Palestinians’ United Nations Push Could Backfire

Israel and the United States can withhold tax revenue and financial aid.

Palestinian president Mahmoud Abbas has made it clear that he will formally push for an enhancement of Palestinian status at the United Nations sometime in November. What is also clear is that Abbas’ effort, unlike his attempt at the Security Council last year to gain full member state status, is almost certain to succeed. With the General Assembly traditionally dedicated to the Palestinian cause and with no American veto of the measure impossible, the resolution will pass by a simple majority vote.

What is less certain, however, is how Israel and United States will react in the event that the Palestinians achieve their goal. A successful vote in the General Assembly would give the Palestinians the right to join a number of multilateral organizations for the first time, including the International Criminal Court, where Palestinian representatives could plausibly charge Israel for war crimes. For a country that has long used the concept of national security to justify its occupation of the West Bank and its embargo of the Gaza Strip, Palestinian membership of the court would serve as a legal headache for the state of Israel.

All of this begs the question: what measures will Israel take to counter, or punish, Abbas’ United Nations campaign? The United States presumably would support Israel in any countermeasure that is deemed reasonable. Obama Administration officials have argued that a unilateral Palestinian move at the United Nations would hurt the chances for a negotiated, final status peace agreement.

Israeli newspaper Haaretz reports that Prime Minister Benjamin Netanyahu and his allies are already combing through a list of options that they can take once the Palestinians acquire their “nonmember state” upgrade.

One option under consideration, withholding tax revenue that is collected on behalf of Abbas’ Palestinian Authority, has been used by the Israelis in the past when disputes arose over the peace process. A large chunk of the Palestinian Authority’s revenue comes from the taxes and customs duties that the Israelis collect and transfer to Ramallah. A decision to withhold those transfers could lead to the worsening of a financial cash crisis that economists ay is the worst in the Palestinian Authority’s eighteen year history.

Another option being mulled by Israeli policymakers is a total boycott on talking, dealing with and communicating with Mahmoud Abbas as long as he remains president. The Israelis used a similar policy with respect to the late Yasser Arafat when they no longer believed that he was interested in formulating a lasting peace. This policy would pack a major punch but also be incredibly rash. Washington would be likely to oppose it, seeing Abbas as the best hope for dialogue that the Israelis have had in a long time.

The Obama Administration may also decide to make its displeasure known by ratcheting up its own pressure. As was hinted by American officials during Abbas’ Security Council plan last year, donations and funding to the Palestinians could be put in jeopardy. The United States are the single largest financial contributor to Abbas’ West Bank government. Washington provides (PDF) close to $500 million in aid this year alone.

That funding could be threatened thanks to American legislation already on the books which mandates Congress and the White House to cut off funding for the Palestinians if their government acquires “the same standing as member states or full membership as a state in the United Nations or any specialized agency […] outside an agreement negotiated between Israel and the Palestinians.”

Depending on how the law is interpreted, an attempt by the Palestinian Authority to increase its United Nations representation from an “observer entity” to a “nonmember state” could possibly meet the criteria of an American aid block.

So while Abbas will receive the support he needs to attain more prestige at the United Nations, he will confront some very uncomfortable, if not painful, reprisals after the vote ends. With his government facing a terrible fiscal crisis, the Palestinian leader may well have to justify to his people why a greater voice in New York is more important to their cause than an administration that can pay its bills.