The struggle for peace in the Middle East has been long and tortuous. After five decades of Arab-Israeli conflict and five wars, the 1993 Oslo Accords were a hopeful breakthrough. That one of the architects of this agreement, Yitzhak Rabin, was soon the victim of an Israeli assassin's bullet dramatizes the perplexing nature of the Arab-Israeli conflict.
With few notable exceptions, leaders of the Middle East countries have not approached the Palestinian-Israeli conflict with a determined problem-solving orientation, let alone with a vision.1 For this reason, the electoral victory of Prime Minister Ehud Barak, following soon after the ascension of King Abdullah II to the Hashemite Kingdom, may represent a major turning point in the Palestinian-Israeli conflict.

Turning Point in the Middle East Conflict

Pledging to pursue peace, Barak should be able to revive the dormant peace process, provided he succeeds in grappling with two fundamental problems: the Jewish settlements on the West Bank and Gaza Strip, and the political aspirations of the Palestinians to establish a Palestinian state.
Under Binyamin Netanyahu's government, Jewish settlements expanded - the total population grew from 130,000 to approximately 200,000. Apart from granting settlers various tax advantages, a road-construction program was undertaken to link the settlements in order to foster economic growth - which, in the process, fragmented and constricted the growth of Palestinian communities.
A continuation of these policies will clearly be a major stumbling block in future negotiations with the Palestinians. However, in his coalition-building efforts to form a government with a broad political spectrum, Barak has included the National Religious Party, which represents the interests of West Bank settlers. This decision does not bode well for Barak's taking an innovative approach to the settlement issue.
Unless Barak formulates bold policies to stop the construction of new settlements, to dismantle some settlements, to consolidate others, and to provide financial incentives for settlers to transfer their homes to Israel proper, the settlement issue will continue to be a major impediment to concluding a land-for-peace agreement with the Palestinians. Ideally, all settlements should eventually be dismantled. There is surely no compelling reason why 200,000 Jewish settlers should hold hostage the peace process of about 5.8 million Israelis and about 2.3 million Palestinians. To induce the settlers to leave peacefully, Barak's government should provide them with ample financial incentives to resettle in Israel. Such inducements, however, may not be sufficient to persuade fundamentalists among the settlers to depart peacefully from what they call Judea and Samaria.
Significant progress on the settlement problem would facilitate negotiations of the terms for establishing a Palestine state. According to the 1993 Oslo agreement between the Palestine Liberation Organization (PLO) and Israel, a five-year interim phase of Palestinian self-government on the West Bank and Gaza was to ensue. This five-year phase ended on May 4, [1999], which prompted officials of the PLO to debate the question of establishing a Palestine state. In the absence of a final-status agreement between the PLO and Israel - stipulated by the Oslo agreement - Binyamin Netanyahu threatened Yasser Arafat with retaliation if he proceeded with his plan for statehood. As a consequence, the PLO decided to postpone this historic decision.
But, regardless of the gestation period, Palestinian statehood is a foregone conclusion. Some rudimentary building blocks of statehood are already in existence: a legislature (the Palestinian Legislative Council); an executive branch (a revered leader, Arafat, who still commands the grudging respect of most, if not all, of his fellow Palestinians, and a Palestinian cabinet); a law enforcement system of thousands of police officers; an airport; national symbols (flag and anthem); and, last but not least, an expanding territory.
To be sure, there are many seemingly intractable problems requiring negotiations between Israelis and Palestinians, including an equitable distribution of water resources, control of borders, the refugee problem, the percentage of West Bank land to be ceded to Palestinians, the status of East Jerusalem, and so on. These and other problems would lend themselves to mutually acceptable solutions if Barak were to explore a confederation proposal, advanced in 1991 by the Jerusalem Center for Public Affairs.2
The purpose of this essay is to provide a rationale for a confederation of Israel, Palestine and Jordan.

