suspended implementation of these accords after withdrawing from only an additional two percent of the West Bank. The ongoing Israeli election campaign makes it unlikely that the accords will be implemented, if ever, until a new government is in place. Despite Shimon Peres's vision of the economic benefits of the Oslo process, economic and social conditions in the West Bank and Gaza Strip have deteriorated since 1993. Only about half of the $2.4 billion in foreign assistance promised to the Palestinian Authority during the five year interim period--less than Israel receives from the US in a single year--has been delivered. Between 1993 and 1995 Palestinian annual per capita GDP declined 14.2 percent, from $1,537 to $1,319.

From 1992 to 1996, when the Labor-MERETZ government was in office, the West Bank settler population expanded by 39 percent to 145,000. Only 16 percent of this growth was due to natural increase. The government constructed a vast network of bypass roads to provide easy access to the settlements, preparing the way for annexing several large settlement blocs. In East Jerusalem, the Jewish population grew by 22,000 to over 170,000, and the government authorized completion of 10,000 subsidized housing units begun under the previous Likud regime. In violation of international law and Oslo's principles Yitzhak Rabin and Shimon Peres reaffirmed Israel's annexation of East Jerusalem. According to the Israeli human rights group, B'Tselem, "Israel systematically violates human rights in the Occupied Territories in violation of the Oslo Agreements and in breach of its obligations under international human rights agreements" (Human Rights in the Occupied Territories Since the Oslo Accords, December 1996).

The advent of Benjamin Netanyahu's Likud government intensified Israeli actions aimed at predetermining the final status of the West Bank. In May 1997 Netanyahu leaked a map indicating that the Likud foresaw handing over to the Palestinians about 40 percent of the West Bank divided into four areas with no territorial contiguity. Ehud Barak and other Labor Party leaders acknowledge that they do not have a fundamental objection to the main outlines of this map. They propose to give the Palestinians an additional ten percent of the West Bank. The difference between Labor and Likud regarding the Oslo process is one of style rather than substance. Because Labor has had a less confrontational and smoother style, it has often been more effective in confiscating Palestinian lands and establishing new Jewish settlements on them.

Yasir Arafat and the Palestinian Authority also disregard human rights, democratic procedures and the rule of law to maintain their power. The Authority employs some 40,000 people in at least nine different security apparatuses whose spheres of competence and powers are purposefully undefined. Palestinian journalists, editors, political activists and human rights workers have been intimidated, arrested and tortured. At least ten prisoners have been killed in custody. Arafat ignores all resolutions of the Palestinian Legislative Council not to his liking and indefinitely postponed municipal elections because he fears that his preferred candidates will not prevail. Neither Israel nor the US have voiced serious concerns about the undemocratic character of the Palestinian Authority's regime. Arafat's undemocratic practices are considered helpful in controlling opponents of the Oslo process.

The main element of the Wye accords that is still operative is CIA coordination of Israeli and Palestinian security efforts. The Oslo process consigned Palestinians to an inferior status for at least the five-year interim period and established no countervailing mechanism to prevent Israel from taking unilateral measures to extend its domination indefinitely. The Declaration of Principles did not specify the establishment of a Palestinian state. Most importantly, it did not require Israel to seek a relationship of coexistence with the Palestinians on the basis of equality of status. The problems of this arrangement were to be resolved by enhanced capital investment, access to regional markets and expanded opportunities for profit. However, continuing Jewish settlement in East Jerusalem and the West Bank, land confiscations and the construction of bypass roads have undermined the economic promise of "New Middle East." The boundaries of potential Palestinian Bantustans are now clearly visible. Even if the Oslo process advances beyond the current impasse, the territorial basis for establishing a Palestinian state capable of exercising significant sovereign powers may no longer exist.