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Country Reports

Palestinian Territory Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

There is a high risk of the Palestinian Authority (PA) suspending all co-operation with Israel, including on security matters, following US President Donald Trump's announcement on 28 January of his Israeli-Palestinian peace proposal. The proposal is highly favourable to Israeli demands, including an Israeli annexation of some 30% of West Bank territories. An annexation, and the suspension of security co-operation that would follow, would likely trigger a renewed wave of low-capability attacks in Jerusalem and across the West Bank.The United States is likely to seek the replacement of PA President Mahmoud Abbas with a more pliable figure who would at least be willing to take the proposal as a basis for further negotiations. One lever to achieve this would be Gulf Arab states cutting off aid to the PA, likely prompting Abbas to resign in protest. This would risk infighting between Fatah factions and an outright dissolution of the PA, with Abbas having no declared successor.The risk of a renewed escalation between Hamas, which controls the Gaza Strip, and Israel remains high in 2020, in response to intermittent Hamas rocket fire and incendiary kites being launched at targets in southern Israel, prompting retaliatory airstrikes by Israel. Israeli airstrikes, artillery strikes, and limited ground incursions are probable in response to rockets fired from Gaza, with a wider escalation likely in the event of an Israeli move to annex West Bank territories.Economic growth is forecasted by IHS Markit to remain low at 1.7% in 2020, albeit better than 1.2% in 2019, reflecting weak economic activity in Gaza. There are few signs of significant structural improvement in the business climate that could boost capital investment or reduce high levels of unemployment, let alone absorb the expanding labour force. An aggregate unemployment rate of close to 30% remains crippling, with unsurprisingly higher rates in Gaza than in the West Bank.
Last update: February 13, 2020

Operational Outlook

Business activity is severely hindered by Israeli border closures, weak infrastructure, corruption, and complex bureaucracy. The collapse of the unity government in 2007 and the subsequent takeover by Hamas in the Gaza Strip further compounded this situation.

Last update: March 17, 2020

Terrorism

Hamas is likely to continue to launch arson attacks against southern Israel, but is unlikely to escalate this to regular rocket or mortar bomb fire while Egypt and Qatar continue to back mediation with Israel. 'Price-tag' and other attacks by Jewish settlers are likely to continue in the West Bank, alongside a risk of isolated knife attacks, shootings, and car-rammings at Israel Defense Forces (IDF) checkpoints and at other locations. Unco-ordinated, low-capability attacks by Palestinians would likely intensify in the event of Israel proceeding with unilateral annexation plans in the West Bank, leading to a collapse of its security co-operation with the Palestinian Authority.

Last update: March 20, 2020

Crime

Almost all forms of criminality are at problematic levels in the Palestinian Territories. The police force and judiciary lack the capability to address criminality, with evidence of complicity among the rank and file of the security forces. Despite these structural weaknesses, violent crime is generally rare.

Last update: December 13, 2019

War Risks

Israeli airstrikes, artillery strikes, and limited ground incursions are probable in response to rockets fired from Gaza, but the risks of escalation into wider inter-state war are mitigated by Hamas's continued limited security co-operation with Egypt. War risks are mitigated in the West Bank, where the PA security forces will probably continue co-operation with the Israeli military. One exception would be a third 'intifada' scenario, which would likely lead to the security forces ceasing co-operation.

Last update: March 17, 2020

Social Stability

Violent protests in Gaza and the West Bank are very likely in response to Israeli military operations, arrest campaigns, or settler attacks targeting Palestinians. These are highly unlikely to successfully challenge the control of either Hamas or the Palestinian Authority. Key triggers are likely to also include Jewish access to the Al-Aqsa Mosque compound, Israeli steps for West Bank annexation, and a prolonged economic crisis in Gaza. Recent examples include protests against a social security law since October 2018 in the West Bank and the economic protests in February 2019 in Gaza.

Last update: March 20, 2020