Shrinking the Conflict: Debunking Israel's New Strategy

Summary

Walid Habbas’s Al-Shabaka policy brief argues that Shrinking the conflict — the approach introduced by Israeli historian Micah Goodman in 2018 and taken up by Israeli leaders since 2021 — is a revised version of Benjamin Netanyahu’s Economic peace model that manages the occupation of the West Bank, including East Jerusalem, and Gaza differently, ostensibly less oppressively, in order to entrench it permanently and prevent either a Palestinian state or a one-state reality (Shrinking the Conflict: Debunking Israel’s New Strategy, lines 141-143). Its economic core — a review of the Paris Protocol, Area C industrial parks under Israeli control, the Door-to-Door policy for Palestinian goods, and a larger, diversified Palestinian labor force in 1948 territories — entrenches Palestinian geographic and economic fragmentation and dependence in, in Habbas’s term, perpetual De-development (lines 147-149, 177-201). The brief’s conclusion is that the approach hinges on the fallacy that Palestinians can be pacified with so-called privileges: “any proposals that fall short of total dismantlement of Israel’s systems of apartheid, occupation, and settler colonization would bring neither an improvement to Palestinians’ lives, nor their acceptance of the status quo” (line 145).

What the file is

• An Al-Shabaka policy brief (topic: Economics), published Mar 6, 2023 as displayed in the text copy (lines 129-137), “16 min read”, downloaded from https://al-shabaka.org/briefs/shrinking-the-conflict-debunking-israels-new-strategy/ (access basis: NGO). The original is the HTML page; the text copy supplied with it (about 4,800 words, 367 newline-terminated lines plus a trailing blank line counted as line 368) is a plain-text rendering of that page, with no page markers, so locators are line numbers.
• The text copy includes the site’s frame around the brief: navigation and featured items at lines 1-128 and 223-367, including items dated September 2026 that belong to the page as captured, not to the 2023 brief. The brief itself runs lines 129-217: header and Executive Summary (lines 129-157), Overview and the sections below (lines 163-205), its four footnotes printed after the body (lines 207-213, checked against the original HTML, where each footnote marker’s title gives the same text), and the author’s biography (lines 215-217).
• Text quality: the brief’s prose is clean and complete in both copies. Three pull-quotations in the text copy are followed by “Share on X” page controls (lines 169, 177, 199), which are not part of the sentences; the line 199 pull-quotation repeats a sentence of line 205 in shortened form. Figure 1 (line 193) is an image in the original; only its caption and source line are present in the text copy, so the figure’s plotted values cannot be read from the text copy. The text copy gives the publication date as Mar 6, 2023, and the original HTML’s structured data gives datePublished as 2023-03-05T16:02:17+00:00 and dateModified as 2024-07-07T10:05:34+00:00; the displayed and structured dates differ by one day (see Open questions). The brief spells the former prime minister’s given name “Neftali Bennett” at line 173 (see Open questions).

