Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

In a recent column in The New York Times, Thomas Friedman reflected on the strong Israeli economy, quoting a recent survey that put the number of Israeli millionaires at 8,419.

Such a figure is testimony to the successes of entrepreneurs who transformed Israel’s economy into one worthy of membership in the Organization for Economic Cooperation and Development. However, what Friedman didn’t mention is that Arab Israelis, who represent over one-fifth of the Israeli population, are virtually absent from this enviable list. Indeed, the growth of the economy has widened the gap economically and socially between Jewish and non-Jewish Israelis.

This is alarming. If unchecked, it has the potential to create social unrest reminiscent of the 1960s American civil rights era. As Israelis get richer, the average Arab Israeli is feeling left behind. This gap is the byproduct of Israeli policies that under-allocate resources to Arab towns and municipalities. Per capita expenditure on Israeli Arabs and their neighborhoods – schools, roads, water, vocational training – is far less than those allocated to Jewish citizens, for example.

Marwan Muasher, the Jordanian politician and Jordan’s first ambassador to Israel, spent good quality time reaching out to Arab Israelis. In his book, “The Arab Center, Muasher empathized with their ordeal.” “Unfortunately, both the Arab world and Israel treated them with suspicion, with Arabs looking at them as traitors and Israel viewing them as a fifth column inside the Jewish state,” Muasher wrote. Though ethnically Arabs, with what we can call a “Hebrew” identity, Arab Israelis feel in limbo – rejected by the Arab world and marginalized by the Israeli majority, knowing that, according to a poll conducted by Haifa University’s Sami Smooha, 45 percent of Israeli Arabs feel closer to Israelis than to the Palestinians in the West Bank and Gaza.

Arabs have been an integral part of Israel since its creation in 1948. Though a majority of them speak Hebrew well, they sense resentment from the Jewish majority. In Haifa University’s recent annual “Index of Arab-Jewish Relations,” the data reflects a continuation of some hostility among the Jewish majority: For example, only 66.9 percent of Jewish Israelis support preserving the right of Arab citizens to vote.

Growing up as an Arab Israeli is becoming increasingly challenging and Israeli government policies have slowed the integration of Arabs into Israeli society. The Israeli armed forces act as a social equalizer where all Israelis from different socio-economic groups blend together for a period of two years. Many networks and friendships are forged then. Yet, Arab Israelis, once completely exempt and now discouraged from military service, are absent from key civil service jobs, despite the fact that 75 percent of them between the ages of 16 and 22 support voluntary national service; and 68 percent would be willing to live in a Jewish neighborhood. Could this be the source of a third intifada from within?

Bernard Avishai, the Israeli author and blogger, has argued that there are similarities between the current situation in Israel and the situation that existed in Bosnia in the 1980s. Avishai states that when foreigners visited Sarajevo in 1984, it was so serene that very few sensed the conflicts brewing beneath the surface and could foresee the potential for outbreak of the civil war and the subsequent tragedies that engulfed Bosnia. Avishai suggested that as in Sarajevo, there is tension brewing from within the Arab Israeli community. He contended that the next intifada would not likely come from the West Bank and Gaza, but rather from within the Arab Israeli community, where citizens are frustrated with their second-class status. There is a time bomb waiting to explode. The Israeli government must work to diffuse before it too late.

The controversial separation wall in the West Bank erected by the Israeli government is viewed as a means of separating Palestinians from Israel. The ultimate goal is to inject tranquility into the country. But how will Israel quell Arab Israeli dissatisfaction from brewing over into unrest at a time when the community’s numbers are swelling and conditions are festering? There is no wall that can separate Jewish and Arab Israelis.

For decades, Israel has fought external wars and persevered. However, internal social unrest is something that the country may not be ready to manage in a way that respects its own image and definition as a democratic nation. The long-term stability of Israel will rest on its future integration, both socially and economically. There is an urgent need to address the conditions of the Arab Israelis. Time is running out.

Raja Kamal is senior associate dean at the Harris School for Public Policy Studies at the University of Chicago. He wrote this commentary for THE DAILY STAR.

The United States Congress will soon debate the decision of the Bush administration to sell $20 billion in sophisticated weapons to several Arab countries. This package is being presented by the White House as a way of promoting stability in a Middle East threatened by Iran's ambitions and the rise of terrorism. Congress should flatly decline the sale on the grounds that arming the Arab world is neither in the best interest of the region nor that of the US in the long run.

A lack of stability seems to dominate the Middle East. Every corner of the Arab world represents different sets of growing dilemmas. Economic stagnation, the rise of fundamentalism, terrorism, and the erosion of personal liberties are among the pressing issues. Despite the record rise in the price of oil, the economic wellbeing of most Arabs is worsening.

If oil and natural gas were excluded from the various economies of the Arab states, which have an estimated 350 million inhabitants, their cumulative gross domestic product would amount to less than that of Finland, a country with a population of a little over 5 million. With the exception of a few isolated pockets, the Arab world has failed miserably in catching up with the economic growth visible in most other corners of the world. It certainly does not need an infusion of armaments that will trigger a regional arms race and further destabilization.

