A TWO-LEVEL ANALYSIS OF ISRAEL’S
STRATEGY TOWARD PEACE DURING THE 1990S
Mizrahi, Abraham Mehrez, Arye Naor
This paper suggests a
two-level game analysis of Israel’s strategy toward peace during the 1990s.
The paper shows how various paradoxes in Israeli society create domestic
obstacles and internal opposition that weaken Israel’s bargaining position
toward neighboring countries. Treating domestic parameters in these countries as
a given, we argue that Israeli leaders can hardly use this weakness to
manipulate information in the bargaining process, because neighboring countries
can observe Israel’s internal processes. Therefore, attempts by Israeli
leaders to create the impression that they are willing to adopt a conflictual
approach towards neighboring polities, especially the Palestinians, without
actually creating the necessary internal conditions for such a policy, may
finally lead to a sub-optimal equilibrium for Israel – in terms of territory
and deterrent ability – since it will have to compromise under difficult
conditions. Several practical implications as to the preferred bargaining
process under these conditions follow.
service as Secretary of State in the 1970s, Henry Kissinger once stated that
Israel did not have a foreign policy, it had only domestic policy. By that he
meant that Israel’s foreign policy is primarily the result of internal
conditions and constraints. Yet since this claim was made, students of
Israel’s foreign and strategic policy, especially within the discipline of
international relations, have not dealt with this issue systematically. Most
studies focus on the balance of power between Israel and the neighboring
countries as measured by armed forces, territory and security budget (Karsh and
Mahler, 1994). Kissinger’s observation seems more correct than ever in the
1990s, however, in light of events since the signing of the Oslo Agreement.
This observation was
reaffirmed recently, in May 2000, when Israel unilaterally withdrew from
Lebanon. The withdrawal followed strong internal pressures that were interpreted
by many as a significant decline in the willingness of the Israeli public to pay
the price of conflict. Indeed, Sheik Nassralla, the leader of the Southern
Lebanese guerrilla organization Hizbullah, called on the Palestinians to observe
how weak Israel had become despite its military strength.
This paper analyzes the
impact of internal socio-political and economic processes in Israel on its
strategic position in the Middle East, and especially its peace strategy during
the 1990s. We assume that Israel is facing a bloc of hostile countries composed
of players such as Iran, Iraq, Syria, Libya, and parts of Palestinian society.
The interests of these players may differ in certain aspects, and they do not
necessarily coordinate their strategy towards Israel. We assume, however, that
their basic calculations concerning Israel are similar, and therefore
concentrate on domestic variables that influence Israel’s strategic choices
while treating domestic parameters in the hostile bloc as a given.
The paper uses the general
concept of “nested games,” where players’ interests and actions in one
game are influenced by their involvement in others (Tsebelis, 1990; Colomer,
1995). Specifically, the paper applies the idea of a two-level game, as
developed for analyzing international relations and foreign policy (Schelling,
1960; Putnam, 1988; Iida, 1993; Evans, Jacobson and Putnam, 1993; Schneider and
Cederman, 1994; Mo, 1995; Schultz, 1998). Two-level game literature has
introduced solid micro foundations to the theory of international bargaining.
Most importantly, this research tradition has shown that the amount of
uncertainty in the international system is not a given but can be manipulated
both for the better and for the worse. This ambiguous potential is the essence
of a two-level dilemma in world politics in which domestic politics affects
international behavior both positively and negatively, and vice
versa – clearly, international conditions also affect domestic politics,
which again affects foreign policy. To avoid a cyclical argument, we concentrate
on explaining foreign policy based on internal conditions. The opposite
direction of this mutual dependency between foreign and domestic policy will be
discussed only when necessary.
