RON PUNDAK Israelis and Palestinians: the Price of Peace T he years of bitter conflict between Israelis and Palestinians, of undiscriminating Palestinian terrorism on the one hand, and on the other of occupation and humiliation imposed by the Israelis on the Palestinians, did not improve the positions of the two sides. Eventually, both parties understood that their respective interests could only be achieved at the negotiating table. Several processes lay at the root of this change, which brought the two sides to Madrid and later to Oslo. They were: ̈ the understanding by the Palestinian leadership that the conflict with Israel must be solved by political means, on the basis of the»two-States­for-two-peoples« solution; ̈ the success of the first Palestinian Intifada in the territories in the late 1980 s as an authentic natio­nal and popular struggle against the Israeli occu­pation; ̈ a change in the attitude of the Israeli public and politics regarding the occupation of another people, as well as Palestinian national aspira­tions; ̈ the rising power of Hamas and fundamentalist­Islamic currents in Palestinian society; ̈ the global geopolitical changes which have affected the Middle East. The first chapter of negotiations ended with the Oslo Agreement, which was signed on September 13 , 1993 , and culminated in the mutual recognition between the PLO and the Israeli government and in the handshake between Yasser Arafat and Yitz­hak Rabin. The Agreement stated that the time had come to end the conflict; to strive together to live in peace, coexistence, mutual respect and security; to reach a comprehensive, permanent and fair agreement; to achieve an historic conciliation; and to accomplish all these goals through negotia­tions. The two sides therefore began the negotia­tions on a permanent status between Israel and the PLO , which was expected to lead to a peace agree­ment between the State of Israel and a Palestinian State. Previously, the relations between the two peoples had been based on mutual hostility, with each side trying to attain achievements at the expense of the other side. Every victory won by one side was considered a defeat for the other, according to the principles of the zero-sum-game theory. In contrast,»Oslo« was, from the start, guided by efforts to abandon this approach, and to achieve as many win-win situations as possible, notwithstanding that the balance of power was tipped in Israel’s favor. In the past months, a violent confrontation has occurred between Israel and the Palestinians, in which each side has grossly breached the agree­ments signed. These events have created a mirror image based on which each side is convinced that the other side is responsible for the deterioration of the situation and that the other side is not pre­pared to reach an agreement based on concessions. At the same time, the reality of the peace process has proven to be stronger than the forces coun­tering it. Many of the patterns and facts on the ground that were created since 1993 continue to operate, and the objective of the two publics remains identical: to reach a peace agreement based on the principles of United Nations Security Council Resolution 242 and the two-States solu­tion. The»Price« of an Agreement The problematic nature of negotiations with the Palestinians lies in the fact that a majority of the Israeli public believes that it is required to pay the higher price. They believe that the Palestinians are receiving more and more land and sovereignty without having to pay a significant price in return. The high price paid by the Palestinians(even IPG 3/2001 Ron Pundak, Israelis and Palestinians: the Price of Peace 245