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<?xml-stylesheet type="text/xsl" href="http://www.investorsinsight.com/utility/FeedStylesheets/rss.xsl" media="screen"?><rss version="2.0" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" xmlns:wfw="http://wellformedweb.org/CommentAPI/"><channel><title>John Mauldin's Outside the Box : Israeli-Palestinian Conflict</title><link>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israeli-Palestinian+Conflict/default.aspx</link><description>Tags: Israeli-Palestinian Conflict</description><dc:language>en</dc:language><generator>CommunityServer 2008.5 SP1 (Build: 31106.3070)</generator><item><title>Flotillas and the Wars of Public Opinion</title><link>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/06/03/flotillas-and-the-wars-of-public-opinion.aspx</link><pubDate>Thu, 03 Jun 2010 15:00:00 GMT</pubDate><guid isPermaLink="false">94e1e1ff-3922-415d-9584-19119299714b:4829</guid><dc:creator>John Mauldin</dc:creator><slash:comments>0</slash:comments><wfw:commentRss xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/rsscomments.aspx?PostID=4829</wfw:commentRss><wfw:comment xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/commentapi.aspx?PostID=4829</wfw:comment><comments>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2010/06/03/flotillas-and-the-wars-of-public-opinion.aspx#comments</comments><description>&lt;p&gt;This week, we&amp;#39;ve seen a barrage of news and opinion pieces on Israel&amp;#39;s attack on the Turkish aid flotilla headed for the Gaza strip. In the midst of myriad media discussions concerning the moral and strategic angles, my friend George Friedman from STRATFOR brings up an interesting point: &amp;quot;[The Israelis] seem to think that the issue is whose logic is correct. But the issue actually is, whose logic will be heard?&amp;quot;&lt;/p&gt;
&lt;p&gt;George puts the entire situation into the perspective of a war of public perception, which gives us a much more accurate idea of what may come of all of this. Give his article a read, and then &lt;a href="https://www.stratfor.com/campaign/read_more_intelligence_4?utm_source=JMP&amp;amp;utm_medium=email&amp;amp;utm_campaign=WIPAJMP100603160409&amp;amp;utm_content=Freelist" target="_blank"&gt;join STRATFOR&amp;#39;s free email list&lt;/a&gt; to receive more intelligence of this sort--they will keep you in the know like no one else can.&lt;/p&gt;
&lt;p&gt;John Mauldin   &lt;br /&gt;Editor, Outside the Box&lt;/p&gt;
&lt;hr /&gt;
&lt;h2&gt;Flotillas and the Wars of Public Opinion&lt;/h2&gt;
&lt;p&gt;May 31, 2010&lt;/p&gt;
&lt;p&gt;&lt;b&gt;By George Friedman&lt;/b&gt;&lt;/p&gt;
&lt;p&gt;On Sunday, Israeli naval forces &lt;a href="http://www.stratfor.com/analysis/20100531_israel_consequences_flotilla_raid?fn=7116378429"&gt;intercepted the ships&lt;/a&gt; of a Turkish nongovernmental organization (NGO) delivering humanitarian supplies to Gaza. Israel had demanded that the vessels not go directly to Gaza but instead dock in Israeli ports, where the supplies would be offloaded and delivered to Gaza. The Turkish NGO refused, insisting on going directly to Gaza. Gunfire ensued when Israeli naval personnel boarded one of the vessels, and a significant number of the passengers and crew on the ship were killed or wounded.&lt;/p&gt;
&lt;p&gt;Israeli Deputy Foreign Minister Danny Ayalon charged that the mission was simply an attempt to &lt;a href="http://www.stratfor.com/geopolitical_diary/20100525_potential_turkish_israeli_crisis_and_its_international_implications?fn=4416378459"&gt;provoke the Israelis&lt;/a&gt;. That was certainly the case. The mission was designed to demonstrate that the Israelis were unreasonable and brutal. The hope was that Israel would be provoked to extreme action, further alienating Israel from the global community and possibly driving a wedge between Israel and the United States. The operation&amp;#39;s planners also hoped this would trigger a political crisis in Israel. &lt;/p&gt;
&lt;p&gt;A logical Israeli response would have been avoiding falling into the provocation trap and suffering the political repercussions the Turkish NGO was trying to trigger. Instead, the Israelis decided to make a show of force. The Israelis appear to have reasoned that backing down would demonstrate weakness and encourage further flotillas to Gaza, unraveling the Israeli position vis-&amp;agrave;-vis Hamas. In this thinking, a violent interception was a superior strategy to accommodation regardless of political consequences. Thus, the Israelis accepted the bait and were provoked.&lt;/p&gt;
&lt;h3&gt;The &amp;#39;Exodus&amp;#39; Scenario&lt;/h3&gt;
&lt;p&gt;In the 1950s, an author named Leon Uris published a book called &amp;quot;Exodus.&amp;quot; Later made into a major motion picture, Exodus told the story of a Zionist provocation against the British. In the wake of World War II, the British - who controlled Palestine, as it was then known - maintained limits on Jewish immigration there. Would-be immigrants captured trying to run the blockade were detained in camps in Cyprus. In the book and movie, Zionists planned a propaganda exercise involving a breakout of Jews - mostly children - from the camp, who would then board a ship renamed the Exodus. When the Royal Navy intercepted the ship, the passengers would mount a hunger strike. The goal was to portray the British as brutes finishing the work of the Nazis. The image of children potentially dying of hunger would force the British to permit the ship to go to Palestine, to reconsider British policy on immigration, and ultimately to decide to abandon Palestine and turn the matter over to the United Nations.&lt;/p&gt;