A major debate in the
literature is whether domestic obstacles weaken or strengthen the state’s
bargaining position in international negotiations. Putnam (1988) has shown how
negotiators might claim successfully that domestic opposition prevents them from
concurring in an international agreement. Iida (1993) questions this argument
and relies on sequential bargaining to analyze how domestic constraints impact
the negotiations between two states, given various assumptions regarding
information. One basic result is that a country’s bargaining leverage does not
necessarily increase when its domestic constraints become more severe. When
there is complete information about domestic constraints, the constrained
negotiator has a bargaining advantage only if the constraints are severe. When
there is asymmetric international information, the constrained negotiator will
benefit only if the foreign negotiator strongly believes that the home
negotiator is severely constrained. Finally, Iida (1993) shows that when there
is incomplete domestic information (on the side of the home negotiator), the
constrained negotiator has a bargaining advantage if the probability of
successful ratification increases with the share that this side receives. This
opens up the possibility for misinterpretation, which may lead to efficiency
loss. On the other hand, Schultz (1998) shows that as there is more domestic
competition in a state (e.g., in democratic regimes), the ex
ante probability of war decreases, since a strategic opposition party helps
reveal information about the state’s preferences. In this paper, we argue that
the Schultz model is more accurate than the Iida model for analyzing the
interaction between Israel and the neighboring countries. Given Israel’s
democratic regime, neighboring countries can easily obtain information about
Israel’s internal processes.
Empirical studies also
question Putnam’s argument. According to Evans et al (1993: 409), leaders
“did try to strategically misinterpret their own politics, but not as often as
expected, and with much less success.” In Moravscik’s view (1993: 159),
bluffing is rare because governments might be able to predict the actions of an
eventual cheater: “…among modern information-rich democracies, it is
extremely difficult for negotiators to mask their true domestic win-set, even in
a sensitive area of national security like weapons procurement.” In other
words, as the clarity of a state’s domestic obstacles increases, the ability
of the state’s leaders to manipulate this information in the bargaining
process declines. Such clarity is more likely in democracies, but in many cases
it also exists in non-democratic systems.
With regard to Israel’s
strategic choices and foreign policy in the Middle East during the 1990s, this
paper shows how domestic obstacles and internal opposition weaken Israel’s
bargaining position towards the hostile bloc it faces. We also argue that using
this weakness to manipulate information is unlikely to be advantageous, because
of the characteristics of two-level interaction, as mentioned above.
During the 1990s Israel
faced several challenges – especially the Gulf War in 1991 and the armament of
states like Syria and Iran – which threatened to upset the balance of power
between it and several neighboring countries that comprise a hostile bloc. Those
events, as well as the Palestinian uprising (“Intifada”) since 1987, led
Israeli leaders to devise a peace policy that found expression in the Oslo
Agreement signed in September 1993 (Peres and Naor, 1993). However, due to
internal opposition within both Israeli and Palestinian societies, the peace
process, which brought great hope to the region, gradually slowed down. Moslem
and Jewish fundamentalists committed terrorist attacks on civilian populations.
The Israeli Prime Minister who made peace, Yitzhak Rabin, was murdered at a
political rally by a Jewish extremist, and Palestinian suicide bombers took the
lives of many Israelis. Thus, the public mood was more open to the right-wing
campaign that brought Benjamin Netanyahu to power in 1996. According to the
International Institute for Strategic Studies (IISS),
“The air of optimism generated by the famous Rabin-Arafat handshake on the
lawn of the White House in September 1993, dissipated long ago… official
Israeli statements refer to the process as going through a critical stage. The
Secretary-General of the Palestinian Cabinet, Ahmed Abdel Rahman, has gone much
further. In March 1998, he announced the death of the peace process.” (IISS,
The shift in Israel’s
approach to the peace process cannot be attributed solely to the fact that a
right-wing government governed Israel from May 1996 to May 1999. We argue,
rather, that it is not only ideological considerations that explain the
slow-down of the peace process but also several paradoxes within Israeli
society. Since the Palestinians, as well as other Arab countries, observe these
processes, Israeli leaders are hardly able to use domestic obstacles to
manipulate information in the bargaining process, as might be theorized
according to Schelling (1960: 22) and Putnam (1988). Therefore, a precondition
for an Israeli leader to halt the peace process for any reason and take a
conflictual approach toward the hostile bloc is to shape the preferences of
Israeli society. This includes convincing the different population segments that
Israel is playing a non-cooperative game with its neighbors – especially the
Palestinians – and creating a willingness to tolerate the high cost of violent
conflict. We show, however, that the deepening polarization of Israeli society
in various dimensions makes it very hard to create such beliefs. Therefore,
attempts by Israeli leaders to create the impression that they are willing to
adopt a conflictual approach towards the hostile bloc, without actually creating
the necessary internal conditions for such policy, may finally lead to a
sub-optimal equilibrium for Israel – in terms of territory and deterrence
ability – since it will have to compromise under difficult conditions. Once
Israeli leaders understand these limitations, it is highly probable that they
will form a peace strategy that takes into account the different interests and
sensitivities of the neighboring states. Further, the analysis suggests that a
consensus in Israeli society may be achieved if there is a sequential bargaining
process on crucial issues, with decisions on each issue being taken one at a
time, followed by implementation and evaluation of outcomes.