Section by section

• Executive Summary (lines 139-157): as in the Summary. Since 2021 Israeli leaders have proposed policies to manage the occupation rooted in Goodman’s 2018 concept, offered as a solution to the rift between the so-called Israeli Left and Right; the approach presumes mainly economic shifts will eliminate the conditions that spur “clashes”, making the occupation more manageable and sustainable and the question of Palestinian self-determination through statehood obsolete (lines 141-151). Aspects were invalidated by Netanyahu’s far right-wing coalition’s victory in December 2022 — increased violent suppression in the northern West Bank, and a coalition pushing further dispossession and displacement — though the economic measures put in place since 2021 will likely continue to shape economic relations, and the new government’s commitment to deepening occupation will worsen suffering (lines 155-157).
• Overview (lines 163-165): restates the Executive Summary, quoting Goodman’s formulation of managing “the conflict below the threshold of war, while improving the fabric of life for the Palestinian population”; unlike “economic peace”, the approach is designed to reduce Palestinian “waves of terror and violent clashes” by purportedly broadening Palestinians’ freedoms within Israel’s system of apartheid; the brief examines the government’s new economic decisions and their potential serious and irreversible implications. Footnote 1 (line 207) states that all translations of Arabic and Hebrew sources in the brief were completed by the author.
• Unpacking the Concept of “Shrinking the Conflict” (lines 167-169): Goodman introduced the concept to bridge the Left, which called for ending the occupation to prevent a one-state apartheid reality, and the Right, which opposes any withdrawal from lands occupied in 1967; it is a new iteration of “managing the conflict” through “economic peace”, whose policies entrenched dependence while implementing oppressive military tactics and created a compliant Palestinian economic elite that worked with occupation authorities to violently suppress a defiant Palestinian street. “Shrinking” instead acknowledges the “Palestinian public desire for full civic rights” without ending the occupation or recognizing sovereign borders, on the racist assumption that Palestinians will acquiesce if oppression is eased and made less visible; it holds that confrontations stem from bitter living conditions, not the occupation per se. The Israeli “Left” is rapidly disappearing, and leadership is now arguably divided between a pragmatic right and an extreme right, both rejecting negotiations and Palestinian statehood (line 169).
• Creating the Illusion of Freedom (lines 171-173): the 2019 Initiative for Shrinking the Conflict, founded by Israeli students and young politicians on Goodman’s eight recommendations, has been part of almost every Knesset session discussing the Palestinian economy, Area C and Gaza; the approach appears in the New Hope party’s electoral program and was championed by Naftali Bennett and Yair Lapid. The first four recommendations: connect all Palestinian cantons in Areas A and B with new Palestinian-only roads, concealing occupation infrastructure; transfer parts of Area C to Area A for Palestinian housing — in 2021, for the first time in 20 years, more than 1,000 Palestinian housing units in Area C were approved only days after 2,200 Israeli settlement units, also in Area C; grant Palestinian access to Israeli airports — in 2022 West Bank Palestinians were permitted to use Ramon airport in the southern Naqab, on Israeli transportation infrastructure with increased surveillance; and support Palestinian diplomatic efforts for international recognition as a state without recognizing a Palestinian state’s borders, a component of Goodman’s original Hebrew proposal omitted from the English translation. Footnote 2 (line 209) states it is highly unlikely housing-expansion proposals will continue under the new regime.
• The Economic Components of “Shrinking the Conflict” (lines 175-177): the economy has long been employed to control and pacify Palestinians, as laid out in the 1994 Paris Economic Protocol (PEP), an agreement between Israel and the Palestinian Authority giving the illusion of Palestinian economic autonomy while rendering Palestinians dependent; Israeli leadership has evolved Netanyahu’s “economic peace” model within the PEP framework, and any new mobility and collaboration policies entrench fragmentation and dependence in perpetual de-development.