Beyond the proposed sales of the Bush administration, other states are also escalating the arms buildup. The French are pursuing a $400 million arms sale to Libya; the Russians are negotiating a record deal with Algeria and continue to explore sales to Iran. This comes at a time when tension is peaking in the Middle East.

A fundamental question is why the region needs additional sophisticated weaponry. Who would the recipient countries be fighting? Iran? Not likely. Nor is it in Iran's best interest to militarily confront Saudi Arabia, Kuwait or the United Arab Emirates. The US and other Western countries would not allow this to happen and Iran knows it. What Iran is able and willing to do is to support militant movements that will create unrest throughout the Arab world. Iraq and Lebanon are cases in point.

Those proposed weapons sales are the wrong tool to combat militant movements in these countries. The real threat that many Arab countries are facing is domestic religious extremism and militant terrorism. Buying $20 billion or $100 billion worth of the most modern weaponry on the market will not make violent extremism go away. Reforming the educational system and allowing the market to flourish will. Trade should be freed, rights protected, and education modernized. Arab universities have consistently produced graduates who have difficulty finding a place in the global economy. Those unemployed graduates are resentful and hopeless and become ideal targets for recruitment by extremist groups.

There is a desperate need for educational policy changes that will allow future citizens to compete effectively in the global arena - changes that are based on a sound educational system that will put math and science, rather than religious studies, at the center of the curriculum. Arab students should learn how to think instead of what to think.

These are troubling times in the Middle East. Selling new weaponry will only add fuel to an explosive situation. Historically, the US Congress has questioned and occasionally opposed the sale of weapons to Arab nations on the ground that it may endanger Israel's existence. Debates on arms sales served as political venues for many members of Congress to voice their support for Israel - even as they knew that Israel was never really in danger. This time, Congress should block the sale because it is the right thing to do. Arabs need serious help as they face up to pressing social and educational challenges. Weapons should not be part of that package.

A fundamental question faces those seeking to calm the latest round of conflict in the Palestinian territories. How is it possible for Hamas to emerge as a power broker when regional and international communities are opposing them?

Primary attention focuses on the gruesome daily quality of life plaguing the Palestinians, and the tenuous political hopelessness consuming them.

The rise of Hamas is a direct result of the distinct failure of Palestinian President Mahmoud Abbas and his predecessor, Yasser Arafat, to negotiate and deliver a better life for their people centered on solid economic grounds.

The failure is a combination of incompetent government entrenched in corruption and Israel's failure to support and promote the legitimacy of the Palestinian Authority. The result generated a distrust and hopelessness that eventually facilitated the rise of Hamas to power.

As we reflect on the 40th anniversary of the Arab-Israeli Six-Day War, we are reminded of the continued deterioration of the economic conditions of the Palestinian territories. In 1968, an average Israeli citizen was 10 times wealthier than an average Palestinian in the then-newly occupied West Bank and Gaza. Today, the Israeli gross domestic product per capita is more than 20 times that of the Palestinians. More than 60 percent of the Palestinians are below the poverty line.

In Gaza, the epicenter of the recent conflict, the situation is worst. In a recent International Monetary Fund and World Bank report, 75 percent of Gazans were considered poor, with more than 40 percent unemployment. Unlike the prosperous Israeli economy, the Palestinian economy has failed to gain traction. The dire situation may be partly explained by the economic and geographic closure of the Gaza Strip -- one of the most densely populated places in the world.

The economic gap between Israel and the Palestinian Authority is projected to grow. This economic disparity has contributed to the fostering of bitter hopelessness on a deeply personal level among Palestinian youths, igniting the emotions that fuel violence -- making them a natural target for recruitment in militant organizations such as Hamas.

Perhaps the last golden opportunity was in the '70s and '80s when Israel totally controlled the West Bank and Gaza. Israel should have invested adequate resources in the Palestinian economy with an objective to raise the economic standards of Palestinians. This wise investment would have yielded a comparative advantage to both people. Focused economic and developmental incentives would have improved life and generated substantial improvements in the standard of living. Economic well-being is the best weapon to counter militancy and Islamic fundamentalism. Perhaps Warren Buffet and others would have invested not only in Israel, but in Ramallah, Hebron and yes, even Gaza.

The most reassuring source of hope and normalcy for Palestinians will emerge from jump-starting the economic machine that has been grounded to a dangerously lethargic pace.

This will be the greatest weapon that will marginalize Hamas from within.

Palestinians will need to understand that a stable homeland will rest on two essential variables: law and order plus a sound and transparent economy. They need international assistance in both -- immediately.

President Mahmoud Abbas has dissolved the Hamas-led Cabinet and declared an emergency government. It is imperative that the international community reach out and help him. Massive aid is urgently needed to ensure his survival. Hamas must not be allowed to be strengthened. As Hamas emerges as a militant, uncompromising group, the global community must help the Palestinian Authority deal with it. Reluctance may prove regressive, dangerous, and costly.