The paper is organized as
follows. The following section uses games in presenting the development of power
relations and equilibria in the Middle East until the 1990s. The next section
discusses domestic conditions that influence Israel’s strategic choices, as
well as its peace policy. Subsequently, we model and explain the possible impact
of those domestic conditions on Israel’s strategy toward the peace process
with the Palestinians.
Development of Power Relations in the Middle East
The main characteristic of
the relations between Israel and neighboring countries has been that these
countries did not recognize Israel’s right to exist as an independent state.
Until 1977 this was the position of all Arab countries; since then several
states – Egypt, Jordan, the Palestinians, and some Persian Gulf states –
have joined the peace process to some extent. Hostile countries, however, such
as Syria, Libya, Iran, and Iraq, still do not recognize Israel’s right to
exist. As for the Israeli side, it has recognized all Arab states, other than
the Palestinians’ right to an independent state. Moreover, until 1967 the
conflict was not about “the occupied territories” but concerned, rather,
most of the area of Israel as one large occupied territory. The minimal demand
was for Israel to give up territories it occupied in the 1948 Independence War
and to allow the return of Palestinian refugees. The maximal demand, of course,
was the abolition of Israel as an independent state. As a result, the Israeli
national security conception has been defensive at the strategic level and
offensive at the operative level (Horowitz, 1975). The defensive approach at the
strategic level has relied on conventional and non-conventional deterrence,
motivating a reciprocal arms race between Israel and its neighbors (Aronson,
Given the existential
nature of the conflict until the early 1970s, the power relations between the
Arab countries and Israel during that period can be best described as a zero-sum
game. First, we will illustrate this argument by specifying the preferences of
Israel and its neighbors, excluding the Palestinians, until the mid-1970s. Then
we will explain how, since the mid-1970s, the game between Israel and some
neighboring countries has been transformed into a symmetrical prisoners’
dilemma (see also: Brams, 1994: 85-7, 101-2). Finally, we suggest a game for
analyzing the power relations between Israel and the Palestinians.
In the first stage, the
players – Israel (I) and a given neighboring country (N) – are modeled as
unitary players, i.e., they are assumed to be homogeneous societies. In this
game each side has two strategies. Israel can cooperate (C) with the neighboring
country by signing a peace treaty which satisfies the neighboring country's
territorial (or other) demands to some extent, or not cooperate (D), meaning
that it does not give up any territory but has to invest in building deterrent
ability. The neighboring country can cooperate (C) with Israel by recognizing
its legitimacy to exist and signing a peace treaty, or not cooperate (D),
meaning that it does not recognize Israel and has to invest in the arms race.
The combination of these strategies creates four possible outcomes:
C-C: Both sides cooperate.
D-C: Israel does not
cooperate while the neighboring country cooperates.
C-D: Israel cooperates
while the neighboring country does not cooperate.
D-D: Neither side
The players’ preferences
for these outcomes are as follows: Israel mostly prefers D-C, because then it
benefits from the neighboring country’s cooperation without giving up any
territory (a). Israel’s least preferred outcome is C-D,
because then it gives up territory without benefiting (d). It pays a price both in terms of territory
and by further investment in building deterrent ability. Israel prefers mutual
C-C, to mutual defection (g), D-D, because then it can attain peace for
its citizens and reduce the cost of an arms buildup. The underlying assumption
is that Israel recognizes the benefits of peace even at the cost of territorial
compromise. As will be shown later, if this is not the case for both sides, the
conflict is even deeper than that described by a zero-sum game or by the
prisoners’ dilemma. Israel’s order of preferences is:
= (D,C) > b= (C,C) > g=
(D,D) > d = (C,D)
The neighboring country has
calculations similar to those of Israel for D-C and C-D. Yet, as explained,
until the mid-1970s the neighboring countries did not recognize Israel’s
legitimacy to exist and therefore preferred mutual defection to mutual
cooperation. That is, the neighboring country in this game did not believe it
could attain any benefits from mutual cooperation while it could benefit from
escalating the conflict. It follows that the neighboring country prefers D-D to
C-C; thus, its order of preference is:
= (C,D) > b= (D,D) > g
= (C,C) > d= (D,C)
Figure 1: A Zero-Sum Game between Israel and a Hostile Neighboring Country
b, g d,
D a, d g, b
The players’ order of
preference is presented in a game matrix in Figure 1 where a>b>g>d. This is a zero-sum game where one player’s
win is the other’s loss. Technically, if the order is presented in terms of
numbers, e.g., 1,2,3,4, the sum in each cell is the same. In this game, both
players have a dominant strategy of non-cooperation (D) leading to the unique
Nash equilibrium (g,
b). This means that in a situation of conflict
the neighboring country is better off than Israel since it does not recognize
any benefits from cooperation.
It follows that any change
in the equilibrium outcome, which existed until the mid-1970s, required a
preference change by the neighboring country. The change came about due to
certain changes in attitude after the Yom Kippur war of October 1973 (Stein,
1985). This and other processes we will not discuss here changed the attitudes
of some neighboring countries about cooperation (Mansur, 1985). They began
recognizing the advantages of mutual cooperation, meaning that the zero-sum game
presented in Figure 1 was transformed into the symmetrical prisoners’ dilemma
presented in Figure 2.
Figure 2: A Symmetric Prisoners’ Dilemma between Israel and a Neighboring
Israel C b,
D a, d g, g
In this game,
neither Israel nor the neighboring country is motivated to begin cooperating on
its own. Therefore, both sides stay with their dominant strategy of
non-cooperation and the equilibrium remains very stable. It is commonly argued
that the players can reach a Pareto-optimal outcome (b, b)
when a third party intervenes and creates incentives for (or forces)
Third party intervention is
usually discussed in the literature with respect to intrastate, often ethnic,
conflicts (Licklider, 1993; Gurr, 1993; Gottlieb, 1993). Walter (1997), for
example, studied 41 civil wars between 1940 and 1990, and showed the importance
of third-party intervention in finding successful negotiated solutions. She
argues that negotiated settlements do not fail because bargains cannot be struck
but, rather, because it is almost impossible for the combatants themselves to
arrange credible guarantees on the terms of the settlement. Regan (1996) also
studied all intrastate conflicts since 1944, showing that it is the
characteristics of the intervention strategy rather than the characteristics of
the conflict that largely determine the success of the intervention. Thus,
third-party intervention is required both to create incentives for cooperation
and to guarantee the terms of compromise.
Indeed, under the new
circumstances created by the 1973 war, the intervention of a third party became
possible and American mediation led to the first peace treaty in the Middle East
– between Israel and Egypt. In that peace process both incentives and
guarantees were needed.
To complete the analysis of
the historical conditions, we now suggest a game to describe the power relations
between Israel and the Palestinians until the early 1990s. As explained, in that
period neither Israel nor the Palestinians recognized the other’s right to
form an independent state. Therefore, the essence of the conflict was
existential, meaning that neither side recognized the advantages of mutual
cooperation. The order of preferences that corresponds to this situation is that
of the neighboring country in Figure 1. If neither side recognizes the
advantages of mutual cooperation, the D-D outcome is preferred to the C-C one.
Figure 3: The Power Relations between Israel and the Palestinians when Both
Sides Do Not
Recognize the Advantages of Mutual Cooperation
This equilibrium analysis
does not refer to domestic variables because until the mid-1970s Israeli society
and political culture were uni-dimensional on the security issue
(Arian, 1985; Barzilai, 1996; Sened, 1996). Internal conflicts were
covered by the belief that it was necessary to defend the country, as long as
the Labor party governed Israel, from 1948 to 1977. This homogeneous political
culture began to change in 1977 when the Likud party formed a coalition for the
first time. This electoral change expressed and triggered the polarization of
Israeli society in several aspects. As a result, Israel’s strategic choices
and calculations in its relations with neighboring countries have been
Processes Influencing Israel’s Strategy toward Peace in the Late 1990s
socio-political and economic processes during 1977-1998 highlight five
dimensions that influence Israel’s power and strategic choices in the
international scene: The socio-economic dimension, the ethnic-religious
dimension, the geographical dimension in terms of center-periphery relations,
the security dimension in light of the Arab-Israel conflict, and the dimension
of arms buildup, both conventional and non-conventional. In this section, we
describe the polarization in each dimension and the mutual dependence between
them. According to opinion polls, 30% of the Jewish-Israeli population regard
the increased internal tension among various segments of the people as the most
important problem on Israel’s public agenda, and 31% so regard the slowdown in
the economy, while only 19% regard the stalemate in the peace process as the
most important problem facing Israel (Ya’ar and Hermann, 1998). Since the
polarization in the various dimensions merge with each other, any Israeli
government potentially faces significant domestic difficulties in building a
consensus around a foreign policy.