• Goodman’s Take on Economic Relations (lines 179-181): a review of the PEP through joint economic collaboration; Lapid and Palestinian Prime Minister Mohammad Shtayyeh attended a September 2022 meeting sponsored by the Norwegian Ministry of Foreign Affairs to promote Palestinian state-building, after which the Ad Hoc Liaison Committee proposed restructuring financial relations and reviving the Joint Economic Committee, frozen after the Second Intifada — neither proposal has advanced, and both will likely be abandoned under Netanyahu’s sixth government. Additional economic facilities, based on Institute for National Security Studies policy shifts, would gradually devote Area C lands to Palestinian-Israeli economic cooperation, foreign investment and industrial parks under Israeli control, joining the Bethlehem Multidisciplinary Industrial Park (BMIP) and the Jericho Agro Industrial Park Company (JAIP Co.), neither of which has succeeded in supporting Palestinian economic growth.
• The Creation of “Safe” Logistic Routes (lines 183-185): since 2018 the Israeli Civil Administration, USAID, and the Quartet, with several Palestinian large-scale producers, have worked on the “Door-to-Door” arrangement, enabling Israeli trucks to enter Area A and load goods directly from Palestinian factories, under security requirements (cement barriers, wire fences and an alarm connected to an Israeli military office; Palestinian employees trained by the Israeli military, loading cargo and reporting daily to Israeli military supervisors; GPS tracking on every freight truck). As of September 2022, 21 Palestinian companies in al-Khalil (Hebron), Ramallah, and Nablus had entered; footnote 3 (line 211) notes some Palestinian capitalists elected to enter. Total shipments were 61,880 between March 2018 and September 2022, reducing logistical costs by approximately $8.6 million; entrants must exceed NIS 10 million in annual trade volume with Israel, the arrangement separates large-scale producers from other exporters, worsens the wage gap, and expands Israeli encroachment and surveillance, including intensified permit-regime background checks that pacify Palestinians who need to preserve their permits.
• Deepening Economic Dependence through Labor (lines 187-201): a late-2016 Israeli resolution called for “innovations” in the volume of permitted Palestinian workers in 1948 territories and in permit procedures; the number rose from about 110,000 in 2016 to 204,000 in 2022, aligning with Goodman’s fifth step (a cap of 400,000). Figure 1 gives the number of Palestinian workers migrating to Israeli workplaces between 1967-2022, sourced to the Palestinian Central Bureau of Statistics (line 193); footnote 4 (line 213) explains that the PCBS website offers data only since 1994, and that for 1967-1993 the author consulted PCBS annual reports and Leila Farsakh’s book Palestinian Labour Migration to Israel: Labour, Land and Occupation (Oxford: Routledge, 2005), as printed. In March 2022 Decision 1328 allowed Gaza workers to enter 1948 territories for the first time since 2006, capped at 20,000 by the end of 2022; Lapid, then foreign minister, stated in September 2021 that the approach towards Gaza had shifted from “calmness for calmness” to “economy for calmness”, and Gaza itself is altogether excluded from Goodman’s proposal. Palestinian workers’ combined income in 1948 territories was estimated at $5.5 billion in 2021 (about 35% of Palestinian GDP), which Habbas distinguishes from economic development; the labor force has also been diversified into high technology, medicine, and engineering, with about NIS 300 million invested to train Palestinian workers in new professional skills (lines 195-201).
• Why “Shrinking the Conflict” will Fail (lines 203-205): as in the Summary and Executive Summary — the framework does not, on Goodman’s own argument as Habbas presents it, necessitate a formal agreement, the withdrawal of Israeli settlers or settlements from the West Bank, or the division of Jerusalem; the pragmatic right’s version was invalidated by Netanyahu’s far right-wing coalition’s December 2022 victory, but the economic measures since 2021 will likely continue to shape relations, and “the reality of Israeli settler colonialism, apartheid, and occupation will persist — as will Palestinian resistance to it”.
• Footnotes and author biography (lines 207-217): the four footnotes as listed in the sections above; the biography presents Habbas as a researcher at the Palestinian Forum for Israeli Studies (MADAR), working on West Bank-Israeli economic relationships, class-sectoral actors and colonial structures (border and permit regimes), researching smuggling, labor migration, labor brokerage networks, logistic routes, and colonial economic interventions, holding a PhD in Sociology and Political Economy from the Hebrew University of Jerusalem (line 217).

Key passages

• “This policy brief debunks Israel’s “shrinking the conflict” approach and the economic policies it entails.” (line 145)
• “the conflict below the threshold of war, while improving the fabric of life for the Palestinian population” (Goodman’s formulation, as quoted by Habbas, line 165)
• “The “shrinking the conflict” approach falsely assumes that Palestinian resistance is apolitical and unrelated to the struggle for liberation from Israeli apartheid and occupation” (line 169)
• “It is a distorted and racist assumption based on the long-standing Zionist misconception that Palestinians are an apolitical, violent mob — rather than a people demanding self-determination — that can be pacified if afforded so-called privileges.” (lines 153, 205)
• “increase the Palestinians’ sense of freedom and independence” (Goodman, as quoted by Habbas, line 173)
• “calmness for calmness” (line 195)
• “economy for calmness” (Lapid’s formulation, as quoted by Habbas, line 195)

Evidence the work relies on

• Micah Goodman’s 2018 concept and his eight recommendations, as Habbas presents them (lines 141, 165-181, 189), including Goodman’s original proposal in Hebrew, whose statehood-without-borders component Habbas says was omitted from the English translation (line 173). No work title, edition or page for Goodman is named in the brief.
• The 1994 Paris Economic Protocol, as Habbas characterizes it (lines 147, 177-181). The protocol’s text is not reproduced.
• The September 2022 Lapid-Shtayyeh meeting sponsored by the Norwegian Ministry of Foreign Affairs and the Ad Hoc Liaison Committee’s subsequent proposals, as Habbas presents them (line 181). No meeting record is cited.
• Policy shifts recommended by the Institute for National Security Studies, as Habbas presents Goodman’s use of them (line 181). No INSS publication is named.
• The Door-to-Door arrangement’s security requirements, participation and shipment figures — 21 companies as of September 2022; 61,880 shipments and approximately $8.6 million in reduced logistical costs between March 2018 and September 2022; the NIS 10 million annual trade threshold (line 185). No source for these figures is named in the brief.
• Palestinian labor figures: about 110,000 workers in 1948 territories in 2016 rising to 204,000 in 2022, Goodman’s proposed cap of 400,000, the Gaza cap of 20,000 under Decision 1328, the 2021 combined income estimate of $5.5 billion (about 35% of Palestinian GDP), and about NIS 300 million invested in training (lines 189-201). Figure 1’s series (1967-2022) is sourced to the Palestinian Central Bureau of Statistics, with footnote 4’s method for 1967-1993 (PCBS annual reports and Farsakh’s 2005 book) (lines 193, 213).
• The 2021 Area C housing and settlement approvals — more than 1,000 Palestinian units and 2,200 Israeli settlement units (line 173) — and the 2022 Ramon airport permission (line 173), as Habbas presents them, without named sources.

Analysis

• Method: a policy brief that first reconstructs Goodman’s concept from his own stated aims — bridging the Israeli Left-Right rift, managing the conflict below the threshold of war, acknowledging a desire for full civic rights without sovereign borders — and then tests its two operative parts, the four freedom recommendations and the economic components, against the measures actually put in place since 2021 (the Area C approvals, Ramon airport, the September 2022 meeting, Door-to-Door, and the labor resolutions and Decision 1328). The economic sections carry the brief’s only figures, and its argument turns on distinguishing income and growth from development under occupation.
• Perspective and limits: the brief is written from an explicitly anti-colonial position — its terms are “the Israeli regime”, “settler-colonial occupation” and “settler-colonial apartheid” — and it does not present an opposing account of Goodman’s proposal beyond Goodman’s own formulations as quoted. Its central figures (Door-to-Door shipments and savings, labor counts, the $5.5 billion income estimate) are stated without named sources in the brief itself, apart from Figure 1’s PCBS attribution and footnote 4; Figure 1’s plotted values are not present in the text copy. Goodman’s eight recommendations are enumerated only in part: the first four and the fifth (labor) are identified, and the remaining steps are not separately listed.
• Support: the claim that the measures entrench rather than relax control is supported within the brief by the mechanisms it specifies for each measure — Palestinian-only roads concealing occupation infrastructure, Area C transfers paired with settlement approvals, airport access requiring Israeli infrastructure and surveillance, and Door-to-Door’s barriers, military-trained loaders, daily reporting and GPS tracking (lines 173, 185). The closing prediction, that Palestinians will never accept the status quo and that resistance will persist while settler colonialism, apartheid and occupation persist, is Habbas’s stated conclusion, presented as such, and his judgment that Netanyahu’s December 2022 coalition invalidated the approach’s friction-reducing premise is likewise presented as his assessment of a government whose economic policies had, at publication, yet to be laid out (lines 155, 205).