Concept of a Confederation

In a confederation, "constituent states retain... their political independence but band together in perpetual union under a common constitution to form a joint government for quite specific and limited purposes... The appeal of a confederation is in its provision of greater autonomy for the constituent units...."3
In his 1991 book, Daniel Elazar, a well-known scholar on federalism, set forth 11 possible federal proposals for the Arab-Israeli conflict.4 However, writing as he did, before the Oslo Accords and before the signing of a peace treaty between Israel and Jordan, Elazar did not entertain the option of a confederation of Israel, Palestine and Jordan. Another reason is that Elazar did not believe that a Palestine state on the West Bank and Gaza would be a prudent risk, either politically or militarily. Like some other Israelis, Elazar evidently subscribed to the idea that Jordan is, in effect, a Palestine state, since the majority of its inhabitants are ethnically Palestinians.
Shimon Peres is now a strong advocate of a Palestinian state, but when he wrote about it in 1993,5 he advocated a confederation quite different from the tri-state proposal advanced in this essay: "The political structure best suited to the limitations and possibilities of the area is a Jordanian-Palestinian confederation for political matters, and a Jordanian-Palestinian-Israeli 'Benelux'arrangement for economic affairs..."6 by which Peres means a customs union.
There are a number of confederations in existence, of which Canada and Switzerland are two noteworthy examples. Canada's confederation consists of 10 provinces, one of which is Quebec. For many years, a secessionist movement has been active in Quebec, a French-speaking province that seeks to free itself from the domination of the English-speaking provinces. In a recent referendum in Quebec, a secessionist proposal was narrowly defeated. The Canadian government has sought to counter the Quebecois secessionist movement by revising its constitution to further protect the economic and cultural interests of the population of Quebec.
In 1991, Switzerland celebrated the 700th anniversary of the founding of its confederation. Surmounting political, religious, linguistic and other divisions - not to mention recurrent military incursions - 26 cantons were established, providing for cantonal autonomy and democracy. Under the 1874 constitution, the cantons hold all power not specifically delegated to the federal authorities. The durability and success of the Swiss confederation are remarkable considering that it integrates diverse cultural populations: Italian, French and German.
Unlike some of the confederations that have foundered, Canada and Switzerland have succeeded in meeting the expectations of its citizens of diverse cultural and linguistic backgrounds by safeguarding two fundamental institutions: democratic governance and constitutionalism. These appear to be two prerequisites for a successful confederation. As Elazar put it, "...No federation or confederation could work unless all its constituent units were governed democratically...."7 The fact that only one of the three states, namely Israel, presently claims to fulfill these two prerequisites, is a problem that would have to be addressed in the process of developing a confederation.
Jordan, a constitutional monarchy, is introducing some limited democratic forms by virtue of the fact that the royal family has granted the people the right to organize parties and hold democratic elections "even if their platforms do not match the King's ideas."8
The political situation in Palestine has not yet progressed in the direction of full democratization, for though Arafat was elected in legitimate elections, there is much to criticize, especially as regards human rights. The transition of Jordan and Palestine to full-fledged democratic polities is essential not only for the success of the confederation, but also for peace and security in the Middle East. For, as Russett and other political scientists have observed, democracies do not, as a rule, wage war against one another.9
While creating a new political authority, the proposed confederation would preserve the integrity of the three constituent states. Whatever joint confederal functions are consensually agreed upon would be incorporated in a constitution to govern the confederation.
Each of the three constituent states would benefit from joining such a confederation. By identifying areas of commonality, significant economic and political developments could be achieved. Several examples of joint efforts will be outlined to make the point.

Some Benefits of Confederation

A Common Labor Pool. Eliminating barriers to the free movement of labor would activate market forces to the mutual benefit of the three states. Large reserves of unemployed Palestinians would seek jobs in Israel; similarly, substantial numbers of unemployed Jordanians would freely move across the Jordan River in search of jobs. The flow of labor, however, would not be in one direction only. Israel has a surfeit of Soviet-trained engineers and scientists who are presently underemployed. If they could cross the borders of Palestine and Jordan, they could perform an entrepreneurial function in developing small and medium-size enterprises.

Israeli Entrepreneurship and Capital. New economic opportunities in Palestine and Jordan would beckon Israeli entrepreneurs who have innovative ideas as well as access to capital markets. This would introduce a new element of dynamism in the economies of Jordan and Palestine. Jordanian and Palestinian entrepreneurs would be able to tap into Israeli experience in accessing global financial sources of capital. Joint ventures by Israeli, Jordanian and Palestinian entrepreneurs would flourish in the course of time.

Developing Ports of Commerce. Each of the three states has ports that are presently underdeveloped. Expanding and modernizing them would have a catalytic effect on exports and imports from around the world. Large infrastructure projects, such as ports, have to enjoy a certain minimum level of usage for economies of scale to kick in. If each country insists on building and operating individual ports, none of these facilities would achieve the threshold of usage necessary for cost savings to materialize. Such large infrastructure projects as ports are ideally suited for joint ventures to avoid duplication of facilities. For example, the port project in Aqaba, Jordan, if it were undertaken jointly with Israel, would greatly expand commerce for both countries.