Socio-Economic Dimension: Traditionally the Israeli economy has been
characterized as highly centralized due to the socialist political culture
(Horowitz and Lissak, 1989). The 1990s, however, have been characterized by
privatization processes, with various social and economic consequences. These
processes include market liberalization, deregulation, transfer of control and
management to stockholders, and attempts by international companies to enter the
Israeli market (Office for Economic
Planning’s Report, 1994). Another aspect of these processes is the
creation of flexibility and mobilization in the labor force, thus intensifying
socio-economic inequality. Further, due to security problems during the
Palestinian uprising (“Intifada”), the Israeli economy became dependent on
cheap imported labor to replace cheap Palestinian workers. The large number of
imported workers from Africa, South-East Asia and Eastern Europe created
significant social, demographic and moral problems due to their very low wages,
inequality and lack of basic social and labor rights (Kondor, 1997). This labor
policy, which was encouraged by the government, also created significant
difficulties for the Palestinian economy, which was highly dependent on the
Israeli economy (Roy, 1995).
The growing socio-economic
gaps together with rising unemployment became one of the main issues dividing
Israeli society, creating a potential for conflict. Further, when the
polarization of this dimension merges with polarization in other dimensions, the
potential for conflict intensifies. This leads us to the second dimension listed
Ethnic-Religious Dimension: Israeli
society is made up of Jewish immigrants from many countries. From the 1920s to
the 1940s, these immigrants came mainly from Europe, thus creating a
predominantly Western-oriented culture (Horowitz and Lissak, 1989). During the
1950s, after the establishment of the State of Israel, there was large-scale
immigration from Arab and Muslim states, thus changing the proportion between
the Western-oriented population segment, usually termed “Ashkenazi” and the
Eastern-oriented population segment, usually termed “Sephardi.” The arrival
of Sephardim in a predominantly
Western-oriented culture created many difficulties for them in becoming
established (Horowitz and Lissak, 1989:117). Over the long term, this ethnic
division merged with the socio-economic polarization:
The lower classes were mostly composed of Sephardim, and this intensified
their feelings of discrimination and deprivation.
Furthermore, many Sephardim
were religiously observant, and thus the orthodox-secular polarization in
Israeli society also merged with the previous two (Liebman, 1997; Horowitz and
Lissak, 1989). On the other hand, national-religious Ashkenazim also share the
popular feeling of traditional Sephardim against the individualism that
characterizes the willingness to negotiate with the Palestinians and to
recognize the PLO. In the previous decade, Israel (together with Portugal) had
been excluded from Western individualism, on the grounds of its collectivist
culture (Hofstede, 1983; Huntington, 1996: 71). As Liebman (1997: 102-103)
notes, in the current era of growing individualist ethos, religious Zionists are
the sector most committed to the values of Israel’s civil religion. The
religious import of their political and cultural approach gives it a sense of
holiness that separates religiously orthodox people from the rest of society.
The merging of polarization in the two dimensions discussed so far (i.e., the
socio-economic and the ethnic-religious dimensions) intensifies the conflicts
between these population segments. It also presents great difficulty in terms of
mobilizing the entire society for a given cause, because the bonds that
maintained a certain national consensus until 1977 no longer exist. The
polarization in other dimensions further intensifies the problem.
Geographical Dimension of Center-Periphery Relations: Interestingly enough,
polarization in the geographical dimension also fits the other aspects discussed
thus far. Many new immigrants to Israel during the 1950s were sent to the
periphery, especially to development towns in the south and north of Israel,
while the political, economic and geographical centers (i.e., Tel-Aviv and
Jerusalem) were dominated by the upper and middle classes (Arian, 1985; Horowitz
and Lissak, 1989; Lipshitz, 1996; Waterman, 1996). As a result, the periphery is
dominated by traditional and religious, lower-class Sephardim. It follows that
the geographical division of Israeli society also fits the other aspects of
polarization and inferiority, as well as their political consequences.
