In an editorial entitled "Accounting for the Benefits of Mideast Peace," The New York Times extols the virtues of a two state solution and points to a Rand Corporation report that details the benefits of a two-state solution to both sides of the conflict. The Times says of the report's conclusions:
"Among the assumptions underlying these conclusions are the return of 100,000 settlers from the West Bank to Israel, with relocation costs paid by the international community, and a tripling of Israeli trade with Arab countries in the Middle East."
"A tripling of trade with Arab countries in the Middle East?" Yeah, right. Trade with Iraq, Syria, Yemen and Libya? These countries no longer exist, and Lebanon is hanging in the balance. Trade with Egypt, Jordan and Saudi Arabia? Although Israel has peace treaties with Egypt and Jordan, and Saudi Arabia fears Iran far more than Israel, the level of anti-Semitism found in these and other Arab countries would stand in the way of meaningful trade.
All of Israel's Arab neighbors are in desperate need of Israeli desalination technology, but my guess is that any trade agreement involving the transfer of such know-how is not going to happen in my lifetime.
A two-state solution is a worthy goal, yet, as evidenced by the negative Palestinian response to Israeli Prime Minister Olmert's 2008 peace offer, providing the Palestinians with an independent state along the 1967 lines together with agreed upon land swaps and Palestinian control of east Jerusalem, Palestinians are still not prepared to accept Israel.
In short, a two-state solution and trade with Israel's Arab neighbors? Don't hold your breath.