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Israeli soldiers take up positions near the Gaza Strip border, in southern Israel, on Jan. 7.Ohad Zwigenberg/The Associated Press

R. David Harden is the former assistant administrator at USAID’s bureau for democracy, conflict and humanitarian assistance; former USAID mission director to the West Bank and Gaza; and former senior adviser to president Barack Obama’s special envoy for Middle East peace.

I believed.

If we worked harder, negotiated more effectively, solved core problems with more creativity, then the Israelis and Palestinians could have peace – finally. I was optimistic when president Barack Obama appointed senator George Mitchell as the special envoy for Middle East peace. If Mr. Mitchell could help bring peace to Northern Ireland, then surely an end to the conflict was also possible in the Middle East. Being a part of his team in the Obama administration was a historic opportunity.

I was naive.

The 1993 Oslo Accords, which envisioned two states for two people, have been moribund for years. Oct. 7 marked the end of Oslo. The Hamas attack on the village of Be’eri, as well as 21 other sites in Southern Israel, and the use of rape as a weapon of war, was psychotic in its barbarity. Hamas attacks on towns and cities aimed at terrorizing Israeli civilians continue, with a barrage of rocket attacks at the dawn of this new year. Legitimately targeting Hamas at first, Israel’s assault on Gaza is now indiscriminate, disproportionate and brutal for the civilian population. Israeli Prime Minister Benjamin Netanyahu and his war cabinet, not Hamas, bear the responsibility for a catastrophic hunger crisis and the displacement of nearly 1.8 million Gazans. Palestinians and Israelis face an exhausting doom loop with generational grievances, anger and despair.

Yet, without irony, the United States continues to fund both sides of this conflict. American taxpayers subsidize Israeli bombs, bullets and the Iron Dome missile-defence system. The U.S., as it has since Oslo, also substantially funds Palestinian food, hospitals and other humanitarian assistance.

That is not all. The Biden administration has deepened its reach throughout much of the Middle East. Mr. Biden immediately deployed two aircraft carrier groups to deter Hezbollah, while Iranian proxies in Syria and Iraq have attacked U.S. troops more than 140 times. In the Red Sea, the U.S. Navy is defending 12 per cent of all global trade from repeated attacks by Yemen’s Houthis. The political and economic costs to the U.S. are steep, particularly when there is no pathway to peace between the Israelis and Palestinians. Through treasure and blood, the U.S. subsidizes continued political dysfunction.

U.S. Secretary of State Antony Blinken has been shuttling throughout the region, yet again, in hopes of blunting the risk that the Israeli war against Hamas spills over into the region. Hezbollah and Israel are on edge. The Houthis launched another attack on the Red Sea this week, disrupting 20 per cent of global shipping. Mr. Netanyahu and Palestinian president Mahmoud Abbas have not spoken in years.

Mr. Biden can potentially break the sclerosis of the Oslo parameters by disrupting the status quo for Israelis and Palestinians alike. Here is the outline for a set of proposals designed to advance each side’s existential values while extraditing senior American diplomats from serving as junior officers negotiating mundane details about the future of the region.

For the Israelis, the Biden administration should offer three major policy changes. First, the U.S. should dismantle the United Nations Relief and Works Agency, essentially the United Nations’ shadow government in Gaza. The Israelis believe that UNRWA has been co-opted by Hamas and perpetrates Gazan grievances that prolong the conflict. UNRWA has lost its legitimacy and purpose – it’s time to retire the agency.

Second, the Biden administration should provide ironclad security guarantees to Israel in the event of a war with Iran. A nuclear Iran is a direct threat to Israel, Saudi Arabia, Europe and North America. Deterring Iranian expansionist ambitions with clear alliances will provide assurance and predictability to the Israelis.

Finally, the U.S. should double down on Israeli-Saudi normalization as foundational to regional stability. Hamas simply cannot be rewarded for thwarting reconciliation between Riyadh and Jerusalem. Hamas loses if reconciliation goes forward.

Together these three policies would demonstrate an unmatched American commitment to Israel’s strategic presence in the Middle East. Be assured there will be a cost for the Israelis; the Biden administration must be equally as bold for the Palestinians.

Mr. Biden should concurrently offer three major proposals to the Palestinians. First, Mr. Biden should recognize the State of Palestine, with its capital on the outskirts of Jerusalem in Abu Dis or Beit Hanina. President Harry S. Truman recognized the State of Israel without defined borders in 1948, and it’s not a bar to recognizing Palestine today. The starting point for future borders must be the 1967 Green Line, with swaps to reflect current realities.

Second, the Biden administration should publicly call on Israel to release Marwan Barghouti from prison. Make no mistake, Mr. Barghouti has blood on his hands. Israeli courts convicted him on five counts of murder. But the widely popular and iconic Mr. Barghouti now advocates for peaceful co-existence with – not the annihilation of – Israel. Alon Liel, formerly Israel’s most senior diplomat, believes that Mr. Barghouti “is the only one who can extricate us from the quagmire we are in.” A Biden call to free “Palestine’s Nelson Mandela” would demonstrate foundational support to make the Palestinian state an authentic reality.

Finally, Mr. Biden should advocate for a NATO-inspired international trusteeship to govern Gaza over a three-year transition period. The “Gaza Trusteeship” will provide the mechanism, oversight and accountability for reconstruction after the war. This trusteeship, which could be headed by former Palestinian prime minister Salam Fayyad and be coupled with U.S. security guarantees, will serve as the launch for Palestinian Authority control over Gaza.

Rejectionists will do what they do best. There is enough in these proposals to cause faux outrage by the extremists on each side. Hamas and Mr. Netanyahu’s right-wing ministers are working hard to guarantee there is no “day after” in the current Gaza war. If their vision holds, Israel will occupy Gaza indefinitely, Hamas will never be defeated, and the West Bank will be endlessly contested by expansionist right-wing settlers and an anemic Palestinian Authority. American taxpayers, meanwhile, will continue to subsidize dysfunction.

This all-or-nothing proposal would be Mr. Biden’s shock therapy, intended to go beyond the Oslo Accords by offering Israelis and Palestinians what they most need. The Israelis would gain security and permanency in the Middle East by cultivating allies and deterring adversaries. The Palestinians would gain statehood, legitimacy and national identity in the community of nations. And the Americans can try again to de-risk their role in the Middle East quagmire.

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