Cables From The Diplomatic Frontlines - As Blinken engages in shuttle diplomacy we revisit the essential preconditions for a durable peace.

In spite of major obstacles, a two-state solution is achievable - Biden has sufficient levers to pull off a historic diplomatic breakthrough.

• Things are once again moving fast in the Middle East.

• After years of crystallizing status quo, conditions finally exist to enable a realistic diplomatic breakthrough between Israel and Palestine.

• A number of stakeholders have incentives to resolve the Gaza and West Bank issue once and for all.

• We have previously looked at the incentives behind the Saudi proposal for peace: recognition of Israel, and investing into reconstruction (together with the UAE) in exchange for a ‘‘pathway’’ to a Palestinian statehood.

• First off, it is a good cover and an excuse to get back to the normalization process.

• With Iran edging ever closer to acquiring a nuclear bomb (with its skies soon better protected with Russia’s Su-35s and S-400 air defense SAMs) Saudis are eager to snatch a closer defense pact with the US.

• But for that to even be on the table (their ideal scenario of a full-on security guarantee is likely to be dismissed - but some commitment of specific weapons/supplies/guarantees from Washington may still prove to be a major win for Saudis) they will need to recognize Israel.

• And how could they do that right now?

• In the middle a humanitarian catastrophe in Gaza?

• Ignoring the Palestinian plight would crush their credibility and aspirations for Arab leadership completely.

• So they need an excuse to restart these talks.

• And if they succeed in actually achieving their end-goal of forming a Palestinian state, then they will get to promote their diplomatic heft.

• Saudis would claim credit for ending the Gaza war, and for their major role in forming a sovereign state of Palestine.

• If they fail however, they can reframe it as an earnest effort, highlight Israel’s unreasonableness and intransigence, and remain in a position to seek their original security guarantees from the US by pointing out that they (Saudis) did ‘‘everything that they could”, but that Israel was the spoiler.

• Win and claim massive credit.

• Lose and reframe it as failure of all - of the entire international community failing to overcome Israeli intransigence.

• So it is mostly all upside for Saudis.

• That Saudis and the UAE have strong incentives to resolve the Palestine issue (and legitimize their normalization with Israel, while weakening Muslim Brotherhood offshoots like Hamas) is pretty clear.

• Add to that, Egypt is also increasingly anxious to solve this problem once and for all.

• For a start, creation of a Palestinian state would put a decisive end to a wild (far-right) Israeli ambition to deport Gazans into (Egypt-controlled) Sinai.

• But the humanitarian crisis, possibility of Hamas fighters moving into Egypt (and forming another/new base for Muslim Brotherhood - challenging & destabilizing Al-Sisi’s regime) and significant reduction in revenue from fewer Suez canal crossings (due to Houthi attacks in the Red Sea) are all causing additional headaches for Cairo: and for a country already on the brink and in need of IMF bailouts, the desire to end this conflict (and do its own part in accomplishing this) is strong.

• In other words, key stakeholders are on board - with the exception of Israel.

• Public mood in Israel has changed drastically following October 7th attacks.

• Whereas previously, the majority of Israelis (61%) supported the idea of a Palestinian state - this has now reversed: with 65% now opposing it.

• In addition, Netanyahu has also repeatedly ruled out recognition of Palestine.

• He will continue to argue that this would be unacceptable to Israel’s national security needs (the very opposite of truth), and will use this new opposition to ‘‘external/global pressure on Israel’’ to attain new grounds for legitimacy - hoping to extend his rule further.

• But with that said, the levers to sway all stakeholders - including Israel - are available to the Biden admin.

• To be clear, there are formidable obstacles to surmount, and an utmost level of diplomatic finesse will be needed to attain this outcome.

• But the levers are there, and in combination with certain fortuitous changes on the ground, conditions to resolve this long-standing issue do exist.

• So what needs to happen for a two-state solution to become a reality?

• The following elements must be in place: