Although the Palestinian-Israeli conflict has been dominated by ideology and politics, there are some significant "side issues" that could maintain and prolong the conflict if they are not fully solved. In the context of the Arab-Israeli conflict, water and refugees are the two major sources of potential regional instability that need to be addressed. There are several aspects to the Arab-Israeli conflict over water, the most important of which is the Israeli occupation itself, whether in South Lebanon, the Golan Heights or the West Bank. The dispute over water, a rare regional commodity, is, of course, also an issue bound up in the territorial component of the Palestinian-Israeli conflict. As for refugees, any final Palestinian-Israeli settlement that fails to completely solve the refugee problem will not provide a realistic and durable solution to the conflict. A new eruption of Palestinian-Israeli violence would be only a question of time, while the frustration of Palestinian aspirations for a just solution would also negatively influence the Arab agenda. This paper seeks to address those two issues and suggest ways forward.

Water and Regional Cooperation

It is no secret that water either is, or will be, scarce in practically all Middle Eastern countries. Competition for supplies is increasing among user sectors within each country, which in turn threatens to lead to competition among countries for control of access to rivers, aquifers and other water sources. A lack of adequate water supplies is known to retard the pace of social and economic development, adversely impact employment and affect the environment, hygiene standards and public health. If sustained over a period of time, these problems will directly affect social harmony, domestic stability and, eventually, regional peace. Only a minority of people in this region currently understands the importance of adequate water supplies in supporting the economy. One approach to solving this problem would be to give water the same level of importance as other sectors of the national economy. Developing efficient water usage strategies is a very basic need for the future development of all Middle Eastern countries1. Competition could be erased, moreover, through an integrative process based on a positive sum outcome from which all parties would benefit. To that end, efforts should be directed to transform confrontation into cooperation.
Since the beginning of the Israeli occupation, controlling access to water resources and the main aquifers was an important guiding principle as Israel mapped out its settlement policy and later strategized over its negotiations policy in official or unofficial talks. Maintaining access to water reserves has also been a factor in determining the map for "unilateral withdrawal" that some Israelis believe is a way out of the current conflict. Palestinians, on the other hand, believe they have the right to regain not only the territories occupied in 1967, but also the water resources in those areas in accordance with international law2.
There is nothing innovative in the idea of seeking new legal bases to manage and share water resources. In order that such laws can be successfully drafted and then implemented, two basic points should be considered: The present water situation and how international law relates to this. Socioeconomic development in the Middle East and the current policies of water management indicate the following:
1. Population growth is not expected to level off before the second decade of the 21st century.
2. Development in the area indicates that improving standards of living require more water to be allocated for municipal uses. Accordingly, more waste water and general waste will be produced, threatening to pollute existing water resources.
3. Aquifers will continue to be overexploited, which will lead, sooner or later, to their depletion and salination.
4. Industrial development, tourism and trade are expected to grow. This again requires large water resources, increasing demands on availability.
5. Increasing the efficiency of water use through new and existing technology is essential.
It is vital that viable long-term water-saving mechanisms, especially in irrigated agriculture, are introduced. These would include shifts from water-intensive, low-value crops to low-water consumptive, high-value crops. An ethic of inter-generation equity, which may require significant changes in the way we understand and manage our water resources, must prevail. One mechanism to balance future demands and water scarcity would be to implement a policy that considers water a commodity in agricultural and industrial uses, rather than a "free good."
It is essential that there be a shift in policy thinking that can lead to activities, actions and strategies that will guarantee a sustainable water supply for future generations. Examples of these changes include: Introducing effective water management systems, considering water as an economic commodity, maximizing irrigation efficiency, applying water-saving technologies and lifting water subsidies, with the exception of municipal uses to help the poor. Unless these advanced concepts of water allocation are introduced and applied in the near future in a planned and comprehensive way, the Middle East stands to face one of its most severe socioeconomic problems.
Any future water settlement must also deal with the present lack of clarity over water rights, the separation between resources and supply and separation between the various geographic areas, particularly between the West Bank and Gaza Strip, and the disproportionate water usage of settlements in the West Bank and Gaza. This must be dealt with even if the issue of settlements themselves is postponed. It would be an opportunity to emphasize the role that water can play in regional cooperation and in the promotion of peace. The Jordanians, Palestinians and Israelis should play a significant role in encouraging such an effort. There are peaceful means for coping with the anticipated water shortage through regional and international cooperation, from which all parties stand to gain. Wars, on the other hand, will do nothing but create more problems and propagate suffering, misery and hate. The question that all Middle Eastern nations must now ask is: "How are we prepared to resolve this nearing dispute - unilaterally, bilaterally or even regionally - without resorting to force?"

Refugees and Regional Security

Misery, fear and hardship are invaluable tools for extremists of all kinds. Many of the factors that cause large numbers of people to migrate also cause communities to seek other forms of change in their status or environment, often leading to conflict and even war3. Any final Palestinian-Israeli settlement that fails to completely solve the refugee problem will not provide a realistic and durable solution to the conflict. A new eruption of Palestinian-Israeli violence would only be a question of time, while the frustration of Palestinian aspirations for a just solution would also negatively influence the Arab agenda. Were Israel to leave this problem unresolved, it would encourage the Palestinians to continue nurturing their political goal of destroying Israel4.
Israel totally rejects the possibility of Palestinian refugees returning to their original homes and lands, as this would undermine the Jewish nature of Israeli society. Many Israeli towns and villages are built on former Arab-Palestinian lands. Further, the traditional position of all Israeli governments has been a refusal to admit any responsibility to financially compensate Palestinian refugees. Nevertheless, Israel has called for the creation of an international fund for the refugees, to which it would contribute. More than four million refugees are estimated to live beyond the borders of former Mandate Palestine. About 350,000 of them are in Lebanon, where they face acute problems and atrocious living conditions. Because of its domestic difficulties, Lebanon rejects any political solution that would leave the Palestinians within its borders or that would force it to absorb Palestinians as its citizens.
The 400,000 Palestinians in Syria make up approximately 2.4 percent of the total population. Most of them have regular employment and Syria's economy and society would have no trouble integrating them. The only obstacle to this happening is a political one. Prior to a bilateral Syrian-Israeli agreement, Syria is expected to show some flexibility in its demands. Jordan's difficulties are much greater. In numerical terms, around half of the total Palestinian refugee population is found there. Of that number, almost a million still live in refugee camps and face harsh socioeconomic conditions. State compensation, and the return of some refugees (particularly those without Jordanian citizenship), would be expected to be part of a final settlement.