Developing Water Resources. The Middle East has one of the most acute water shortages in the world. Syria and Iraq are at the mercy of Turkey for the waters of the Tigris and the Euphrates. Jordan is hostage to Syria upstream - for water of the Yarmuk - and to Israel downstream - for water of the Jordan River. Israel's water comes from three main sources: the Sea of Galilee, which is fed by the Jordan River; and two aquifers, one of which is in the occupied territories of the West Bank. This problem is on the agenda of the ongoing negotiations. The present inequitable allocation of water resources is evident when one compares the annual consumption in cubic meters for all purposes (domestic, industrial and agricultural) of Israel, Jordan and Palestine (West Bank and Gaza).

Annual Per-Capita Consumption of Water in Cubic Meters for All Purposes

Average Consumption

Israel ....................................................................... 400 - 450
Jordan ..................................................................... 173 - 185
West Bank .............................................................. 110 - 170
Gaza ....................................................................... 75 - 110

Sources: Peter Glick, Water in Crisis, Oxford University Press, 1993; U.S. National Academy of Sciences, Water for the Future, 1999; Thomas Naff, Amer Middle East Water Data Base.

A confederation would highlight the need for exploring joint efforts to develop new sources of water, instituting a program of conservation and achieving a more equitable allocation of water among the three states. Admittedly, because of its much higher level of economic development than either Palestine or Jordan, Israel requires more water resources. For this reason, Israel is presently negotiating with Turkey to deliver several million cubic meters of water per year to Israel by pipe or tanker or "medusa" bag. While this strategy might solve some of Israel's water problems, it would leave the serious water conflicts with Palestine and Jordan unresolved. On the other hand, a confederation would, in principle, enable the three states to cooperate in planning for the development of new water supplies, e.g., by investing in a program of desalination - a project that would very likely elicit financial support from the World Bank. It is noteworthy that Israel is now considering helping fund the development of three multimillion-dollar desalination plants in Egypt to meet the needs of both countries.10

Development of Infrastructure. Palestine and Jordan are both in need of extensive development of their infrastructure - such as roads, bridges, sewage plants, utilities, etc. - if their economic development is to be accelerated. A confederation would facilitate this and increase the chances that the World Bank would support such development projects, since multilateral agencies may balk at providing funds for facilities that are cost-efficient only if they are used close to capacity. The laws of economics, instead of parochial national considerations, should guide such decisions. Infrastructure developed from the perspective of a confederation, rather than within the framework of individual countries, is likely to be much more cost-effective.

Development of Tourism. Tourism, one of the fastest-growing industries in the world, would be substantially stimulated by the establishment of a confederation of Israel, Palestine and Jordan. According to the Yearbook of Tourism Statistics,11 Israeli tourism revenues increased close to threefold from 1990 to 1997 (from $1.4 billion per year to $3.4 billion), whereas Jordan's tourism revenues remained almost static ($336 million to $376 million). With the elimination of the present relatively impenetrable borders between the three states, tourists, especially religious pilgrims eager to visit biblical sites, would very likely flock to all three states.

Progress Toward a Middle East Common Market. The proposed tri-state confederation would enable the parties to take the first critical steps toward implementing an idea considered for many years, namely, the establishment of a Middle East Common Market. When Israel finally enters into peace treaties with Syria and Lebanon, these countries, along with Egypt, could also become members of the Middle East Common Market. The European Common Market experience is an inspiring model to emulate: France and Germany, bitter enemies in the Second World War, established the Coal and Steel Community in 1952, thus developing a program of economic cooperation which led, decades later, to the formation of the European Union. A similar process could well develop in the Middle East.

Health Care Systems. The foregoing examples of joint confederal efforts need not be confined to economic activities; they could also extend to the social realm. As a highly industrialized country, Israel has a well-developed health- care system. And yet, like other Western countries, it suffers from a maldistribution of physicians, clinics and hospitals. Advances in telecommunications technology, namely, developments in telemedicine, are seeking to overcome this problem. Israelis living in the north and south of the country, at considerable distances from medical centers in Jerusalem, Haifa and Tel Aviv, are the beneficiaries of advanced medical care by experts with the help of telecommunication satellites. Telecardiology and teleradiology are prime examples of the application of telemedicine. This technology could readily be applied to the extensive health-care problems of Palestine and Jordan, where the health-care facilities are relatively underdeveloped.

Political Multiplier Effects. The defense budgets of Israel and Jordan could be substantially reduced as a result of joining a confederation. Progress in turning swords into plowshares would encourage the signing of peace treaties with Syria and Lebanon. Thus, a regional peace dividend could be achieved, which in turn could contribute to a global peace dividend.