Security Dimension relative to the Arab-Israeli Conflict: This dimension has
been dominant in Israeli society for most of the century (Arian, 1985; Arian and
Shamir, 1990; Barzilai, 1996; Sened, 1996). The question of territorial
compromise in exchange for peace has been at the center of political debate
since the beginning of Zionism. Other questions, such as Israeli-Jewish
identity, usually merged into this dimension. In this respect, until 1977 there
was a national consensus on the policy adopted by the Labor-led government
(Arian and Shamir, 1990). However, the socio-political and economic processes
discussed so far also influenced this dimension. Since the early 1980s –
especially since the 1982 Israeli-Palestinian war in Lebanon – the
polarization between right and left in Israeli society intensified (Arian and
Shamir, 1990; 1994; Horowitz and Lissak, 1989).
To a large extent this
polarization fits the divisions in the other dimensions – lower-class voters,
the Sephardim, voters in the periphery, and religious voters traditionally
support right-wing parties (Yuchtman-Yaar and Hermann, 1998; Shamir and Arian,
1999). Shamir and Arian (1999) present a logistic regression based on a
longitudinal analysis of electoral cleavages from 1969 to 1996, and an analysis
of the 1996 election. They show that religious, Sephardim, less educated, and
lower status workers voted for the right-wing Likud and religious parties,
whereas the left (Labor and Meretz) has had a disproportionate share of secular,
upper class Ashkenazi voters. Since voting patterns significantly correlate with
the preferences concerning the peace process, this cross-sectional
characterization fits the polarization in the security dimension. This argument
is also supported by an ongoing monthly opinion poll done by Yaar and Hermann
(1993-2000), beginning in August 1993. These polls, also called the peace index,
basically examine the public’s attitudes toward the peace process given
ongoing events and the divisions in Israeli society. As explained earlier, the
range of alternatives in Israel’s policy toward neighboring countries is
ultimately reduced to a dichotomous choice: A person is either for or against
giving up territory in exchange for peace. This distinction is the basis for the
poll questions. The participants sampled are representative of the Jewish
population of Israel. According to this continuing opinion poll, the religious
population in general, and the Ultra-Orthodox in particular, has assumed the
role of the radical right-wing symbol for everything touching on the peace
process (Ya’ar and Hermann, 1997a). Among the Ultra-Orthodox only 20.5%
support or greatly support the process; among those defining themselves as
Religious 43% support the process. On the other hand, 82% of traditionalist and
78% of secular groups declared their support for the process (Ya’ar and
Thus, low-class voters,
Sephardim, peripheral voters and religious voters traditionally support
right-wing parties. Although some of these voters do not completely accept the
right-wing attitude to the Arab-Israeli conflict, they vote for right-wing
parties based on their calculations and preferences in the other dimensions
(Arian and Shamir, 1990; 1994). As a result, Israeli society faces the paradox
that a small majority of the population favors the peace process, but this is
not clearly expressed in the political division of power.
Table 1 shows
there is long-standing support for the peace process, but Netanyahu still won
the May 1996 election even though he challenged the peace policy of his
predecessors, Rabin and Peres. It was only in the May 1999 election that the
left-wing candidate, Barak, took over from Netanyahu, and that supporters of the
peace process received nearly 50% of the seats in the parliament. Thus, since
May 1999 the near-50% support for the peace process has been expressed in the
political division of power.
Table 1 also
shows certain changes in the support for the peace process over the months.
Although these changes are not statistically significant, they are usually
attributed to events and developments in the peace process. For example, violent
attacks by the Palestinians in the territories or by Hizbullah in Lebanon are
clearly followed by declining support for the peace process. Thus, the two-level
dynamic also works in the opposite direction. Not only do internal processes
influence foreign policy but international events and developments also
influence internal beliefs and processes. It is often argued, for example, that
the slowdown in the peace process during 1994-95 can be attributed to the
murderous car bombs exploded by extreme Palestinians, which killed many
It follows that the deep
polarization in the socio-economic, ethnic-religious and geographical dimensions
project strongly onto the security dimension, thus creating great domestic
difficulty for any peace policy. Furthermore, the deep polarization between
different social segments creates domestic difficulties for any foreign policy,
because Israel’s leaders cannot create a consensus for a militarist policy
either. As expressed through their behavior during the Gulf War and the
long-standing conflict in Lebanon and the occupied territories, many of
Israel’s citizens are no longer willing to pay the high price of a
non-consensual war (Barzilai, 1996; Ya’ar and Hermann, 1998). This approach
also affects the fifth dimension mentioned above – arms buildup, both
conventional and non-conventional.
