Resolution of the Palestine-Israeli Conflict: Is the US, Israeli, Iranian, and Palestinian leadership up to the Challenge?

The unresolved Israeli-Palestinian conflict, compounded by shifting regional dynamics and US-Israeli policies, demands a reassessment of leadership and strategy. With the two-state solution under threat and rising tensions involving Iran and its proxies, the question remains whether current leaders can navigate a sustainable path to peace.
At the conclusion of Donald Trump’s first term as US president on 20 January 2021, the Middle East was unfinished business. It remains unfinished business. However, while aspects of the political and security landscape remain unchanged, others have changed significantly. In all cases, the challenges are serious.
Trump’s planning during his first term to bring peace and stability to the Middle East, including resolution of the Palestine/Israel conflict, involved three basic initiatives.
The first was to minimise or eliminate the threat of Iran, seen by Trump as the major threat to the region, through its political, religious and military actions, inclusive of its opposition to and support of others who opposed the existence of Israel, and its potential to develop a nuclear weapons capability.
The second involved expanding via the Abraham Accords the diplomatic recognition of Israel by the Arab states, and the promotion of political, economic and security cooperation between them.
The third was to resolve the Palestinian-Israel conflict through what is informally known as the Trump peace plan. This was a politico-economic plan rolled out in 2019/2020 and involved recognition of each as sovereign states within recognised international borders, the recognition of respective citizenship rights within each state, security arrangements that ensured no future threat to Israel from or through Palestine, and Palestine’s receipt of a range of economic benefits.
As of January 2021, Trump’s progress was very much a mixed bag.
Regarding Iran, central to Trump’s planning was a “maximum pressure” campaign to force Iran’s leadership to minimise or cease their “adversarial activities.” This included, in 2018, Trump’s unilateral withdrawal from the nuclear-related Joint Comprehensive Plan of Action (JCPOA), signed in 2015, which included prohibiting Iran’s enrichment of uranium to weapons-grade purity. Trump did so, despite strong representations by other signatories not to, because he deemed the JCPOA flawed, particularly because of its sunset provisions on uranium enrichment. Withdrawal also allowed the US reinstatement of former economic and other sanctions against Iran, and the imposition of a range of new sanctions. Trump also introduced secondary provisions to sanction other countries if they assisted Iran in circumventing primary sanctions.
Despite the above, the Iranian regime survived. Its support for other states and proxies was undiminished (but still subject to US/Israeli interdiction en route to recipients), it found ways to circumvent many sanctions—but at a cost—and it upgraded uranium production to 60%, or near weapons-grade, in large part for leverage in any future negotiations.
The only Middle East countries to sign the Abraham Accords during Trump’s first term were the UAE and Bahrain, both in 2020 (the other signatory that year was Sudan). Other potential signatories declined because of issues over Israel’s concurrent conflict with Palestine and US/Israeli attitudes towards the future of Palestine conveyed in Trump’s proposed peace plan.
The principal authors of Trump’s peace plan were Jared Kushner, Trump’s son-in-law, and Benjamin Netanyahu, Israel’s prime minister. Neither the Palestinians nor, apparently, other Arab states or stakeholders were consulted.
Politically, the plan included both the West Bank and Gaza as part of Palestine but ignored the traditional two-state solution based on independent sovereign nations defined by pre-1967 borders. Importantly, it included Israel’s annexation of the whole Jordan Valley and all existing illegal Israeli settlements within the West Bank and reconfirmed Jerusalem as Israel’s capital, with provision for a Palestinian capital nearby. The perception, if not reality, was that West Bank Palestinians would occupy enclaves within a Greater Israel, and Palestinian sovereignty would be subject to specific Israeli conditions, including strict security requirements, especially regarding Gaza.
The plan was universally rejected, directly or indirectly, by all Arab states and institutions, Europeans, the EU and others, including the UN. The plan went nowhere.
