Why Israel needs a peace settlement

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THIS month marks the anniversary of two events that have produced a dilemma haunting Israel. Two decades ago, in June 1967, a victory in the Six-Day War left Israel in occupation of most of the Sinai Peninsula, the West Bank, the Gaza Strip, and the Golan Heights.

One decade ago, in June 1977, Menachem Begin and the Likud bloc took office.

Later in 1977, on his historic trip to Jerusalem, Egypt's Anwar Sadat offered Israel a comprehensive settlement with its neighbors on the basis of United Nations Resolution 242: recognition and secure peace in return for giving up all occupied areas and acceptance of Palestinian self-determination with suitable guarantees. Whether the other Arabs would have followed this lead will never be known.

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For Mr. Begin and Likud had a different vision. To them, the West Bank and Gaza were part of biblical Israel which they were determined to keep. And by stubbornness and guile, Begin twisted the Camp David accords to fit his concept. He agreed to trade Sinai for peace with Egypt. He also ostensibly agreed on a ``Framework for Peace in the Middle East,'' which called for other peace treaties based on Resolution 242, including a solution of the Palestinian problem by stages. It was soon clear, however, that Begin interpreted this commitment as justifying retention of the West Bank and Gaza and offering only limited autonomy to the Palestinian inhabitants. Inevitably the Palestine Liberation Organization (PLO) and other Arabs rejected the Camp David framework.

Begin quickly set about solidifying control of the occupied territories. East Jerusalem was formally annexed and Israeli law extended to the Golan Heights. Contrary to international law, a major program of heavily subsidized housing was launched to attract Israeli settlers to the West Bank and Gaza in order to create a domestic pressure group to block any future withdrawal. The total settlers rose from about 5,000 in 1977 to some 60,000 or more now.

The 1982 invasion of Lebanon, capitalizing on a neutral Egypt, was also related to retaining the West Bank. Wiping out the PLO and its bases in Lebanon was to remove the stimulus for Palestinian nationalism; and a pliant Lebanon tied to Israel would protect that flank.

Begin was helped by divisions within the PLO and among Arab states. Nor did the United States create any obstacle. When Begin flatly rejected the Reagan proposal of September 1982, it was not pursued; the US drew even closer to Israel and increased the huge annual subsidy.

Have Begin and Likud succeeded then in creating a fait accompli, making future withdrawals unfeasible? A map of settlements might seem so.

But the situation is not static:

The Palestinians in the West Bank and Gaza are becoming more radical, especially youths frustrated by repression, discrimination, and aggressive settlers.

Demography threatens the character of Israel over time. The Arabs in Israel plus the Palestinians now amount to about 2 million, nearly 40 percent of the total population, and have a higher birthrate. If Israel absorbs the Palestinians, it will ultimately become a binational state. If it subjugates them indefinitely, it will become another society based on apartheid. It will cease to be either a Jewish state or a democracy.

As violent resistance and harsh repression grow, Israel risks losing support in the US and elsewhere. Increasing dependence on Middle East oil will make stability in the area and good relations with the Arabs increasingly important.

Thoughtful Israelis and US supporters are deeply troubled by this prospect. They recognize the need for a settlement achieving secure peace based on withdrawal from the occupied territories and Palestinian self-determination.

Yet getting there before it is too late does not look promising. In Israel, despite Foreign Minister Shimon Peres's gestures, the Likud-Labor coalition that succeeded Begin is stymied. The electorate is split about equally on the issue. And despite King Hussein's efforts, the PLO and Arab states appear no more ready to take serious steps toward a settlement. The Reagan administration is too weak and preoccupied to provide essential mediation and pressure.

Yet the failure to act is likely to be tragic eventually for both Israel and the region. Those individuals and groups - in Israel, the US, and among the Arabs - seeking to promote a constructive solution deserve every support and encouragement.

Robert R. Bowie has been concerned with foreign affairs for nearly 40 years on the Harvard faculty, in government posts, and as a consultant.

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