Problem of Refugees. Another highly contentious problem is the plight of the millions of Palestinian refugees dispersed in Lebanon, Syria, Jordan, the West Bank and Gaza since the war in 1948. Palestinians argue that they, like the Jews, are entitled to a "right of return" to their homeland. The establishment of a Palestinian state would enable the new state to absorb a portion of the estimated 3.5 million refugees. A confederation would seek to address the problem of the Palestinian Diaspora by exploring the feasibility of resettlement as well as a program of compensation and reparations.

Status of Jerusalem. Such a confederal arrangement could provide the framework for solving the much-contested and highly emotional problem of Jerusalem. Jewish fundamentalists, dedicated to the building of the Third Temple, are as fervently devoted to the eventual coming of the Messiah as are Christian fundamentalists to the Second Coming of Jesus, and Muslim fundamentalists to the coming of the Mahdi, the Muslim Messiah.12 Instead of dividing this historic city, a "Solomonic" solution would be to preserve it as a united city for all three monotheistic religions, but not necessarily under the exclusive control of Israel. It could become simultaneously the capital of Israel, the capital of the new Palestine state, as well as the capital of the confederation. Finally, the principal holy places - the Temple Mount, the Western Wall, the Dome of the Rock, Al-Aqsa Mosque, the Holy Sepulcher, etc. - could come under the joint rule of the three states forming the confederation.

Need for an International Commission to Develop Plans for the Confederation

The foregoing examples of joint efforts through a confederation are intended to underscore opportunities for mutual benefits from cooperative ventures. A commission comprised of the ministers of economics, finance and trade of Israel, Jordan and Palestine, could develop detailed confederation plans that could be implemented early in the new millennium.
One of the tasks of such a compromise would be to elicit the political and economic support for the confederation of the U.S. and the European Union. It would also be important for the commission to seek to overcome any opposition from Arab states, especially from the neighboring states of Syria and Lebanon. It is very likely that Egypt would be supportive of the confederation, and that Saudi Arabia would, at least, not oppose it. Last, but not least, the commission would have to secure the cooperation of multilateral agencies, such as the International Monetary Fund and the World Bank, to provide funding to implement the establishment of a confederation.


From a geopolitical standpoint, a confederation of Israel, Palestine and Jordan is an idea whose time has come. Developing a detailed blueprint for a confederation is obviously not feasible or necessary at this juncture. The crucial question is whether Prime Minister Ehud Barak has the courage and vision to lead Israel toward a new era of peace and cooperation with its neighbors. If he does, he may discover that a confederal form of government is a strategic political mechanism for achieving durable peace and cooperation in the Middle East.


For admirable assistance in the preparation of this paper, I would like to thank Fritz Dambrick. For invaluable comments on the paper, I am indebted to Lalit Aggarwal, Robert U. Evan, Hocine Fetni, Samuel Hughes, Samuel Z. Klausner, Andrew T. Lamas, Thomas Naff and Tayyeb Shabbir.

1. Shimon Peres, one of the architects of the Oslo Accords, deserves recognition for his sustained and imaginative commitment to the Mideast peace process. See Shimon Peres with Aryeh Naor, The New Middle East, New York: Henry Holt, 1993.
2. Cf. Daniel J. Elazar, Two Peoples, One Land, New York: University Press of America, 1991, p. viii. For a recent discussion of a confederation proposal, see Shosh Shor, "From Sword into Plowshare: Regional Arrangements for Israel and Palestinians?" Jerusalem Letter/Viewpoints, Jerusalem Center for Public Affairs, No. 411, 1 August, 1999, p. 2.
3. Ibid., pp. 43, 106.
4. Ibid., p. 101.
5. Peres with Naor, op. cit, p. 175.
6. Ibid., p. 173.
7. Elazar, op. cit. p. 106.
8. Peres with Naor, op. cit, p. 177.
9. Cf. Bruce M. Russett, Grasping the Democratic Peace: Principles of a Post Cold-War World, Princeton, N.J.: Princeton University Press, 1993.
10. Stephen J. Glain, "Arab Investment Stirs: With Peace or Without," Wall Street Journal, September 20, 1999, p. 1.
11. Madrid: World Tourism Organization, 1999, Vol. 48, pp. 106, 117; Vol. 51, pp. 117, 124.
12. Jeffrey Goldberg, "Israel's Y2K Problem," The New York Times Magazine, October 3, 1999, pp. 38-43, 52, 65, 76-77.