How to grasp the full impact of the settlement on the Palestinian quest for self-determination

Israeli settlements in the occupied Palestinian territories loom large in the Israeli-Palestinian conflict.


Israeli settlements in the occupied Palestinian territories loom large in the Israeli-Palestinian conflict. They are not only a major obstacle to securing a lasting peace but also a grave violation of international law. To grasp the full impact of the settlements on the Palestinian quest for self-determination, both the economic and the political impact should be addressed.


From the outset, settlements have had profoundly economic and spatial consequences. They were created by the confiscation of large swathes of the most fertile Palestinian land, the seizure of water resources and the exploitation of Palestinian quarries, mines, Dead Sea resources, and other non-renewable natural resources. As a result, Israeli settlements now control around 42% of West Bank land, a figure that includes built-up areas as well as the vast municipal boundaries of the Israeli settlements. These areas are off-limits to Palestinians unless they have permits.

Furthermore, the settlements are supported by a complex apparatus of roads, checkpoints, military zones and the ‘Separation Wall’, which has made Palestinian territorial contiguity almost impossible and created isolated Palestinian enclaves in the occupied territory. The West Bank is not only physically isolated from Gaza but it is also isolated from East Jerusalem, previously the engine of its economy and culture. Moreover, the settlements have also fragmented the West Bank economy into smaller, disconnected markets and weakened the competitiveness of Palestinian goods in local and export markets.

Israeli settlement construction harming Palestinian economy

It is worth citing a few examples of the profoundly harmful effect that Israeli settlement construction has had on the Palestinian economy. For instance, Israel’s control over water and land has decreased the labour productivity of the Palestinian agricultural sector and the sector’s contribution to Gross Domestic Product (GDP). Its restrictions on access to Dead Sea resources have prevented Palestinians from establishing a range of industries based on the extraction of minerals such as cosmetics. The extent of the loss to Palestinians of their inability to access their own land and resources can be gauged by the fact that Israel makes an estimated NIS 500 million annually (around $130 million) from its unlawful exploitation of the Jordan Valley and the Dead Sea.

In fact, the division and fragmentation of the Palestinian people began in 1948 – nearly 70 years ago – when hundreds of thousands of Palestinians fled or were forced to flee because of Israel

In addition, the system of closures and checkpoints that Israel uses to control the occupied territories increases the cost and risks for Palestinians of doing business, constrains economic development and increases unemployment and poverty. Palestinians have no right to freedom of movement and even Palestinian Authority President Mahmoud Abbas is dependent on Israeli permission to travel. Overall, it is estimated that the direct and indirect cost of the occupation in 2010 was almost $7 billion − around 85% of the total estimated Palestinian GDP. The Palestinian economy’s productive base can no longer generate enough employment and investment, increasing its dependency on the Israeli economy as well as on foreign aid (for more information about the impact of the Israeli settlements on the Palestinian economy, please see How Israeli Settlements Stifle Palestine’s Economy by Nur Arafeh, Samia al-Botmeh, and Leila Farsakh).

Political damage to Palestinians

This brief discussion of the economic impact of Israel’s unlawful settlement project hints at the political damage it has inflicted on the Palestinian people. The fragmentation of the Palestinian territory referred to above has created barriers between the Palestinians themselves. They can no longer freely travel to and from Jerusalem or between Gaza and the West Bank, a situation affecting family relations, friendships and business relations. In fact, the division and fragmentation of the Palestinian people began in 1948 – nearly 70 years ago – when hundreds of thousands of Palestinians fled or were forced to flee because of Israel and were never allowed to practise their right to return, living as refugees and exiles ever since.

Nevertheless, the Palestinians were able to nurture and sustain their national project to fulfill their right to self-determination.

Nevertheless, the Palestinians were able to nurture and sustain their national project to fulfill their right to self-determination. This is now at greater risk than at any previous time due to the physical fragmentation imposed by Israel’s settlement enterprise. The declaration by no less a figure than Israel’s Prime Minister Benjamin Netanyahu that Israeli settlements are there to “stay forever” is the biggest threat to the peaceful resolution of this conflict through a two-state solution. Even as it undermines the prospect of a sovereign Palestinian state, Israel seeks to “normalise” its occupation by, among other things, attacks on progressive organizations, including those within Israel, that criticise the occupation or work for human rights.

EU must hold Israel accountable under international law

This snapshot has attempted to set out the major economic and political obstacles created by Israel’s relentless settlement project and the real problems faced by advocates for peace. But the aspirations for a just peace live on. The European Union has a key role to play in holding Israel accountable under international law. The EU directive on labeling settlement products was a good first step. However, it has had a “non-existent” impact on Israel’s settlement policy. Perhaps more significant, even though the sums involved are small, is the decision by eight European countries to demand compensation from Israel for its destruction of structures they had helped build in the occupied Palestinian territories. This move reinforces the fact that the Geneva Conventions apply to the occupied territories, which Israel must vacate sooner rather than later.

The road to peace is clear: Dismantle the settlements, end the occupation, and fulfil rights under international law. It is a compelling vision that all must pursue.

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