&lt;p&gt;There was in fact a ship called Exodus, but the affair did not play out precisely as portrayed by Uris, who used an amalgam of incidents to display the propaganda war waged by the Jews. Those carrying out this war had two goals. The first was to create sympathy in Britain and throughout the world for Jews who, just a couple of years after German concentration camps, were now being held in British camps. Second, they sought to portray their struggle as being against the British. The British were portrayed as continuing Nazi policies toward the Jews in order to maintain their empire. The Jews were portrayed as anti-imperialists, fighting the British much as the Americans had. &lt;/p&gt;
&lt;p&gt;It was a brilliant strategy. By focusing on Jewish victimhood and on the British, the Zionists defined the battle as being against the British, with the Arabs playing the role of people trying to create the second phase of the Holocaust. The British were portrayed as pro-Arab for economic and imperial reasons, indifferent at best to the survivors of the Holocaust. Rather than restraining the Arabs, the British were arming them. The goal was not to vilify the Arabs but to villify the British, and to position the Jews with other nationalist groups whether in India or Egypt rising against the British. &lt;/p&gt;
&lt;p&gt;The precise truth or falsehood of this portrayal didn&amp;#39;t particularly matter. For most of the world, the Palestine issue was poorly understood and not a matter of immediate concern. The Zionists intended to shape the perceptions of a global public with limited interest in or understanding of the issues, filling in the blanks with their own narrative. And they succeeded.&lt;/p&gt;
&lt;p&gt;The success was rooted in a political reality. Where knowledge is limited, and the desire to learn the complex reality doesn&amp;#39;t exist, public opinion can be shaped by whoever generates the most powerful symbols. And on a matter of only tangential interest, governments tend to follow their publics&amp;#39; wishes, however they originate. There is little to be gained for governments in resisting public opinion and much to be gained by giving in. By shaping the battlefield of public perception, it is thus possible to get governments to change positions. &lt;/p&gt;
&lt;p&gt;In this way, the Zionists&amp;#39; ability to shape global public perceptions of what was happening in Palestine - to demonize the British and turn the question of Palestine into a Jewish-British issue - shaped the political decisions of a range of governments. It was not the truth or falsehood of the narrative that mattered. What mattered was the ability to identify the victim and victimizer such that global opinion caused both London and governments not directly involved in the issue to adopt political stances advantageous to the Zionists. It is in this context that we need to view the Turkish flotilla.&lt;/p&gt;
&lt;p align="center"&gt;&lt;script language=JavaScript src=http://stats.adclickz.net/abm.aspx?z=32&gt;&lt;/script&gt;&lt;/p&gt;
&lt;h3&gt;The Turkish Flotilla to Gaza&lt;/h3&gt;
&lt;p&gt;The Palestinians have long argued that they are the victims of Israel, an invention of British and American imperialism. Since 1967, they have focused not so much on the existence of the state of Israel (at least in messages geared toward the West) as on the oppression of Palestinians in the occupied territories. Since the split between Hamas and Fatah and the Gaza War, the focus has been on the plight of the citizens of Gaza, who have been portrayed as the dispossessed victims of Israeli violence. &lt;/p&gt;
&lt;p&gt;The bid to shape global perceptions by portraying the Palestinians as victims of Israel was the first prong of a longtime two-part campaign. The second part of this campaign involved armed resistance against the Israelis. The way this resistance was carried out, from airplane hijackings to stone-throwing children to suicide bombers, interfered with the first part of the campaign, however. The Israelis could point to suicide bombings or the use of children against soldiers as symbols of Palestinian inhumanity. This in turn was used to justify conditions in Gaza. While the Palestinians had made significant inroads in placing Israel on the defensive in global public opinion, they thus consistently gave the Israelis the opportunity to turn the tables. And this is where the flotilla comes in. &lt;/p&gt;
&lt;p&gt;The Turkish flotilla aimed to replicate the Exodus story or, more precisely, to define the global image of Israel in the same way the Zionists defined the image that they wanted to project. As with the Zionist portrayal of the situation in 1947, the Gaza situation is far more complicated than as portrayed by the Palestinians. The moral question is also far more ambiguous. But as in 1947, when the Zionist portrayal was not intended to be a scholarly analysis of the situation but a political weapon designed to define perceptions, the Turkish flotilla was not designed to carry out a moral inquest. &lt;/p&gt;
&lt;p&gt;Instead, the flotilla was designed to achieve two ends. The first is to divide Israel and Western governments by shifting public opinion against Israel. The second is to create a political crisis inside Israel between those who feel that Israel&amp;#39;s increasing isolation over the Gaza issue is dangerous versus those who think any weakening of resolve is dangerous.&lt;/p&gt;
&lt;h3&gt;The Geopolitical Fallout for Israel&lt;/h3&gt;
&lt;p&gt;It is vital that the Israelis succeed in portraying the flotilla as an extremist plot. Whether &lt;a href="http://www.stratfor.com/analysis/20100531_israel_palestinian_territories_possible_militant_reprisals?fn=7616378493"&gt;extremist or not&lt;/a&gt;, the plot has generated an image of Israel quite damaging to Israeli political interests. Israel is increasingly isolated internationally, with heavy pressure on its relationship with Europe and the United States. &lt;/p&gt;
