Voices from the Arab Press: Trump plan, Palestinian state, Gaza economy

In the early 1990s, political scientist Samuel Huntington, author of the “Clash of Civilizations” thesis, introduced his theory of the “third wave of democratization.” He argued that transitions from authoritarian to democratic systems occur in successive waves, each shaped by its own temporal and geographical context, causal mechanisms, and international variables. Huntington noted that such transformations are not linear but occur at “critical thresholds” that trigger snowball or domino effects, producing both quantitative and normative momentum that redefines political balances and institutions.

The first wave, between 1988 and 1995, emerged against the backdrop of the waning bipolar order as the US and the Soviet Union redefined the global balance of power. It coincided with the First Intifada in 1987 and the Palestinian declaration of independence the following year, which prompted widespread recognition – mainly from the Arab and Islamic worlds, the Non-Aligned Movement, Africa, and the Eastern Bloc, with limited support from Latin America. Western Europe and the US, however, abstained.

The 1993 Oslo Accords marked the “critical threshold” of this wave, replacing the demand for full statehood with the concept of limited Palestinian autonomy under Israeli oversight. Though this phase endowed the Palestinian cause with symbolic and representative legitimacy, its impact was constrained by the prevailing international power structure. Recognition during this era, concentrated outside the Western sphere, served to consolidate political representation rather than to generate coercive mechanisms capable of altering realities on the ground.

The second wave, between 2009 and 2014, unfolded in a unipolar world dominated by the US but increasingly shaped by emerging regional powers. Its starting point was Palestine’s 2012 upgrade to “nonmember observer state” at the UN, a development that catalyzed a series of recognitions extending beyond traditional allies in Africa, the Islamic world, and the former Eastern Bloc to Latin America, where between 2009 and 2011 countries such as Brazil, Argentina, Peru, Ecuador, Uruguay, Honduras, and Chile recognized Palestine. This period transformed recognition from a symbolic gesture into a structured process, supported by legal and economic mechanisms that reduced the political cost of joining the movement.

The “critical threshold” came in 2014, when Sweden became the first Western European nation to recognize Palestine, signaling a shift from peripheral endorsements to recognition within the institutional heart of the Atlantic order. This evolution set the stage for the third wave, spanning 2014 to 2025, when recognition of the two-state solution migrated from the Global South to the Western core amid the erosion of unipolarity, the rise of multipolar competition, and the moral shock of Israel’s devastating war in Gaza.

For the first time, all permanent members except the US aligned on recognition, transforming it from a moral preference into an emerging normative obligation. Saudi diplomacy played an instrumental role in forging this consensus, melting the proverbial “snowball” that rolled from the French Alps across Europe and consolidating a rational framework for negotiation grounded in strategic calculation rather than emotion or rhetoric.

This phase represented a geographic and structural shift in the “center of gravity” of recognition – from the Global South and East to Western Europe – raising the total number of recognizing states from roughly 150 to 157, a bloc with substantial institutional weight. The entry of France and Britain lent the Palestinian cause unprecedented political and moral force, not merely through numbers but through the influence and global leverage of the actors involved.

As major Western recognitions accumulated, the political risk of joining the consensus declined, moving hesitant states from neutrality to alignment. The greater the integration of these recognitions into legal and economic frameworks, the more likely they are to transform from symbolic statements into instruments of policy enforcement and behavioral constraint.

Nonetheless, the path toward binding recognition remains contingent on the emergence of a unified Palestinian political authority capable of monopolizing legitimate force and functioning as a modern state. This entails ending internal divisions that offer skeptics a pretext for nonrecognition. The consensus among states supporting the two-state solution to exclude Hamas from future governance underscores this condition and dismantles one of Prime Minister Benjamin Netanyahu’s core arguments against recognition.

Internationally, US recognition of Palestine would represent far more than a numerical addition to the list of endorsing states. It would recalibrate global incentives by raising the cost of nonrecognition from symbolic disapproval to tangible political and legal repercussions. It would also anchor Palestinian legitimacy within both the Atlantic system and multilateral institutions.

While the likelihood of US recognition depends on political alignment – most plausible under a Democratic administration and a more pragmatic Israeli government – any such step could either conclude the third wave or inaugurate a fourth. In that case, recognition would evolve from moral symbolism to a codified, binding framework accompanied by enforceable legal and economic mechanisms – cementing the two-state solution as the most rational and sustainable outcome available to both local and international actors.

Since Oct. 7, 2023, the Gaza war has become far more than a military confrontation – it is also an economic earthquake, shaking the foundations of both the region’s strongest and weakest economies while casting a long shadow over the global financial system. Data from the World Bank, the UN Development Programme, and other international institutions confirm that the war’s ripple effects are vast, distorting growth rates, fiscal balances, trade routes, and supply chains across continents.

By mid-2025, prices in Gaza had skyrocketed: Food costs surged between 300% and 450%, factories and farms shut down, and most productive sectors ground to a halt. For Gaza, recovery will take not years but decades.