Table 1: The Level of Support in the Peace Process with the Palestinians among the Jewish-Israeli Population – August 1993-April 2000
In favor (percent)
Dimension of Non-conventional Deterrence: For many years Israel maintained a
policy of obscuring its nuclear capability, by stating it would not be the first
country to introduce nuclear weapons into the Middle East (Aronson, 1992).
Nevertheless, it became common belief that Israel had an impressive nuclear
endowment. Based on his impressions from Egyptian leaders, Peres attributed
Egypt’s decision to make peace with Israel to that capability, in part (Peres
and Naor, 1993: 4-5). It did not, however, prevent Egypt from launching a
limited war against Israel four years earlier. According to some accounts, in
1973 Israel already had nuclear arms, which could be deployed from aircraft and
missiles (Hersh, 1991: 215-6; Paul, 1995). Israeli deterrent calculations were
based on the possession of superior conventional and nuclear capability, and the
Israeli leadership implicitly declared this capability to be its ultimate
deterrent against an Arab attack: Before
the October 1973 war, leaders such as Defense Minister Moshe Dayan hinted at the
Israeli nuclear deterrent and made ambiguous nuclear threats (Evron, 1990;
Bar-Joseph, 1982; Feldman, 1982; Freedman, 1975). Dayan reportedly believed that
the Arab states would not initiate a war before the early 1980s, and until then
Israel’s nuclear capability likely would act as a deterrent against
conventional attack. From 1967 to 1973, the Arab leaders and the media talked
unceasingly of Israeli nuclear capability and the implications of it (Van
Creveld, 1993: 108-110; Evron, 1973: 19-31). The Egyptians were also presumed to
have received intelligence information on Israel’s nuclear weapons and
strategy from Soviet spies who had penetrated the state’s defense and
intelligence establishments (Hersh, 1991: 219).
deterrence capability did not deter Egypt and Syria from starting a conventional
war in October 1973. Stein (1985) suggests that Egyptian internal politics were
much more important than Israel’s conventional or non-conventional strength.
Paul (1995), on the other hand, attributes this and other similar cases to the
concept of “nuclear taboo,” the notion that nuclear weapons are
characterized by their non-use. As Schelling (1994: 110) argues, the main reason
for the uniqueness of nuclear weapons is the perception that they are unique and
that once introduced into combat, they cannot be “contained, restrained,
confined, or limited.” Given this “nuclear taboo,” Israel’s nuclear
ability cannot guarantee that a limited war will not break out. Therefore, the
influence of Israeli society’s deep polarizations on its willingness to enter
into a conventional war is a central parameter in analyzing the Arab-Israeli
These polarizations, which
cannot be hidden from neighboring countries, is a source of weakness for
Israel’s position in the region. Israel’s leaders can indeed claim, as they
often have, that they cannot proceed with the peace process due to internal
opposition. But neighboring countries can also observe the strong opposition to
a non-consensual war. Domestic obstacles, therefore, can hardly be used to
manipulate information in the bargaining process. We now discuss the effect of
these obstacles on the conflict between Israel and the Palestinians.
Strategic Choices Relative to the Peace Process with the Palestinians in the
In this section, we analyze
Israel’s strategic choices with regard to the peace process with the
Palestinians in the late 1990s. Given the two-level game approach, we first
explain the preferences of the two sides as they have been shaped until the late
1990s. Based on these preferences, we outline the basic strategic choices open
to Israeli leaders. We then expand the analysis to explain the bargaining
mechanism preferred for Israel.
Applying the two-level game
to the Palestinians, their position was influenced by international events such
as the 1991 collapse of the Soviet Union and the subsequent loss of superpower
support by Syria and other Arab states, as well as the Palestinians’ own loss
of support from the Gulf States following the 1991 war with Iraq. These events
created the basic conditions for the Palestinians to move toward a cooperative
strategy as expressed by the signing of the Oslo Agreement (Zartman, 1997).