&lt;p&gt;In all of these countries, politicians are extremely sensitive to public opinion. It is difficult to imagine circumstances under which public opinion will see Israel as the victim. The general response in the Western public is likely to be that the Israelis probably should have allowed the ships to go to Gaza and offload rather than to precipitate bloodshed. Israel&amp;#39;s enemies will fan these flames by arguing that the Israelis prefer bloodshed to reasonable accommodation. And as Western public opinion shifts against Israel, Western political leaders will track with this shift. &lt;/p&gt;
&lt;p&gt;The incident also wrecks Israeli relations with Turkey, historically an Israeli ally in the Muslim world with longstanding military cooperation with Israel. The Turkish government undoubtedly has wanted to &lt;a href="http://www.stratfor.com/weekly/20090202_erdogans_outburst_and_future_turkish_state?fn=5814696098&amp;amp;fn=1316378478"&gt;move away from this relationship&lt;/a&gt;, but it faced resistance within the Turkish military and among secularists. The new Israeli action makes a break with Israel easy, and indeed almost necessary for Ankara.&lt;/p&gt;
&lt;p&gt;With roughly the population of Houston, Texas, Israel is just not large enough to withstand extended isolation, meaning this event has profound &lt;a href="http://www.stratfor.com/analysis/geopolitics_israel_biblical_and_modern?fn=6016378492"&gt;geopolitical implications&lt;/a&gt;. &lt;/p&gt;
&lt;p&gt;Public opinion matters where issues are not of fundamental interest to a nation. Israel is not a fundamental interest to other nations. The ability to generate public antipathy to Israel can therefore reshape Israeli relations with countries critical to Israel. For example, a &lt;a href="http://www.stratfor.com/weekly/20100322_netanyahuobama_meeting_context?fn=2716378481"&gt;redefinition of U.S.-Israeli relations&lt;/a&gt; will have much less effect on the United States than on Israel. The Obama administration, already irritated by the Israelis, might now see a shift in U.S. public opinion that will open the way to a new U.S.-Israeli relationship disadvantageous to Israel.&lt;/p&gt;
&lt;p&gt;The Israelis will argue that this is all unfair, as they were provoked. Like the British, they seem to think that the issue is whose logic is correct. But the issue actually is, whose logic will be heard? As with a tank battle or an airstrike, this sort of warfare has nothing to do with fairness. It has to do with controlling public perception and using that public perception to shape foreign policy around the world. In this case, the issue will be whether the deaths were necessary. The Israeli argument of provocation will have limited traction. &lt;/p&gt;
&lt;p&gt;Internationally, there is little doubt that the incident will generate a firestorm. Certainly, Turkey will break cooperation with Israel. Opinion in Europe will likely harden. And public opinion in the United States - by far the most important in the equation - might shift to a &amp;quot;plague-on-both-your-houses&amp;quot; position.&lt;/p&gt;
&lt;p&gt;While the &lt;a href="http://www.stratfor.com/node/163436/analysis/20100526_turkey_israel_us_3_views_gaza_convoy?fn=7016378449"&gt;international reaction is predictable&lt;/a&gt;, the interesting question is whether this evolution will &lt;a href="http://www.stratfor.com/analysis/20100526_israel_domestic_political_scene_and_aid_convoy?fn=8816378413"&gt;cause a political crisis in Israel&lt;/a&gt;. Those in Israel who feel that international isolation is preferable to accommodation with the Palestinians are in control now. Many in the opposition see Israel&amp;#39;s isolation as a strategic threat. Economically and militarily, they argue, Israel cannot survive in isolation. The current regime will respond that there will be no isolation. The flotilla aimed to generate what the government has said would not happen. &lt;/p&gt;
&lt;p&gt;The tougher Israel is, the more the flotilla&amp;#39;s narrative takes hold. As the Zionists knew in 1947 and the Palestinians are learning, controlling public opinion requires subtlety, a selective narrative and cynicism. As they also knew, losing the battle can be catastrophic. It cost Britain the Mandate and allowed Israel to survive. Israel&amp;#39;s enemies are now turning the tables. This maneuver was far more effective than suicide bombings or the Intifada in challenging Israel&amp;#39;s public perception and therefore its geopolitical position (though if the Palestinians return to some of their more distasteful tactics like suicide bombing, the Turkish strategy of portraying Israel as the instigator of violence will be undermined).&lt;/p&gt;
&lt;p&gt;Israel is now in &lt;a href="http://www.stratfor.com/analysis/20100531_israel_consequences_flotilla_raid?fn=6216378472"&gt;uncharted waters&lt;/a&gt;. It does not know how to respond. It is not clear that the Palestinians know how to take full advantage of the situation, either. But even so, this places the battle on a new field, far more fluid and uncontrollable than what went before. The next steps will involve calls for sanctions against Israel. The Israeli threats against Iran will be seen in a different context, and Israeli portrayal of Iran will hold less sway over the world. &lt;/p&gt;