Israel, despite its advanced financial institutions and diversified economy, has not escaped unscathed. In 2024, the government poured roughly $31b. into military spending, pushing the budget deficit to about 7% of GDP. The central bank has kept interest rates at 4.5% amid relentless geopolitical uncertainty, while growth has slowed, investment has waned, and government borrowing costs have climbed. The country’s credit ratings have been downgraded, and its once-dominant tech sector – long the engine of economic dynamism – is now suffering from a brain drain and a palpable loss of investor confidence. Though technology remains a relative bright spot, long-term stability depends entirely on a return to security and political calm.

Egypt, meanwhile, faces one of the gravest economic shocks in decades. Traffic through the Suez Canal – a crucial source of hard currency – plummeted by nearly 60% in early 2024 due to Houthi attacks in the Red Sea. Annual canal revenues fell to $4b., down from $10b. the previous year, a staggering 65% decline, with monthly losses sometimes reaching $800 million. The blow to tourism and foreign investment has deepened Egypt’s foreign currency crisis and widened its current account deficit, leaving a gaping financing gap that threatens overall stability.

Jordan, though spared direct conflict, has suffered steep declines in tourism: Hotel occupancy in key destinations like Petra has at times dropped below 10%. Even with support from Gulf visitors and IMF programs, the vulnerability of the tourism sector poses risks to the balance of payments and overall growth.

The economic aftershocks extend far beyond the Middle East. The Red Sea, now a theater of attacks on commercial vessels, has forced major shipping companies to reroute through the Cape of Good Hope, adding 10 to 15 days to voyages and inflating transport and insurance costs by more than 300% in some cases. These disruptions have compounded global inflationary pressures, particularly in Europe, and disrupted the flow of vital goods such as energy and grain.

The main issue today is not Hamas’s formal response to the American proposal – whether acceptance, rejection, or reservation – but rather the internal struggle over power and decision-making within the movement itself, amid deep tensions shaping its direction and future. These divisions persist regardless of the dire situation inside the Gaza Strip, which faces the threat of a full-scale invasion as Israeli forces advance on Gaza City.

Netanyahu aims to exploit the turmoil within Hamas, regardless of the pressure on the movement to reenter negotiations and launch a new phase. Decision-making has largely shifted to Hamas’s military wing inside Gaza, while the organization’s external leadership remains subdued, fearful of targeted assassinations despite US assurances to Qatar regarding their safety. Still, all scenarios remain possible with Israel, particularly as the political bureau abroad calculates its own priorities – chiefly how to preserve internal cohesion and maintain some semblance of unity among its competing factions.

Some within Hamas argue for transforming the movement into a political party, a shift that would push it toward limited political participation while deferring the question of disarmament. In this vision, Hamas would position itself as an alternative to the Palestinian Authority in the event of elections.

The fate of Hamas’s leaders remains uncertain following Israel’s strikes on Qatar. Discussions are underway about relocating them – whether to remain in Qatar or move to Turkey, Mauritania, or even Algeria. Malaysia was considered but ruled out for security reasons. For now, the decisive figures within Hamas appear to be Izz al-Din al-Haddad and Ra’ad Sa’ad, who effectively command the organization’s internal direction. While the political bureau in Qatar manages negotiations, ultimate authority rests with the military commanders on the ground, who will determine whether to continue the fight in Gaza or end the war. Both Sa’ad and Haddad top Israel’s most-wanted list, suggesting that the military wing within Gaza, not the political leadership abroad, will make the final call.

This dynamic points to a potential shift in the balance of power within Hamas, as internal divisions deepen between the faction led by Muhammad Darwish and Khaled Mashal, and another group aligned with Khalil al-Hayya, Mohammad Nazzal, and Ghazi Hamad. These rifts signal a broader crisis within Hamas that could shape its political and military orientation in the months ahead, potentially elevating new leaders both inside Gaza and within the external bureau.

A strange epidemic seems to be sweeping through Israel, one that has clouded reason and stifled any space for moral reflection. Only a handful of thinkers and public intellectuals appear to have escaped its grip. Some might argue that this epidemic is not new at all – that it has existed for decades but that the world has only now begun to grasp its true nature.

At the same time, Israeli television commentators indulge in heated discussions about what they claim are Egypt’s “violations” of the peace treaty. One panelist went so far as to say that Egypt’s refusal to accept Israel’s demand to relocate Gazans into Sinai represents a breach of peace itself – because, in his words, Cairo “does not consider Israel’s needs.”

The essential truth, which must be remembered, is that Israel’s ability to ignite multiple fronts, sustain its wars, and withstand international condemnation rests squarely on one foundation: unwavering, unconditional American support – military, economic, and political.

What passes for internal dissent in Israel is little more than partisan bickering that avoids questioning the state’s underlying policies of aggression. Even mass protests are largely confined to narrow domestic disputes – over conscription, family issues, or government incompetence – not over the moral catastrophe of occupation or war crimes. Those who truly oppose the government’s direction often choose exile, leading to a demographic and ideological stratification in which the most hardline and nationalistic elements remain dominant.

In essence, what we are witnessing is a collective pathology – an epidemic of extremism that Netanyahu’s government both embodies and amplifies. With the backing of a majority sufficient to pass its policies “democratically,” this government has normalized a worldview built on entitlement: the right to expel the Palestinians of Gaza and the West Bank, the right to displace even the Arab citizens of Israel from 1948, the right to claim all of historic Palestine, and the right to occupy the lands of neighboring states.