The economic success of Israel between 1950 and 1965 was largely due to a substantial influx of foreign capital -- mainly from the U.S. -- that allowed the nation to invest in domestic programs. The aid amounted in some years to almost 25 percent more than its own gross national product. This made possible substantial investment programs that kept pace with the rising immigrant population and expansion of the economy. Palestinians require now the same capital infusion that will allow them to develop and mature their economy and create badly needed jobs. The alternatives are dim.

Bad news continues to emerge from the Middle East. The belligerence of Hamas is a dangerous phenomenon. It has the potential to destabilize the region in the short run and delay a solution for the Palestinian-Israeli conflict in the long run. Ensuring a solid economy is of paramount importance. This will restore even the smallest sense of hope and future.

A cease-fire is finally here. The global community has successfully brokered an overdue end to the tragic war between Israel and Hezbollah. Now that the dust is beginning to settle, we can begin to tally the winners and losers.

Although the Israeli military pounding of Lebanon during the last month has degraded Hezbollah's military capabilities, its leader, Sheik Hassan Nasrallah--at least in the short run--has emerged victorious. He fought and defied one of the best-equipped and trained armies in the world--something none of the traditional Arab armies have been able to do since the birth of modern Israel in 1948. Hezbollah managed to maintain (and in some cases increase) the frequency of the rocket attacks that paralyzed and stunned much of northern Israel. Nasrallah has gained admiration on the Arab streets and forced respect and political recognition by Middle Eastern leaders.

Nasrallah, who until recently was becoming increasingly marginalized for being out of touch with mainstream Lebanese politics, is now a major power broker in Lebanon--someone that U.S., Israeli and Arab governments may have to start to engage politically.

But Hezbollah and Nasrallah are not the only victors. Iran is also a winner. As a spiritual and financial backer of Hezbollah, Iran's investment has paid off.

Like Iraq, Iran is now entrenched in the political landscape of Lebanon. Since the regime change in Baghdad, Iran has been using Islam successfully to penetrate political boundaries in the region. Lebanon's Shiite population was clearly receptive to Iran's ambitions. To Shiites in the Arab world, Tehran has come to signify what the Vatican is to Catholics.

Iran is now a key player in Arab countries with significant Shiite populations. The fall of Iraq's Saddam Hussein has made Iran's aspirations natural and effortless.

The people of Lebanon and Israel were the ultimate losers. Civilians, including women and children, were the majority of casualties.

In Lebanon, the damage to the country's infrastructure is significant and will cost several billions of dollars to rebuild. This, in addition to the loss of revenue from close to 2 million tourists expected to vacation in Lebanon this year. It may take years to recover. Furthermore, 1 million people (one-quarter of Lebanon's population) have been displaced. Many have lost their homes, and the financially strapped government will have to cope with the challenge of housing them. This is a significant setback to the Lebanese economy, which had been on the track to recovery. The government of Prime Minister Fuad Siniora has become weaker and increasingly marginalized, while Nasrallah emerges as a formidable leader.

Israel, with a much larger and more resilient economy than Lebanon, has been noticeably impacted by this war as well. Many of the factories in the north have shut down, and reservists responding to the call of duty have put their jobs on hold, thus slowing productivity. Many towns and cities in northern Israel have been evacuated to minimize the casualties from Hezbollah rockets. Like their Lebanese neighbors, Israeli lives have been significantly altered. Yet the leadership of Israel's Prime Minister Ehud Olmert will be judged as a failure. What do you have to show for this military engagement? Not much.

At the end of the day, Hezbollah is very much alive and significantly stronger politically. The war in Lebanon did not achieve the return of the two captured soldiers. Negotiations will. And, the disproportionate Israeli military response has unified the vast majority of Lebanese opinion against Israel and created an uphill battle on the global public relations front. The sad events in Qana, Lebanon, did not help either. If there is a country in the Arab world that has all the ingredients to have an organic peace with Israel, it is Lebanon. Unfortunately, this is now an unthinkable proposition to the people of Lebanon.

Finally, the U.S. State Department under the leadership of Condoleezza Rice also emerged from this war as a failure.

The prediction that Israel would eradicate Hezbollah swiftly delayed any U.S. intervention to end the war and minimize the destruction and casualties. Thus, the Bush administration lost the initiative to exhibit leadership and assert momentum to move toward an early conclusion to this sad episode. The delay created a credibility gap and the further weakening of the central moderate government in Lebanon, which needed international support.

Wars are horrible and this one is no exception. Will peace and tranquility come out of it? Perhaps there is an opportunity that will allow Hezbollah and the Israelis to settle their issues once and for all.

The healing and rebuilding must now begin.

Only comprehensive peace will permanently defuse Hezbollah and marginalize Iran.

Raja Kamal is associate dean for resource development at the Harris School for Public Policy Studies at the University of Chicago.