&lt;p&gt;And this will cause a political crisis in Israel. If this government survives, then Israel is locked into a course that gives it freedom of action but international isolation. If the government falls, then Israel enters a period of domestic uncertainty. In either case, the flotilla achieved its strategic mission. It got Israel to take violent action against it. In doing so, Israel ran into its own fist.&lt;/p&gt;&lt;div style="clear:both;"&gt;&lt;/div&gt;&lt;img src="http://www.investorsinsight.com/aggbug.aspx?PostID=4829" width="1" height="1"&gt;</description><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/George+Friedman/default.aspx">George Friedman</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Stratfor/default.aspx">Stratfor</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Geopolitics/default.aspx">Geopolitics</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israel/default.aspx">Israel</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Turkey/default.aspx">Turkey</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israeli-Palestinian+Conflict/default.aspx">Israeli-Palestinian Conflict</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Gaza/default.aspx">Gaza</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/NGO/default.aspx">NGO</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Flotilla/default.aspx">Flotilla</category></item><item><title>An Israeli Prime Minister Comes to Washington Again</title><link>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/05/21/an-israeli-prime-minister-comes-to-washington-again.aspx</link><pubDate>Thu, 21 May 2009 13:37:00 GMT</pubDate><guid isPermaLink="false">94e1e1ff-3922-415d-9584-19119299714b:3495</guid><dc:creator>John Mauldin</dc:creator><slash:comments>0</slash:comments><wfw:commentRss xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/rsscomments.aspx?PostID=3495</wfw:commentRss><wfw:comment xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/commentapi.aspx?PostID=3495</wfw:comment><comments>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/05/21/an-israeli-prime-minister-comes-to-washington-again.aspx#comments</comments><description>&lt;p&gt;Dear Friends –&lt;/p&gt;  &lt;p&gt;Occasionally I need a fast answer. So I&amp;#39;ll run a Google search, and 2.54 MILLION responses later I&amp;#39;ve learned how to handle a Thanksgiving turkey-roasting crisis but nothing useful about Turkey&amp;#39;s financial crisis.&lt;/p&gt;  &lt;p&gt;There&amp;#39;s certainly no shortage of data these days. But what&amp;#39;s in all-too-short supply is understanding. As investors, what creates opportunities isn&amp;#39;t access to data but to ways of thinking about the world. I created Outside the Box precisely for this reason, to share with you some of the best thinkers in the world and some of the best ways to think about investments.&lt;/p&gt;  &lt;p&gt;To understand how geopolitical events impact your investments, there&amp;#39;s simply no one better than my friend George Friedman and his team at STRATFOR. They couple objective facts with unbiased context and analysis so you know what it all means for you. This understanding is a critical piece of my investment formula, and I strongly encourage you to &lt;a href="https://www.stratfor.com/campaign/welcome_john_mauldin_readers_38?utm_source=JMP&amp;amp;utm_medium=email&amp;amp;utm_campaign=WIPAJMP090521138383" target="_blank"&gt;click here to take advantage of a special offer&lt;/a&gt; that George is offering my readers.&lt;/p&gt;  &lt;p&gt;In the meantime, take a look at this article about Israel, the U.S., and the chance for peace in the Middle East. If you&amp;#39;ve ever wondered why this conflict doesn&amp;#39;t have a simple, Hollywood resolution, you&amp;#39;ll be blown away by the clarity George provides.&lt;/p&gt;  &lt;p&gt;To Understanding,   &lt;br /&gt;John Mauldin&lt;/p&gt;  &lt;h2&gt;An Israeli Prime Minister Comes to Washington Again&lt;/h2&gt;  &lt;p&gt;By George Friedman&lt;/p&gt;  &lt;p&gt;Related Special Topic Page&lt;/p&gt;  &lt;blockquote&gt;   &lt;p&gt;&lt;a href="http://www.stratfor.com/theme/israeli_palestinian_geopolitics_and_peace_process"&gt;Israeli-Palestinian Geopolitics and the Peace Process&lt;/a&gt; &lt;/p&gt; &lt;/blockquote&gt;  &lt;p&gt;Israeli Prime Minister Benjamin Netanyahu is visiting Washington for his first official visit with U.S. President Barack Obama. A range of issues — including the future of Israeli-Palestinian negotiations, &lt;a href="http://www.stratfor.com/weekly/shift_toward_israeli_syrian_agreement"&gt;Israeli-Syrian talks and Iran policy&lt;/a&gt; — are on the table. This is one of an endless series of meetings between U.S. presidents and Israeli prime ministers over the years, many of which concerned these same issues. Yet little has changed. &lt;/p&gt;  &lt;p&gt;That Israel has a new prime minister and the United States a new president might appear to make this meeting significant. But this is Netanyahu&amp;#39;s second time as prime minister, and his government is as diverse and fractious as most recent Israeli governments. Israeli politics are in gridlock, with deep divisions along multiple fault lines and an electoral system designed to magnify disagreements.&lt;/p&gt;  &lt;p&gt;Obama is much stronger politically, but he has consistently acted with caution, particularly in the foreign policy arena. Much of his foreign policy follows from the Bush administration. He has made no major breaks in foreign policy beyond rhetoric; his policies on Iraq, Afghanistan, Iran, Russia and Europe are essentially extensions of pre-existing policy. Obama faces major economic problems in the United States and clearly is not looking for major changes in foreign policy. He understands how quickly public sentiment can change, and he does not plan to take risks he does not have to take right now.&lt;/p&gt;  &lt;p&gt;This, then, is the problem: Netanyahu is coming to Washington hoping to get Obama to agree to fundamental redefinitions of the regional dynamic. For example, he wants Obama to re-examine the commitment to a two-state solution in the Israeli-Palestinian dispute. (Netanyahu&amp;#39;s foreign minister, Avigdor Lieberman, has said Israel is no longer bound by prior commitments to that concept.) Netanyahu also wants the United States to commit itself to a finite time frame for talks with Iran, after which unspecified but ominous-sounding actions are to be taken. &lt;/p&gt;  &lt;p&gt;Facing a major test in Afghanistan and Pakistan, Obama has more than enough to deal with at the moment. Moreover, &lt;a href="http://www.stratfor.com/weekly/glimmer_hope_annapolis"&gt;U.S. presidents who get involved in Israeli-Palestinian negotiations&lt;/a&gt; frequently get sucked into a morass from which they do not return. For Netanyahu to even request that the White House devote attention to the Israeli-Palestinian problem at present is asking a lot. Asking for a complete review of the peace process is even less realistic.