Palestine is unrecognisable on the ground

The Economist
Published on: Sept 22, 2025 12:30 pm IST

Even as Western governments promise statehood, Palestinians increasingly despair of its realisation.

Editor’s note: On September 21st Australia, Britain and Canada formally recognised Palestinian statehood

A Palestinian child walks away with a pot of rice obtained from a charity kitchen in the Nuseirat refugee camp in the central Gaza Strip, amid a UN-declared famine after nearly two years of war.(Eyad Baba/AFP) PREMIUM
A Palestinian child walks away with a pot of rice obtained from a charity kitchen in the Nuseirat refugee camp in the central Gaza Strip, amid a UN-declared famine after nearly two years of war.(Eyad Baba/AFP)

The gulf between the vision and the reality could hardly be wider. Britain, France and other states—but not America—are on the point of formally recognising Palestinian statehood. On the ground that would-be state is sinking from view. Israel’s army has reduced Gaza to an occupied wasteland. Bezalel Smotrich, Israel’s finance minister, is starving the Palestinian administration of the taxes that keep it alive. On September 3rd he presented a map with his vision of annexation. It showed Israel controlling all but 18% of the West Bank, the territory Israel occupied in 1967 which would form the core of any future Palestinian state, and reduced its cities to six stranded islands.

Binyamin Netanyahu, Israel’s prime minister, talks of Greater Israel. His ultra-nationalist government has threatened to annex the West Bank if Western countries recognise a Palestinian state. In reality annexation has already happened. The irony is that the stronger the vision of Palestinian statehood grows on the outside, the more it fades within.

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To find what exists of a Palestinian state, head to Ramallah, for three decades the administrative showcase of the Palestinian Authority (pa), the putative government of a future Palestine. While Gaza has endured two years of devastation, Ramallah, high above Jerusalem in the occupied West Bank, still oozes charm. On its quaint cobbled streets, new bars, cafés and government buildings pop up each month. And yet it feels like a Potemkin village.

Most nights Israeli soldiers conduct raids, sometimes driving their jeeps flying Israeli flags around the muqata, the presidential palace, mocking its impotency. Even by day, the crack of their gunfire echoes in the city centre.

Meanwhile Israeli officials are waging an economic war. Since its establishment in 1994, the pa has depended on customs revenues that Israel collects on its behalf at its ports. Israel’s current government has blocked the transfer of those funds. The pa has cut employee salaries in half or more and is behind in paying them. To save money the pa delayed opening the schools for a week and has told functionaries and security forces to work a two-day week.

Worse beckons. The Palestinian banking system is tied to Israel’s. But Mr Smotrich has stopped Israeli banks corresponding with Palestinian ones so firms cannot pay for goods coming from Israel. Even during the depths of the second intifada, or uprising, containers from Israel entered the West Bank. But that traffic has slowed, too. “Within weeks, we’ll run out of basics and petrol,” says the head of the monetary authority, Yahya Shunnar. Palestinians used to be able to fall back on earnings as manual labourers in Israel. But since the attacks of October 7th 2023, Israel has barred them from entry.

Two miles beyond central Ramallah, even the facade of self-rule slips away. Israel’s separation barrier severs access to East Jerusalem, Palestine’s self-proclaimed capital. To reach the rest of the West Bank requires navigating gridlocked roads that are often subject to military closure. Journeys that should take minutes last hours.

Your land is my land

Once through, the landscape changes from Palestinian to Israeli. Steel Stars of David poke from the roadsides, which have Jewish names like Heart of Judah. Road signs point to Jewish settlements, not Palestinian towns. Often the Arabic transliterations of the Hebrew have been blacked out. A billboard in Hebrew salutes the Hilltop Youth, Jewish extremists on a mission to rid the land of Arabs.

These settlers have found ways of accelerating the land grab. Establishing legal settlements involves tedious red tape. Instead, settlers have created dozens of new farming outposts, which have quadrupled in number since 2018. They now cover 14% of the West Bank, according to Kerem Navot, an Israeli monitor. Some of the shepherds are so violent they were previously deemed too dangerous for conscription into Israel’s armed forces. Past governments called their raids pogroms, in which Jews were the perpetrators. But this one issues them guns and uniforms. Formally the state considers their farmsteads illegal. In reality it provides them with electricity, water, fences and military protection. And it turns a blind eye when they burn and destroy Palestinian olive groves and wells.

Military barriers cross the roads leading to Palestinian cities, towns and villages, turning them into an archipelago of sealed communities. Some 12 years ago Rawabi, a satellite of Ramallah built for Palestine’s elite at a cost of $1bn, opened to great fanfare. It boasted giant Palestinian flags, an amphitheatre and views stretching to Tel Aviv’s coastal skyscrapers. But settlers regularly come to rip down its flags, say residents. “Go back or I’ll shoot,” an Israeli soldier on the approach road orders this correspondent.

