Inside Story

Two-state illusions

The two-state solution will be mentioned many times at the UN next week, but it has become no more than a slogan

Tony Walker 19 September 2025 1222 words

High-water mark: US president Clinton with Israeli prime minister Yitzhak Rabin (left) and Palestinian Liberation Organization chairman Yasser Arafat in Washington on 13 September 1993. Ron Edmonds/AP Photo


Hussein Agha and Robert Malley have offered a needed reality-check on the eve of next week’s UN session on the Gaza war, which will be defined by the phrase, “two-state solution.” In their newly published book Tomorrow is Yesterday: Life, Death and the Pursuit of Peace in Israel/Palestine the two former negotiators question the flawed principles underlying the current direction of the search for peace in the Middle East.

They do so from positions of authority. Both authors, one on the American side and the other on the Palestinian, have been embroiled in peace efforts for more than a generation. Each in his own way has concluded that talk of a two-state solution in present circumstances is unhelpful since it conveys an impression that constructive efforts towards peace are being made when, at best, the issue is being fudged.

In an interview with National Public Radio, Malley says that “at bottom, the US spoke one language but did not really put its effort where it said it wanted to go” when it sought to promote Middle East peace. Agha, in the same interview, was more direct, describing the pursuit of Middle East peace as a “fake process” doomed by “a combination of illusions, delusions, lies, noise, missteps [and] misreadings.”

Given their respective roles — Malley as an adviser in Bill Clinton’s Camp David process, Agha on the Palestinian side — their individual and joint disappointment is understandable. They have reluctantly concluded that until and unless an American administration commits itself to a peaceful outcome there is little or no chance of a breakthrough. Indeed, things may get worse, if that is possible.

In other words, a two-state solution will remain an illusion fostered by Western leaders as a bromide for the hard decisions required to force a settlement.

Looking back to the Oslo process in 1993, which momentarily raised hopes of a breakthrough in Israeli–Palestine relations, the utterly depressing reality is that peace is now more distant than ever. The handshake on the lawn of Clinton’s White House between Israel’s prime minister Yitzhak Rabin and Palestinian leader Yasser Arafat was a high point in Middle East peacemaking.

That was September 1993, thirty-two years ago.

Under Oslo, the two sides were to work towards the creation of a Palestinian state, but Rabin’s assassination in 1995 by an Israeli zealot opposed to peace effectively put an end to a chapter in which a two-state solution might, just conceivably, have become a reality.

It is impossible to exaggerate the role of Rabin’s death in the rise of the Israeli nationalist settler right, and on the Palestinian side in the emergence of Hamas and its affiliates as a destructive element in a blood-drenched equation.

In hindsight, Rabin’s death should have put an end to illusions about Middle East peace based on the Oslo formula. But the illusion persisted, fostered by Clinton himself, who believed that by force of his own personality he could bring the parties together at Camp David in 2000, and again at Taba, Egypt, in 2001. Those efforts foundered for lack of will on both sides, along with poor preparation by Clinton’s Middle East team and divisions within the Palestinians leadership.

A quarter of a century after the last of those efforts, the world remains stuck in a two-state paradigm, even if circumstances could hardly be less propitious, with Israel proceeding with its war of annihilation in Gaza and its undermining of the Palestinian Authority in the West Bank, and an American administration more aligned with Israel’s expansionist aims than its predecessors.

This invites the question: what is the point of the coming week’s UN debate, in which multiple countries, including Australia, will recognise Palestinian statehood and proclaim their commitment to a two-state solution? Such gestures will sound noble, even principled, but what will change in practice?

The short answer is not much, if anything. Countries like Australia will content themselves with having entered a protest against what is happening in the Gaza Strip and in the West Bank, where Jewish settlers are running riot.

In response to UN pressures, Israel and its Washington ally may well use international opprobrium to push even harder for a process that forestalls any hope for the Palestinians, even as Israel continues to pursue its annexationist policies in territories occupied in war. While this plays itself out it will become even clearer that references to a two-state solution are, if not illusory, then a pretext for avoiding difficult decisions that could exert real pressure on the protagonists.

Mention of a two-state solution obviates a need to talk about economic sanctions or restrictions on transfers of the military equipment that enables Israel to continue its destruction of Gaza, street-by-street, building-by-building, enclave-by-enclave. Leaders of countries like Australia will return home having lent their names to resolutions that will do little or nothing to alter the status quo.

If it does anything, the week will draw attention to various failed Middle East peace initiatives that litter the historical landscape like rusting ordnance in the desert — going right back to the British government’s Peel Commission in 1937, which first formulated a “two-state solution.”

The Peel Commission actually recommended two-and-a-bit states, one Jewish, one Palestinian, the “bit” being an enclave under international supervision that would incorporate the holy places of Jerusalem and Bethlehem. Its plan was laid to rest by Britain in 1938 after a furious reaction from the Arab residents of Palestine under the British mandate.

Key moments since then include the 1947 UN partition plan, with its fateful consequences for world peace; UN Security Council Resolutions 242 in 1967 and 338 in 1973, which effectively defined two states by calling on Israeli to withdraw to its pre-1967 war boundaries; the Palestine Liberation Organization’s tacit acceptance of Israel’s existence via its acknowledgement in 1988 of various UN resolutions; the Oslo process of 1993, which involved explicit PLO recognition of Israel’s right to exist; and, as mentioned, Clinton’s stumbling 2000 Camp David peace efforts.

In Tomorrow is Yesterday, Malley and Agha offer little hope that anything approaching peace might be in prospect. They canvass various possibilities, including a binational state in which Jews and Palestinians reside as equals within the same territory. This is about as likely to happen as Israeli prime minister Benjamin Netanyahu and the UN’s outspoken rapporteur on Palestine, Francesca Albanese, becoming reconciled.

Another suggestion they canvass is for a Palestinian territory to join — or re-join — Jordan in a federation. This would involve a highly unlikely return to the future, since Jordan relinquished its claims to Palestine in 1988.

The bleak conclusion is that until and unless a US administration force feeds a peace process not much constructive will happen. Of course, this will not prevent leaders of Western democracies like Australia proclaiming their adherence to a two-state solution as the holy grail of the Middle East peacemaking in the absence of a better idea, or worse, as a substitute for tackling the issues involved. This would include accepting a UN report that Israel is breaching the terms of the Genocide Convention in Gaza.

You can be sure this is terrain, stretching all the way back to the Oslo Accords of 1993, that Anthony Albanese and foreign minister Penny Wong will be reluctant to traverse. As Robert Malley puts it “something has gone terribly wrong in the [past] thirty-two years.” •