&lt;/p&gt;  &lt;p align="center"&gt;&lt;script language=JavaScript src=http://stats.adclickz.net/abm.aspx?z=32&gt;&lt;/script&gt;&lt;/p&gt;  &lt;h3&gt;Obstacles to the Two-State Solution&lt;/h3&gt;  &lt;p&gt;The foundation of the Israeli-Palestinian peace process for years has been the assumption that there would be a &lt;a href="http://www.stratfor.com/weekly/israel_palestine_lebanon_syria_hopes_meet_reality"&gt;two-state solution&lt;/a&gt;. Such a solution has not materialized for a host of reasons. First, at present there are two Palestinian entities, Gaza and the West Bank, which are hostile to each other. Second, the geography and economy of any &lt;a href="http://www.stratfor.com/geopolitics_palestinians"&gt;Palestinian state&lt;/a&gt; would be so reliant on Israel that independence would be meaningless; geography simply makes the two-state proposal almost impossible to implement. Third, no Palestinian government would have the power to guarantee that rogue elements would not launch rockets at Israel, potentially striking at the Tel Aviv-Jerusalem corridor, Israel&amp;#39;s heartland. And fourth, neither the Palestinians nor the Israelis have the domestic political coherence to allow any negotiator to operate from a position of confidence. Whatever the two sides negotiated would be revised and destroyed by their political opponents, and even their friends.&lt;/p&gt;  &lt;p&gt;For this reason, the entire peace process — including the two-state solution — is a chimera. Neither side can live with what the other can offer. But if it is a fiction, it is a fiction that serves U.S. purposes. The United States has interests that go well beyond Israeli interests and sometimes go in a different direction altogether. Like Israel, the United States understands that one of the major obstacles to any serious evolution toward a two-state solution is Arab hostility to such an outcome. &lt;/p&gt;  &lt;p&gt;The Jordanians have feared and loathed Fatah in the West Bank ever since the Black September uprisings of 1970. The ruling Hashemites are ethnically different from the Palestinians (who constitute an overwhelming majority of the Jordanian population), and they fear that a Palestinian state under Fatah would threaten the Jordanian monarchy. For their part, the &lt;a href="http://www.stratfor.com/weekly/20090107_hamas_and_arab_states"&gt;Egyptians see Hamas&lt;/a&gt; as a descendent of the Muslim Brotherhood, which seeks the Mubarak government&amp;#39;s ouster — meaning Cairo would hate to see a Hamas-led state. Meanwhile, the Saudis and the other Arab states do not wish to see a radical altering of the status quo, which would likely come about with the rise of a Palestinian polity. &lt;/p&gt;  &lt;p&gt;At the same time, whatever the basic strategic interests of the Arab regimes, all pay lip service to the principle of Palestinian statehood. This is hardly a unique situation. States frequently claim to favor various things they actually are either indifferent to or have no intention of doing anything about. Complicating matters for the Arab states is the fact that they have substantial populations that do care about the fate of the Palestinians. These states thus are caught between public passion on behalf of Palestinians and the regimes&amp;#39; interests that are threatened by the Palestinian cause. The states&amp;#39; challenge, accordingly, is to appear to be doing something on behalf of the Palestinians while in fact doing nothing. &lt;/p&gt;  &lt;p&gt;The United States has a vested interest in the preservation of these states. The futures of Egypt, Saudi Arabia and the Gulf states are of vital importance to Washington. The United States must therefore simultaneously publicly demonstrate its sensitivity to pressures from these nations over the Palestinian question while being careful to achieve nothing — an easy enough goal to achieve. &lt;/p&gt;  &lt;p&gt;The &lt;a href="http://www.stratfor.com/weekly/oil_and_saudi_peace_offensive"&gt;various Israeli-Palestinian peace processes&lt;/a&gt; have thus served U.S. and Arab interests quite well. They provide the illusion of activity, with high-level visits breathlessly reported in the media, succeeded by talks and concessions — all followed by stalemate and new rounds of violence, thus beginning the cycle all over again. &lt;/p&gt;  &lt;h3&gt;The Palestinian Peace Process as Political Theater&lt;/h3&gt;  &lt;p&gt;One of the most important proposals Netanyahu is bringing to Obama calls for reshaping the peace process. If Israeli President Shimon Peres is to be believed, Netanyahu will not back away from the two-state formula. Instead, the Israeli prime minister is asking that the various Arab state stakeholders become directly involved in the negotiations. In other words, Netanyahu is proposing that Arab states with very different public and private positions on Palestinian statehood be asked to participate — thereby forcing them to reveal publicly their true positions, ultimately creating internal political crises in the Arab states. &lt;/p&gt;  &lt;p&gt;The clever thing about this position is that Netanyahu not only knows his request will not become a reality, but he also does not want it to become a reality. The political stability of Jordan, Saudi Arabia and Egypt is as much an Israeli interest as an American one. Indeed, Israel even wants a stable Syria, since whatever would come after the Alawite regime in Damascus would be much more dangerous to Israeli security than the current Syrian regime. &lt;/p&gt;  &lt;p&gt;Overall, Israel is a conservative power. In terms of nation-states, it does not want upheaval; it is quite content with the current regimes in the Arab world. But Netanyahu would love to see an international conference with the Arab states roundly condemning Israel publicly. This would shore up the justification for Netanyahu&amp;#39;s policies domestically while simultaneously creating a framework for reshaping world opinion by showing an Israel isolated among hostile states.