Palestine’s hypothetical capital, East Jerusalem, was annexed 45 years ago and has been purged of Palestinian symbols. Booksellers daring to stock books with Palestinian flags on the cover are arrested on suspicion of aiding terrorism. The road that used to go through East Jerusalem is now blocked, so the journey to Bethlehem and Hebron goes via a windswept checkpoint deep in the Judean wilderness.

On August 20th Israel issued the final approval for e1, a settlement bloc with 3,400 homes initially. It will cut the West Bank through its centre (see map). Bethlehem and Ramallah would be as disconnected as the West Bank and Gaza—once a short taxi ride apart—are today.

The pa might once have looked to Palestinians in Israel, who account for 20% of the population, to argue their case with Israelis. But as Jewish supremacists increase their power, so the influence of Israel’s non-Jewish citizens has receded. Each election the calls for Arab citizens to be stripped of their vote grow louder.

Any standing the pa might once have had has been eroded by its reticence over Gaza. “He had no word of sympathy or sorrow for the suffering of ordinary Gazans,” said a shocked Western commentator who met Mahmoud Abbas, the Palestinian president, on a recent foreign tour. Israel, Hamas and the Americans have excluded the pa from negotiations. No one relishes the prospect of its return to Gaza. The pa itself sounds nervous. “If we can’t rule the West Bank how will we ever rule Gaza?” asks a security official in Ramallah.

The acquiescence of Mr Abbas to the unravelling of Palestine has staggered even his closest supporters. Western recognition of Palestine should have been his moment, but “his team are asleep at the wheel,” a diplomat in Ramallah laments. Mr Abbas’s last media interview predates the war. He gave it to Chinese state television, mostly with his eyes closed.

With Israel, he has played his part in dismantling the Palestinian institutions that were intended to be the nucleus of a sovereign state. He dissolved parliament in 2007. The 89-year-old is now in his 21st year at the top. He rules by decree and represses public debate. Protests for Palestine rage the world over, but not in Mr Abbas’s realm.

Even as Western governments promise statehood, Palestinians increasingly despair of its realisation. The devastation of Israel’s onslaught in Gaza has taught most Palestinians the futility of armed resistance. Despite the relentless pressure in the West Bank, the appetite for confrontation with Israel’s army and settlers seems limited. Support for Hamas, which rose in the wake of its October 2023 attacks, has subsided. In recent elections for doctors’ and lawyers’ unions, Fatah trounced Hamas in most of the West Bank.

Many Palestinians simply want out. Estate agents say the property market in Amman, the capital of Jordan, is awash with new money from West Bankers seeking the safety net of a second home. Others are looking to European countries that fast-track citizenship applications when you buy property. Those that remain are focused on daily survival not long-term solutions. They just want the terror of the bombs, soldiers and settlers to stop.

Working with the enemy

And so a greater threat to their vision of their own state may be the fact that some are looking for further accommodation with Israel. Mr Netanyahu’s advisers talk of establishing a Hebron emirate, a self-governing municipality dealing directly with Israel. It would prise the West Bank’s most populous city, main economic hub, and key source of taxation away from the pa. It could pave the way for the West Bank’s incorporation under the Israeli flag.

The idea has its local supporters. For now, at least, most Hebronites would remain on their land and could benefit from direct ties with Israel. They have little love for the pa. The clans and merchant families who hold sway in Hebron have always paid their taxes to the pa grudgingly. London has more Palestinian flags than Hebron. Direct ties with Israeli banks would lubricate business. Some traders have already opened Israeli bank accounts. Others even dream of applying for citizenship and enjoying the same relative privileges as Israel’s Palestinian citizens. “We’re on our way to getting Israeli passports,” a gold merchant in Bethlehem predicts. “We’ll be free of this prison. Tourists will return and we’ll be able to travel.”

Compared with the sacking of Gaza, subjugation under Israel seems a benign option. Were Palestinians to be asked in a referendum whether Israel should rule them directly, many might assent.

But Israel’s Jewish population is less inclined to integration than ever. A survey in May showed over half wanted to exile Palestinians who have Israeli citizenship. Around 80% want to expel Palestinians from Gaza, almost double the rate of two decades ago, at the height of the second intifada. Many Palestinians fear that Israel could repeat in the West Bank what it has done in Gaza. The euphoria in New York has not reached Bethlehem. As one grocer there puts it: “We’ve learnt that the promise of change for the better always ends in change for the worse.”

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