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This is a summary of a paper that was recently published by the Peres Center for Peace and the Palestine Center for Strategic Studies.

'Economic peace' claims that economic welfare among the Palestinians will create hope, calm hostilities, weaken the tendency towards violence and create the "price of loss" – meaning decreasing the profitability of a confrontation, based on the fear of possibly losing economic assets already achieved, including an increase in revenues, increasing export, drawing investors and generally expanding investments in the area.

In the current situation, unemployment, deprivation and lack of hope for improvement, means that Palestinians see no benefit of peace and tend towards radicalism. Assymetry between Israeli and Palestinian quality of life breeds discontent. Netanyahu believes that economic stability will preceed a political solution.

However, there was economic prosperity in the Palestinian authority before both the first and second intifiadas, with GNP growing steadily.

Some examples of improving the economic relations between Israel and Palestine include building a joint Eilat-Aqaba airport, joint tourism projects and creating a Palestinian industrial zone.

So what state is the Palestinian economy currently in? According to the Palestinian Central Bureau of Statistics, from 2007 to 2008 the GDP grew healthily. Tourism in the West Bank increased greatly in the last few years, giving a boost to the economy. However, unemployment in the West Bank is approx 19%, and over 40% in Gaza. This has risen steeply since Palestinans were denied permits to work inside Israel. Between 1996 and 2000, around 30% of the Palestinian workforce was employed inside Israel.

It is in Israel's interest to begin employing Palestinians once again to help stabilise the Palestinian economy and to promote normalised relations between Israelis and Palestinians, as well as dealing with the problem of foreign workers settling in Israel.

Can improving the Palestinian economy be a path to lasting peace, or is this just a side issue necessary to support the political process?

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We nead peace freedom >Ending occupation is what we need fairst for peace>>
Economic peace ? Another creation to make palestinians more happy, so they forget that state rubbish. Again more settlers ?

League of nation report 1939 :

"What is the reason for this intense Arab opposition? It is not that the Arabs are incapable of enjoying the material advantages which the development of their country will bring to them. They are human, and in other circumstances they would appreciate this. But they are not thinking of material things. They are thinking of something more precious to them than any material advantage. They are thinking of their freedom. They recognise the industry and the skill and the wealth of the Jews, which are superior to those of most peoples, and they fear that the time is soon coming when the Jewish population will dominate them in their native country not only economically, but socially, politically and in every way."

http://unispal.un.org/unispal.nsf/3d14c9e5cdaa296d85256cbf005aa3eb/...
well I think that the idea is to build an economy in the west bank that does not dependent on Israel or the settlers.
shimon peres was talking about the Singapore model of a micro successful state for a long time now.
and that is how the Israelis sees this.. we do not want the palestinians to be dependent on us at all.
my question as an Israeli is what about Gaza?
Gaza has the sea port and opening to Europe. obviously the problem is Hamas or more correctly the lack of unity between Hamas and the PLO. at least that is what the Israelis are trying to show to the world and to the Palestinians.

bottom line the "economy peace " is no defrent then the two states solution peace. building a solid economy to the new state is part of it and an important one as well

P.S Mika the two states solution is the only solution. the "palestinians Native country" unfortunately not here yet.. but hopefully if we will all work hard it will be here next to Israel soon

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