&lt;/p&gt;  &lt;p&gt;Obama is likely hearing through diplomatic channels from the Arab countries that they do not want to participate directly in the Palestinian peace process. And the United States really does not want them there, either. The peace process normally ends in a train wreck anyway, and Obama is in no hurry to see the wreckage. He will want to insulate other allies from the fallout, putting off the denouement of the peace process as long as possible. Obama has sent George Mitchell as his Middle East special envoy to deal with the issue, and from the U.S. president&amp;#39;s point of view, that is quite enough attention to the problem.&lt;/p&gt;  &lt;p&gt;Netanyahu, of course, knows all this. Part of his mission is simply convincing his ruling coalition — and particularly Lieberman, whom Netanyahu needs to survive, and who is by far Israel&amp;#39;s most aggressive foreign minister ever — that he is committed to redefining the entire Israeli-Palestinian relationship. But in a broader context, Netanyahu is looking for greater freedom of action. By posing a demand the United States will not grant, Israel is positioning itself to ask for something that appears smaller. &lt;/p&gt;  &lt;p align="center"&gt;&lt;script language=JavaScript src=http://stats.adclickz.net/abm.aspx?z=32&gt;&lt;/script&gt;&lt;/p&gt;  &lt;h3&gt;Israel and the Appearance of Freedom of Action&lt;/h3&gt;  &lt;p&gt;What Israel actually would do with greater freedom of action is far less important than simply creating the appearance that the United States has endorsed Israel&amp;#39;s ability to act in a new and unpredictable manner. From Israel&amp;#39;s point of view, the problem with Israeli-Palestinian relations is that Israel is under severe constraints from the United States, and the Palestinians know it. This means that the Palestinians can even anticipate the application of force by Israel, meaning they can prepare for it and endure it. From Netanyahu&amp;#39;s point of view, Israel&amp;#39;s primary problem is that the Palestinians are confident they know what the Israelis will do. If Netanyahu can get Obama to introduce a degree of ambiguity into the situation, Israel could regain the advantage of uncertainty.&lt;/p&gt;  &lt;p&gt;The problem for Netanyahu is that Washington is not interested in having anything unpredictable happen in Israeli-Palestinian relations. The United States is quite content with the current situation, particularly while Iraq becomes more stable and the Afghan situation remains unstable. Obama does not want a crisis from the Mediterranean to the Hindu Kush. The fact that Netanyahu has a political coalition to satisfy will not interest the United States, and while Washington at some unspecified point might endorse a peace conference, it will not be until Israel and its foreign minister endorse the two-state formula. &lt;/p&gt;  &lt;p&gt;Netanyahu will then shift to another area where freedom of action is relevant — namely, Iran. The Israelis have leaked to the Israeli media that the Obama administration has told them that Israel may not attack Iran without U.S. permission, and that Israel agreed to this requirement. (U.S. President George W. Bush and Israeli Prime Minister Ehud Olmert went through the same routine not too long ago, using a good cop/bad cop act in a bid to kick-start negotiations with Iran.)&lt;/p&gt;  &lt;p&gt;In reality, Israel would have a great deal of difficulty attacking Iranian facilities with non-nuclear forces. A multitarget campaign 1,000 miles away against an enemy with some air defenses could be a long and complex operation. Such a raid would require a long trip through U.S.-controlled airspace for the fairly small Israeli air force. Israel could use cruise missiles, but the tonnage of high explosive delivered by a cruise missile cannot penetrate even moderately hardened structures; the same is true for ICBMs carrying conventional warheads. Israel would have to notify the United States of its intentions because it would be passing through Iraqi airspace — and because U.S. technical intelligence would know what it was up to before Israeli aircraft even took off. The idea that Israel might consider attacking Iran without informing Washington is therefore absurd on the surface. Even so, the story has surfaced yet again in an Israeli newspaper in a virtual carbon copy of stories published more than a year ago. &lt;/p&gt;  &lt;p&gt;Netanyahu has promised that the endless stalemate with the Palestinians will not be allowed to continue. He also knows that whatever happens, Israel cannot threaten the stability of Arab states that are by and large uninterested in the Palestinians. He also understands that in the long run, Israel&amp;#39;s freedom of action is defined by the United States, not by Israel. His electoral platform and his strategic realities have never aligned. Arguably, it might be in the Israeli interest that the status quo be disrupted, but it is not in the American interest. Netanyahu therefore will get to redefine neither the Palestinian situation nor the Iranian situation. Israel simply lacks the power to impose the reality it wants, the current constellation of Arab regimes it needs, and the strategic relationship with