The U.S. administration's Israeli-Palestinian “peace plan,” under President Donald Trump, has so far yielded only an inconclusive talkfest about economic development. The underlying rationale of the plan—that economics must come before any addressing of core political issues—is fundamentally flawed for several reasons. The biggest impediments to Palestinian economic development stem from aspects of the Israeli occupation that would continue under the plan, which rejects a two-state solution and is a slightly revised and renamed version of the current arrangement of limited Palestinian autonomy under Israeli domination. The plan flows directly from the Trump administration's policy of acquiescing in the preferences of the right-wing government of Israel. Accordingly, the political portion of the plan is indefinitely delayed and might never be announced. Keeping the full plan under wraps serves the Israeli government's purpose of holding out the promise of—but never delivering—peace with the Palestinians, while more facts are created on the ground.

In the opening weeks of his administration, President Donald Trump overturned a longstanding U.S. commitment to territorial partition and a two-state model for resolving the Israeli-Palestinian conflict. Israeli prime minister Benjamin Netanyahu seized the opportunity to demand “overriding security control over the entire area west of the Jordan River” while exploring regional approaches that bypass the Palestinians. At the same time, a host of Israeli politicians are reviving older models such as limited autonomy without political sovereignty and partial territorial annexation, or advocating for other forms of separation with Israel’s continued control. The resulting middle ground—neither two states nor one—poses a great risk to Palestinian self-determination. By situating recent developments in a broader historical context going back to the autonomy plan of Israeli prime minister Menachem Begin, this essay provides an overview of a shifting political discourse and examines the consequences for the fate of the Palestinians today.

This retrospective assessment argues that despite the arrival in office in 2009 of a president who articulated the case for Palestinian rights more strongly and eloquently than any of his predecessors, U.S. official policy in the Obama years skewed heavily in favor of Israel. While a negotiated two-state resolution of the conflict between Israel and the Palestinians continued to be the formal goal of the United States, Israel's defiant refusal to stop settlement expansion, the administration's determined actions to perpetuate Israeli impunity in international fora, as well as the U.S. taxpayer's hefty subsidy of the Israeli military machine all ensured that no progress could be made on that score. The author predicts that with all hopes of a negotiated two-state solution now shattered, Obama's successor will have to contend with an entirely new paradigm, thanks in no small part to the gathering momentum of the Boycott, Divestment and Sanctions (BDS) movement.