People, organizations, places and events

Walid Habbas, Micah Goodman, Benjamin Netanyahu, Naftali Bennett, Yair Lapid, Mohammad Shtayyeh, Leila Farsakh, Al-Shabaka, Initiative for Shrinking the Conflict, Institute for National Security Studies, Israeli Civil Administration, Palestinian Authority, Palestinian Central Bureau of Statistics, Paris Protocol, Second Intifada, West Bank, East Jerusalem, Gaza, Naqab

Concepts

Shrinking the conflict, Economic peace, Door-to-Door policy, De-development, Apartheid, Settler Colonialism, Two-state solution, Self-determination

How it relates to other sources

• With The Political Economy of Israeli Occupation: What is Colonial about It?: agreement in structure, and a direct citation link. Farsakh argues Oslo redefined rather than demolished the occupation’s economics, institutionalising dependence under the Paris Protocol; Habbas reads “shrinking the conflict” as the same framework’s next iteration — Netanyahu’s “economic peace” evolved within the PEP — and cites her Palestinian Labour Migration to Israel: Labour, Land and Occupation (2005) in footnote 4 as a source for the 1967-1993 labor series behind Figure 1 (lines 177, 213). Where Farsakh’s subject is the post-Oslo order as a whole, Habbas’s is the 2018-2023 policy layer built on it, above all labor migration and logistic routes.
• With Exploitation of Palestinian Labour in Contemporary Zionist Colonialism: agreement on labor dependence. Habbas’s labor section — permits, background checks that pacify workers who need their livelihoods, and income distinguished from development — extends the exploitation-of-labour account to the 2016-2022 expansion (about 110,000 to 204,000 workers) and to its diversification into high technology, medicine and engineering (lines 185-201).
• With Thirty Years On: The Ruse of the Middle East Peace Process: agreement that frameworks presented as progress consolidate permanent occupation. Razek’s ruse is the peace process itself; Habbas’s object is a post-two-state framework that has, in his account, altogether abandoned any serious discussion of the two-state solution while retaining the process’s economic architecture (lines 143, 169).
• With The Enduring and Racist Trope of Palestinian Rejectionism: a shared phrase with a different referent. Nimer writes that after October 7, 2023 the international community cannot “shrink the conflict” indefinitely — using the phrase generically, for deferring a reckoning — where Habbas, writing before October 2023, gives the term its specific source in Goodman’s 2018 approach and its Israeli policy uptake (lines 141-143). The two uses are held side by side, not merged.
• What is new: the wiki’s first source devoted to “shrinking the conflict” itself — Goodman’s concept and eight recommendations, the 2019 Initiative, the Door-to-Door arrangement’s terms and 2018-2022 figures, Decision 1328 and the Gaza labor cap, and the “economy for calmness” formulation.

Open questions

• The text copy displays Mar 6, 2023 (lines 135, 221), while the original HTML’s structured data gives datePublished as 2023-03-05T16:02:17+00:00 and dateModified as 2024-07-07T10:05:34+00:00. The displayed date is used for the page’s date and file name; the two forms are held side by side, not reconciled.
• Line 173 spells the former prime minister’s given name “Neftali Bennett”; the same passage and line 205 also refer to him by surname only. The spelling stands as printed in the brief and is not corrected here.
• Figure 1 (line 193) is present in the text copy only as its caption and PCBS source line; its plotted values for 1967-2022 cannot be read from the text copy, and the brief’s text gives labor counts only for 2016 and 2022 and the Gaza cap for 2022.
• Goodman’s eight recommendations are only partly enumerated: the first four (roads, Area C transfer, airports, statehood recognition without borders) and the fifth (increasing Palestinian workers, cap 400,000) are identified at lines 173 and 189; the remaining steps are not separately listed in the brief.
• The brief’s Door-to-Door figures (21 companies; 61,880 shipments; approximately $8.6millionsaved;theNIS10millionthreshold),itslaborfigures(204,000in2022;$5.5 billion in 2021, about 35% of GDP; about NIS 300 million in training investment) and its Area C approval figures (more than 1,000 Palestinian units; 2,200 settlement units) are given without named sources in the brief and cannot be checked from this source.
• Habbas says an important component of Goodman’s original proposal in Hebrew — that without recognized borders, incursions will not be considered violations of sovereign territory — was omitted from the English translation (line 173); neither Goodman text is ingested, so the omission cannot be checked here.

Coverage

lines 1-368 of 368, read in full