Political Solutions

It is impossible to predict the development of the Palestinian-Israeli negotiations on a permanent settlement of the refugee problem. A political solution to the refugee issue is directly linked to the Palestinian peoples' right to self-determination. From the Palestinian perspective, the refugee problem is a direct result of the creation of the State of Israel. The implementation of a future political solution will almost certainly consist of a combination of the following elements: repatriation, compensation and resettlement.
During the intensive permanent status negotiations that took place from summer 2000 to January 2001, some progress was made between Palestinian and Israeli negotiators in identifying a common middle ground. On the Israeli side, there appeared to be recognition that Israel would have to accept some refugee return, admit some responsibility or regret for the refugee issue and accept primary responsibility for financing refugee compensation. On the Palestinian side, there was recognition that Israel would not permit practical implementation of the right of return to fundamentally change the demographic face of the Jewish state. As a consequence, voluntary refugee repatriation (to a Palestinian state) and resettlement (in either present host countries or, to a much lesser extent, in other countries) would also be important elements of an eventual agreement5.
However, these understandings were rendered moot - temporarily, perhaps - by Ariel Sharon's election as Israeli prime minister in February 2001. More generally, the upsurge in violence that began in the fall of 2000 hardened public opinion on both sides. Within Israel, protests by Palestinian-Israelis over their treatment as second-class citizens led many Israeli Jews to fear any future return of even token numbers of 1948 refugees, while the second Intifada severely weakened support for the Oslo peace process overall. Among Palestinians, popular support for the right of return remained strong and the violence and increasing harshness of the Israeli occupation disinclined many to consider compromise6.
Over time, however, the Arabs in general and the Palestinians in particular realized that a "return" to Israel was less and less realistic. This eventually led to a revision of the Palestinian strategy, and references to the concept of "return" began to incorporate some limitations. This is clearly reflected in the recently published Geneva Accord. Additionally, authoritative Palestinian speakers have explicitly avoided answering the question, "Where will the return be to?" Palestinian leaders were clearly speaking and writing about a return to a future Palestinian state though the Palestinian National Council never adopted this definition.
Despite the large gap in the official positions of the two parties, it is possible to discern some middle ground between Israeli and Palestinian analysts on the refugee issue. Many Palestinians - both intellectuals and officials - have spoken of a Palestinian right of return that would be understood to mean a return to national soil (in the West Bank and Gaza) rather than a return to 1948 homes. PLC member Ziad Abu Zayyad, for example, stated that: "One must distinguish between, on the one hand, the "right of return" as a principle and, on the other hand, exercising that right by literally returning to Palestine as a national homeland and to that same home, piece of land or grove which a certain Palestinian owned before 1948 as a private individual property7."
Rasheed Khalidi - emphasizing what he terms "attainable" (rather than "absolute") justice - suggests that while "it must be accepted that all Palestinian refugees and their descendants have a right to return to their homes in principle..." it must be "...equally accepted that in practice force majeure will prevent most of them from being able to exercise this right8".
The Middle East is perhaps one of the very few regions in the world where the question of immigration and refugees has developed into a political dilemma of the first magnitude. The future stability of the region and a recovery from its present state of fatigue and exhaustion cannot be achieved if no fair solution is found for the four million Palestinian refugees. To guarantee our regional security, the focus should be on resolving inter- and intra-regional conflicts and working to turn areas of confrontation into possibilities for regional cooperation. While the issues of water and refugees are extremely sensitive, they may also be the issues that provide a blueprint for regional cooperation that will ensure future regional stability.

1 The World Bank 1991, 1193/1/ Dublin Declaration 1992 ODA, 1993/USAID, 1993. Scientists from outside the region also confirmed this - Feshelson 1994, Hadad Farid 1995, Tamimi 1998.
2 Ghassan Khatib, Bitterlemons, August 05, 2002.
3 From an address by Prince Hassan bin Talal to the Society for International Development, Hague Declaration on Migration and Refugees, December 30, 2002.
4 Shlomo Gazit, The Palestinian Refugee Problem. Study No 2, JCSS, 1995, p5.
5 Eldar, Akiva. How to solve the Palestinian refugee problem. Haaretz May 29, 2001; and Sir, if you please, tear down your house. Haaretz May 31, 2001.
6 Palestinian Refugee Research Net, http://www.arts.macgill.ca/MEPP/PRRN/prissues.html
7 Abu Zayyad, Ziad, 1994. The Palestinian Right of Return: A Realistic Approach Palestine-Israel Journal. Spring 1994, p77.
8 Rasheed Khalidi, 1994. Toward a Solution, in Centre for Policy Analysis on Palestine, Palestinian Refugees: Their Problem and Future (Washington, DC:CPAP, 1994).