So what did Trump inherit when he resumed the presidency last month? The underlying issues had not changed. The Israel/Palestine issue remained unresolved, although the Biden administration had put the two-state solution back on the table despite sustained resistance to this by Netanyahu. Iran also remained Israel’s and the region’s major threat.
But many specific aspects of the political and security landscape had changed significantly following Hamas’s horrific 7 October 2023 attack against Israel and Israel’s retaliatory military responses, with US support. Hamas was the major target during 15 months of intense operations. Iran and proxies Hezbollah in Lebanon and the Houthis in Yemen were also seriously targeted, especially in late 2024. Syria was spared the brunt of an Israeli attack due to the ousting of the Assad regime in early December in an uprising led by a Sunni political-paramilitary grouping.
As of writing, Hamas and Hezbollah have reached ceasefire agreements with Israel. In both cases, these are temporary six-week agreements and are fragile.
For Israel, the primary aim of the Hamas ceasefire is to secure the release of the remaining 7 October hostages through a reciprocal exchange of Hamas/Palestinian detainees. So far, this has worked, but more than one ceasefire will be necessary to secure the release of all Israeli hostages.
Israel’s overall aim is to destroy both the political and military infrastructure of Hamas and ensure it does not play any future role in governing Gaza or, more broadly, in the future government of Palestine. According to several sources, Israel’s intent is to resume the destruction of Hamas on completion of the hostage trade. Hamas knows this and sees the hostage trade as their only leverage with the Israelis. How long Hamas can play out the hostage trade before Netanyahu loses patience remains to be seen.
While Hamas, politically and militarily, is certainly down, their presence accompanying their release of hostages suggests it is not “out.” The challenge for Israel, the Palestinian Authority (PA), and other stakeholders is how to achieve the effective governance of Gaza by the PA in any peace/territorial deal. The PA currently has no credible political standing in Gaza. And even if Hamas was “out,” could the PA replace them, and if not, who could? Is PA president Mahmoud Abbas, now 89 years old, the right person to lead Palestine-related challenges into the future?
Another contentious issue is the credibility of the two-state solution. I don’t believe a one-state solution, Israeli or Palestinian, is practical. But is Palestine, based on the pre-1967 borders—i.e. comprising two separate territories—feasible politically, economically, and in national security terms? A senior Ramallah-based PA official has expressed to me his opinion that this situation can work, provided the Palestinians and Israelis want it to work and strive to make it work. However, there are influential Israelis who want to annex Gaza, a situation compounded by Trump’s statement on 26 January to “clean out” Gaza by relocating Gazans to Egypt and Jordan. Is this US or Israeli policy? Arab nations firmly rejected this displacement last Saturday and reconfirmed support for a two-state solution.
Given all the regional uncertainties, the challenges of redeveloping Gaza, and the threat of displacement of some two million Gazans, all stakeholders have a right to know, officially, Israeli and US policy on the traditional two-state solution, and especially any proposed border changes. If Netanyahu can’t or won’t advise, is he the right person to lead Israel at this critical time?
Finally, where do Iran and its proxies fit? Iran’s credibility as a regional power has been severely diminished during the last 16 months, and more recently due to the effectiveness of Israeli attacks on Iran itself. If Iran does not act to change its threat perception, it is highly likely Trump, with full Israeli support, will turn the dial from “maximum pressure” to “regime change.” Could Iran’s leadership, led by 85-year-old Ali Khamenei, survive?
In conclusion, some speculative thinking. Could Iran’s leadership agree to recognise Israel, persuade others hostile to Israel also to do so, and re-adopt the JCPOA nuclear conditions, if Israel and the US agreed to recognise Palestine as a full member-state of the UN and embrace a Palestinian-agreed two-state solution? This could shift the widespread view of Iran’s ruling regime from a regional negative to, or towards, a positive. In principle, and hopefully in practice, the total benefits, regional and extra-regional, would be a win-win for all and a sound basis for Trump to revise his peace plan.
Ian Dudgeon is a former president of the ACT branch of the Australian Institute of International Affairs.
This article is published under a Creative Commons License and may be republished with attribution.