the United States on which Israeli national security rests. &lt;/p&gt;  &lt;p&gt;In the end, this is a classic study in the limits of power. Israel can have its freedom of action anytime it is willing to pay the price for it. But Israel can&amp;#39;t pay the price. Netanyahu is coming to Washington to see if he can get what he wants without paying the price, and we suspect strongly he knows he won&amp;#39;t get it. His problem is the same as that of the Arab states. There are many in Israel, particularly among Netanyahu&amp;#39;s supporters, who believe &lt;a href="http://www.stratfor.com/analysis/geopolitics_israel_biblical_and_modern"&gt;Israel is a great power&lt;/a&gt;. It isn&amp;#39;t. It is a nation that is strong partly because it lives in a pretty weak neighborhood, and partly because it has very strong friends. Many Israelis don&amp;#39;t want to be told that, and Netanyahu came to office playing on the sense of Israeli national power. &lt;/p&gt;  &lt;p&gt;So the peace process will continue, no one will expect anything from it, the Palestinians will remain isolated and wars regularly will break out. The only advantage of this situation from the U.S. point of view it is that it is preferable to all other available realities.&lt;/p&gt;&lt;div style="clear:both;"&gt;&lt;/div&gt;&lt;img src="http://www.investorsinsight.com/aggbug.aspx?PostID=3495" width="1" height="1"&gt;</description><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/George+Friedman/default.aspx">George Friedman</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Stratfor/default.aspx">Stratfor</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Geopolitics/default.aspx">Geopolitics</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Palestinians/default.aspx">Palestinians</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israel/default.aspx">Israel</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israeli-Palestinian+Conflict/default.aspx">Israeli-Palestinian Conflict</category></item><item><title>Iran: Using Oil as a Weapon, But Only Rhetorically</title><link>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/08/iran-using-oil-as-a-weapon-but-only-rhetorically.aspx</link><pubDate>Thu, 08 Jan 2009 15:33:13 GMT</pubDate><guid isPermaLink="false">94e1e1ff-3922-415d-9584-19119299714b:2673</guid><dc:creator>John Mauldin</dc:creator><slash:comments>0</slash:comments><wfw:commentRss xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/rsscomments.aspx?PostID=2673</wfw:commentRss><wfw:comment xmlns:wfw="http://wellformedweb.org/CommentAPI/">http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/commentapi.aspx?PostID=2673</wfw:comment><comments>http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/08/iran-using-oil-as-a-weapon-but-only-rhetorically.aspx#comments</comments><description>&lt;p&gt;Dear Friends: &lt;/p&gt;  &lt;p&gt;The hottest media topic of the New Year is the Israeli-Palestinian conflict in Gaza. And as I was reading the New York Times on Tuesday, I came across this sentence in one of the articles that was staggeringly truthful and more than a little unsettling in its implications for me as an investor.&lt;/p&gt;  &lt;p&gt;&amp;quot;There are other ways to construe the context of this conflict of course. But no matter what, Israel&amp;#39;s diplomats know that if journalists are given a choice between covering death and covering context, death wins.&amp;quot; &lt;/p&gt;  &lt;p&gt;Now, I&amp;#39;m NOT trying to get into a debate about the rights and wrongs of either side, but if you&amp;#39;re an investor, and you&amp;#39;re trying to make decisions about where this conflict might drive oil prices, for example, then context is everything. And according to the New York Times, if you&amp;#39;re relying on journalists for context, forget it. &lt;/p&gt;  &lt;p&gt;But you do have an alternative: my friend George Friedman&amp;#39;s company, Stratfor, is the unbiased source for insightful analysis of global events. George and his team are all about context – and they provide it without bias or an agenda. If you&amp;#39;re my age, you remember &amp;quot;Just the facts, ma&amp;#39;am.&amp;quot; Whether it&amp;#39;s the conflict in Gaza, the war between Georgia and Russia, or the mayhem and violence in Nigeria, when I need to know how geopolitics is going to hit energy prices, I turn to Stratfor. &lt;/p&gt;  &lt;p&gt;I&amp;#39;m including today one of their analyses on the conflict: Iran: Using Oil as a Weapon, But Only Rhetorically. In it, Stratfor showcases its strengths: unbiased analysis--and in this case, of a situation mainstream media has barely even registered. George has kindly arranged a special offer for my readers. &lt;a href="https://www.stratfor.com/campaign/welcome_john_mauldin_readers_31?utm_source=mauldin&amp;amp;utm_medium=email&amp;amp;utm_campaign=WIPAJMP090108" target="_blank"&gt;Click here, and you&amp;#39;ll get 2 years of Membership&lt;/a&gt; for the price of 1 for just $349. Plus George is including a free copy of his new book coming out later this month (I&amp;#39;ll be reviewing it for you in a couple weeks.) &lt;/p&gt;  &lt;p&gt;Your all-about-context analyst,   &lt;br /&gt;John Mauldin&lt;/p&gt;  &lt;p align="center"&gt;&lt;script language=JavaScript src=http://stats.adclickz.net/abm.aspx?z=32&gt;&lt;/script&gt;&lt;/p&gt;  &lt;hr /&gt;  &lt;h2&gt;Iran: Using Oil as a Weapon, But Only Rhetorically &lt;/h2&gt;  &lt;p&gt;&lt;a href="http://www.investorsinsight.com/cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/Iranian_5F00_Oilfield_5F00_25F19156.jpg"&gt;&lt;img title="An Iranian Oil Refinery" style="border-right:0px;border-top:0px;display:inline;border-left:0px;border-bottom:0px;" height="217" alt="An Iranian Oil Refinery" src="http://www.investorsinsight.com/cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/Iranian_5F00_Oilfield_5F00_thumb_5F00_6169A269.jpg" width="407" border="0" /&gt;&lt;/a&gt; &lt;/p&gt;  &lt;h3&gt;Summary &lt;/h3&gt;  &lt;p&gt;Iran is calling for oil-producing states to launch an embargo against the West in protest of Israel&amp;#39;s current military operations in Gaza. But while Tehran would love to see oil prices rise, it is in no position to cut production -- and neither, really, are its Arab neighbors. In reality, the embargo threats are mere atmospherics in the ongoing geopolitical rivalry between Iran and Saudi Arabia. &lt;/p&gt;  &lt;h3&gt;Analysis &lt;/h3&gt;  &lt;p&gt;Brig. Gen. Mirfeysal Bagherzadeh, a commander of Iran&amp;#39;s elite Islamic Revolutionary Guards Corps (IRGC), on Jan. 4 called on Muslim countries to use oil as a weapon to end the ongoing Israeli offensive in Gaza, now in its 10th day. Bagherzadeh said Western dependence on the energy resources of the Islamic world should be used to put pressure on Israel&amp;#39;s backers in Europe and the United States. His remarks come on the heels of similar calls from lawmakers in Bahrain, a country whose political landscape is dominated by its Shiite majority, which in turn has ties to Iran. &lt;/p&gt;  &lt;p&gt;For a variety of reasons, however, such calls will not spark any serious attempts to use oil as a means to affect the Israeli-Palestinian conflict. Indeed, Iran&amp;#39;s real purpose is not to spearhead an oil embargo against the West, but rather to score political points by emphasizing publicly that Tehran is the only player in the region trying to support the Palestinians during an Israeli military offensive. The primary goal is to make its Arab rivals look bad -- especially Saudi Arabia and its allies in the Gulf Cooperation Council. (Though if the markets were spooked by the threat and oil prices jumped, the Iranians would not mind at all.) &lt;/p&gt;  &lt;p&gt;Tehran actually is no position to come to the aid of the Palestinians; only Saudi Arabia and the other, smaller Persian Gulf states would be able to make such an embargo work. These countries are more concerned about their bottom lines, however. At a time when the world is in the middle of a major financial crisis and the price of oil has fallen by some 70 percent from the record highs of July 2008, they need to sell oil just as much as the West needs to buy it. That is why Saudi Arabia, the main mover and shaker in the Organization of the Petroleum Exporting Countries (OPEC), is already having a hard time getting the other cartel members to abide by &lt;a href="http://www.stratfor.com/analysis/20081231_opec_and_falling_oil_prices" target="_blank"&gt;recently announced production cuts&lt;/a&gt; aimed at raising the price of oil to more acceptable levels. &lt;/p&gt;  &lt;p&gt;The petroleum-rich Arab states still have massive reserves to keep them financially healthy for quite some time to come. In contrast, &lt;a href="http://www.stratfor.com/analysis/20081216_iran_economic_isolation_and_crisis" target="_blank"&gt;the Iranians are hurting badly&lt;/a&gt; from the slump in oil prices and desperately need more income. Thus, in reality, Tehran has much more to lose by cutting production than its Arab rivals do. And because of sanctions, Iran does not even sell oil to the United States -- so there is nothing Tehran can do to &amp;quot;implement an embargo&amp;quot; against the world&amp;#39;s No. 1 oil consumer.&lt;/p&gt;  &lt;p align="center"&gt;&lt;script language=JavaScript src=http://stats.adclickz.net/abm.aspx?z=32&gt;&lt;/script&gt;&lt;/p&gt;  &lt;p&gt;But Iran is hoping its threat will kill two birds with one stone, pushing prices up even if there is no embargo. Despite their long slide, oil prices have jumped some 25 percent in the 10 days since the Israeli operation began. It is not clear that this increase is actually related to the Gaza operation -- after all, Israel produces a mere 5,966 barrels per day (bpd) of oil, consumes only about 250,000 bpd and transits nothing worth mentioning. But Tehran is hoping that the markets are spooked, and that they will be spooked further by the threat of an embargo. &lt;/p&gt;  &lt;p&gt;For oil prices to be affected significantly, however, the oil-rich Arab states would need to join Iran in making an issue of the Israeli operation -- which they are not doing. On the contrary, they are hoping that the assault will cut Hamas down to more manageable proportions and thwart Iran&amp;#39;s attempts to use the Israeli-Palestinian conflict to its own advantage. &lt;/p&gt;&lt;div style="clear:both;"&gt;&lt;/div&gt;&lt;img src="http://www.investorsinsight.com/aggbug.aspx?PostID=2673" width="1" height="1"&gt;</description><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Middle+East/default.aspx">Middle East</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/George+Friedman/default.aspx">George Friedman</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Oil/default.aspx">Oil</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Stratfor/default.aspx">Stratfor</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Geopolitics/default.aspx">Geopolitics</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/OPEC/default.aspx">OPEC</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Iran/default.aspx">Iran</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Persian+Gulf/default.aspx">Persian Gulf</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israel/default.aspx">Israel</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Intelligence/default.aspx">Intelligence</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Saudi+Arabia/default.aspx">Saudi Arabia</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Israeli-Palestinian+Conflict/default.aspx">Israeli-Palestinian Conflict</category><category domain="http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/tags/Gaza/default.aspx">Gaza</category></item></channel></rss>