Philip C. Wilcox, Jr. is President of the Foundation for Middle East Peace, a Washington D.C.-based foundation devoted to fostering peace between Israelis and Palestinians. Wilcox retired after 31 years of service from the U.S. Foreign Service, his last overseas assignment was as Chief of Mission and U.S. Consul General, Jerusalem. In the Department of State, Wilcox had served as Director for Israeli and Arab-Israeli Affairs and as Deputy Assistant Secretary of State for Middle Eastern Affairs, among other roles.

The Legacy of the 1967 War: Victory or Defeat for Israel?

Israel's stunning military victory over the armies of Egypt, Syria and Jordan in 1967 was a fateful turning point. It set the stage for ending the military conflict between Israel and the Arab states, and led to a strong alliance with the United States and the growth of a powerful, prosperous Israel. These were brilliant achievements for the young Jewish state. But victory in 1967 also laid bare the Palestinian issue as the root of the conflict, launched Israel on a dangerous new path of settlement and colonization of the occupied territories, and reinforced a deep divide in Zionism. Today, occupation and settlements threaten Israel's fundamental goals of peace and security in a Jewish, democratic state, and deny any justice for Palestinians.

In 1948, the new state of Israel was welcomed by all but the Arab world as a fitting response to two millennia of tragedy for the Jewish people at the hands of the Christian West and the catastrophe of the Holocaust. The dispossession of the Palestinians, which accompanied Israel's victory in 1948, was only dimly understood then, and for decades, the world viewed the continuing conflict as a struggle between Israel and the Arab states.

This view did not change immediately after Israel's victory in 1967, but, gradually, the the core Palestinian-Israeli conflict came into focus. True, the Arab states still rejected accommodation. But Israel's emergence as a regional super power, its nuclear weapons, and its growing alliance with the United States, ended Arab state ambitions to destroy Israel. Sadat's war in 1973 was a tactic to force Israel to negotiate for peace. It led to the 1979 Egypt-Israel peace treaty, another triumph for Israel.

But Israel's choice of occupation and settlement of the West Bank, East Jerusalem and Gaza after the 1967 war ushered in a new era of Israeli-Palestinian conflict. Arafat and a rejectionist PLO emerged to lead a revival of Palestinian nationalism, and it took them two decades to move from armed struggle to recognition of Israel. It took Israel even longer to accept the PLO as a partner in peace. The U.S., which had also boycotted the PLO, rejected the legitimacy of Palestinian nationalism, and clung to the illusion that Jordan would return to govern the Palestinians, took even longer to understand the core Israeli-Palestinian conflict.

While all the parties to the conflict lost many opportunities for peace after 1967, Israeli settlements in the occupied territories became a primary obstacle. Although never formalized in law, articulated as policy, tested in a parliamentary vote, or subjected to hard strategic analysis, settlements became central to Israeli policy.

In the post-1967 debate over the future of the occupied territories, Israeli liberals warned that settlements would corrupt Zionism and bring constant conflict. In a famous letter to Prime Minister Menachem Begin in 1980, Israeli historian Jacob Talmon described settlements and occupation as a "time bomb." He warned that "The effort to hold the conquered territories proves itself to be not the crowning point in our history but rather a trap, a burden, not to be borne without degradation, corruption, and even collapse..Let us not compel the Arabs to feel that they have been humiliated until they believe that hope is gone and they must die for Palestine."

But the liberals lost the debate and the settlement project flourished. Today, over 450,000 settlers live in 125 settlements in the West Bank and East Jerusalem, amidst 2.5 million Palestinians. Although Israel evacuated 8,000 settlers from Gaza in 2005, and its leaders talk vaguely about further withdrawals, in fact it is expanding settlements in the West Bank, together with a massive separation barrier. The route of the barrier, which cuts deeply into Palestinian territory, placing the largest settlements and the best access to water on Israel's side, appears to define, unilaterally, a new border and belies Israel's claim that the sole function of the barrier is security

Talmon's warnings of disaster were prophetic. The settlement project in today's form prevents the creation of a viable, contiguous Palestinian state with a capital in East Jerusalem, which most experts, Israeli, Palestinian and American, understand are bedrock requirements for peace. Thousands have died in bloody rebellion and mutual violence. Although the horrific violence and suicide terrorism of the second intifada have abated, earlier hopes for peace have given way to despair. The Palestinians, reacting to the failure of peace and wise leadership, have elected a militant Hamas government.

Yet settlements expand relentlessly, heedless of the security threat they create, of Palestinian rights and needs, and of Israel's own founding principles of justice and equality. Israel is increasingly isolated internationally. At home, extra-legal measures to advance settlements and lawless treatment of Palestinians in the occupied territories have affected the integrity of Israeli political and civic life. No less dangerous for Israel's future, Palestinians will soon become a demographic majority, undermining Israel's foundation as a Jewish, democratic state.

This is the sad legacy of the 1967 war. But the situation is not irreversible. Most Israelis dislike settlements and would support their evacuation and a Palestinian state in the occupied territories in return for true peace. Polls show that a majority of Palestinians also want a real, two-state peace. Yet both societies, gripped by fear and traumatized by violence, no longer believe this is possible, and the political systems and leaders of both sides have proved unequal to this challenge. Israelis and Palestinians desperately need a strong helping hand to rescue them from this dangerous impasse. Only the United States can provide this. But American policy, preoccupied by Iraq, Iran and crippled by internal differences in Washington, has not yet accepted this challenge, even as the damage the Israeli Palestinian stalemate inflicts on larger U.S. interests in the region becomes clearer.

The bargain of land for peace, first embodied in UN Security Council Resolution 242 after the 1967 war, is still the only deal that can meet the basic needs of both sides: peace and security for Israel so that it can pursue its destiny in a Jewish, democratic state defined by pre-1967 Israel, and justice and sovereignty for Palestinians in a state of their own in the remaining 22% of historic Palestine. These needs are absolutely interdependent. Forty years later, it is time to restore this vision and make it work.

(March 5, 2007)