Fragile calm masks a deepening crisis in the West Bank - analysis

Compared to the heavy fighting in Gaza, the strategic battles and achievements in Lebanon, the continued campaign against Iran, and the ongoing friction with the Houthis, the West Bank appears – at least superficially – unchanged. But beneath this surface calm lies a reality that is rapidly shifting, volatile, and potentially explosive.

Once numbering nearly 200,000 per day, now only tens of thousands of these workers receive permits, and most are employed inside Israeli settlements in the West Bank rather than being allowed to work in Israel proper.

This restriction, along with Israel’s six-month freeze on the transfer of the tax revenues it collects on behalf of the Palestinian Authority – funds that make up around 65% of the PA’s operating budget – has driven unemployment in the West Bank from 15% to nearly 40%.

The economic fallout is being deeply felt in cities and refugee camps alike, compounding existing tensions and shaking the foundations of Palestinian society.

Prime Minister Benjamin Netanyahu has echoed this view, stating recently that the only difference between the PA and Hamas is their capabilities.

Meanwhile, violence between Israeli settlers and Palestinians has escalated sharply, with cases of some more extreme settlers killing Palestinian civilians during raw clashes.

Smotrich, in his dual role within the Defense Ministry, holds significant sway over the Civil Administration that governs Jewish settlement policy in the West Bank. He has laid out a clear vision: the annexation of 82% of the West Bank, the expansion of settlements to render Palestinian contiguity impossible, and the eventual establishment of a single Jewish state extending from the Jordan River to the Mediterranean Sea, which he says will “continue to be democratic” but will institute two different types of citizenship.

All these tensions have reached a peak in recent weeks amid the political tsunami sparked by a wave of international recognition of a Palestinian state. Israel’s first response was to threaten annexation of the West Bank, though this appears to have been stymied, for the time being, due to American opposition.

The pushback reportedly came directly from US President Donald Trump, who fears that such moves would undermine the Abraham Accords, a strategic achievement during his first term. The United Arab Emirates, the country that led the way in the normalization agreements, has made it clear that annexation moves, even symbolic or partial, would jeopardize the accords.

At the same time, external actors have been actively working to inflame the West Bank. Hamas, operating mainly through its leadership in Turkey, is constantly working to promote terrorism and incite the Palestinian public to violence, while Iran, and even Hezbollah, continue to provide arms and funding to militant cells – particularly in areas like Jenin and Tulkarm, where the PA’s control is increasingly tenuous.

And yet, despite all this, the West Bank has not fully erupted. This fragile quiet is due to a combination of three factors: the Palestinian public, which faces a difficult economic situation, remains reluctant to follow Gaza into ruin; Israel’s effective counter-terrorism operations, which have largely succeeded in cutting off terrorism; and the PA, which, despite being weakened, maligned, and underfunded, continues its security coordination with Israel.

However, none of these factors can be relied upon to provide a stable formula for long.

If the economic pressure continues unabated, it could plunge more Palestinians into the cycle of violence and weaken the PA. Continued settler violence and inflammatory rhetoric from within the Israeli government could spark wider confrontations and increase international condemnation.

And with President Mahmoud Abbas now 90 years old, the question of “the day after” arises and could develop into violent struggles within his own Fatah party or a broader “Palestinian Spring” led by a frustrated younger generation.

Meanwhile, a quiet ideological revolution is reshaping the strategic landscape. The concept of a two-state solution is slowly disappearing – not merely due to Palestinian political dysfunction or Israeli security concerns but because a significant segment of Israel’s Religious Zionist leadership is deliberately leading the two peoples toward a one-state reality.

The expansion of the Jewish population beyond the Green Line, the integration of West Bank infrastructure into Israeli systems, and the deep economic interdependence between Israelis and Palestinians all point toward de facto annexation, even in the absence of any formal declarations.

Palestinians themselves are not immune to this shift. Many, especially the younger generation, no longer see a viable path to statehood and are increasingly expressing interest in the idea of one state, as long as it is based on full civil equality.

But such a reality would pose a fundamental change to Israel’s Jewish and democratic character. The demographic consequences alone would upend long-standing national assumptions and force the country into an identity crisis.

Such a crisis demands the immediate attention of the Israeli public and requires serious discussion around the question of the future relationship between the two peoples, before they find themselves locked in a bloody Balkan reality.

Israel’s public deserves clarity. It must be the main focus of the country’s next general election, where leaders need to clarify their position and present their vision: one state or two? Democratic or ethnonational? Coexistence or coercion? The future of the West Bank is no longer a distant problem – it is the central issue shaping Israel’s trajectory as a state.■