Yet, since the signing of
the Oslo Agreement, dissatisfaction with the Israeli-Palestinian peace process
has grown significantly among the Palestinian population (IISS, 1998: 146-148).
As expressed in the Palestinians’ own observations, the economic situation in
their autonomous regions deteriorated (Roy, 1995) and the Israeli government’s
new policy since May 1996 has left the impression that their demands will not be
met soon enough. As one military officer said, “When people are hungry, policy
disintegrates” (Limor, 1998). As a result, they hardly trust Israel’s
promises and commitments. This change in attitude, which mainly took place
during 1996-1998, means that the Palestinians’ order of preference in the
prisoners’ dilemma is as presented in Figure 2. They recognize the advantages
of cooperation but believe they are playing a non-cooperative game with Israel,
meaning that they prefer conflict (D-D) to the option of being the sole
Because of the internal
polarization discussed earlier, however, Israel has a different order of
preference in its game with the Palestinians. This polarization means that
Israeli society is divided in respect to the peace process. A significant
right-wing segment of society actually views the Israeli-Palestinian conflict in
terms of the prisoners’ dilemma described in Figure 2. Among them is a small
“farther right” group of Israelis who, in line with the Figure 3 game,
genuinely prefer mutual conflict with the Arabs to mutual cooperation. On the
other hand, supporters of the peace process are more inclined toward cooperation
with the Palestinians and clearly are not willing to pay the price of what they
regard “a non-consensual war”. This means that their order of preference is
similar to that in the Chicken game, where conflict is the worst outcome
(Taylor, 1987). In a symmetrical Chicken game, there are two equilibria in pure
strategies: A player will cooperate
if he/she believes the other will not cooperate, but will not cooperate if
he/she believes the other will.
It follows that, given
domestic conditions, Israeli leaders can adopt neither a conflictual approach
toward the Palestinians nor a coherent peace strategy. All they can know with
certainty is that a majority of the population supports some version of
compromise, and that to those in favor of the peace process a violent conflict
with the Palestinians constitutes the highest cost and therefore may also deepen
the polarization, towards a total disintegration of Israeli society. On the
other hand, right-wing parties and their supporters are split. Since most of
them understand that the Oslo Agreement is irreversible (Sprinzak, 1998), they
are willing to make some compromises, meaning that mutual cooperation is
preferred to mutual defection. Thus, for them as well a violent conflict is
ordered low in their preferences, while a reasonable compromise in their view
can be accepted. This approach is expressed, for example, in the relatively low
mass mobilization against compromises made by Netanyahu and Barak. In addition,
in the May 1999 elections right-wing parties which strongly opposed any
compromise in the peace process lost many seats in the parliament, and they now
constitute only 7-10% of the seats. Overall, the hard core of strong opposition
to the peace process is composed of religious settlers numbering about 50
thousand people. Although they constitute a strong interest group, they have
gradually understood their power is limited. Furthermore, following the
assassination of Itzhak Rabin in 1995 their modes of protest have modified
significantly, and the intensity of their protest activities has declined
(Yuchtman-Yaar and Hermann, 1998a). This opposition may also use party
tactical/electoral/coalition calculations to bring about the government’s
disintegration following a given move in the peace process. But these are stages
in the adaptation of public attitudes to peace and of the division of political
power in the parliament. Based on these indications, we argue that a clear
majority of Israeli public and politicians recognize the need for compromises in
negotiating with the Palestinians. This means that the long-term potential for
societal disintegration as a result of concessions is lower than the
disintegration potential as a result of conflict.
Thus, it is almost
impossible to create a consensus for a conflictual strategy toward the
Palestinians, while a reasonable consensus can be achieved over certain
concessions. Therefore, the option of violent conflict is the worst possible
outcome for Israeli leaders in their relations with the Palestinians. As
explained in the previous section, the polarization in all dimensions converges;
as a result politicians and observers have difficulty isolating the attitudes
and motivations in each dimension separately. Yet, both Israeli and Palestinian
leaders clearly observe the unwillingness of the Israeli public to pay the high
price of violent conflict. They can both interpret the preference ordering of
Israeli leaders as being similar to that of the Chicken game. Hence, due to
domestic obstacles, Israeli leaders’ order of preference in their game with
the Palestinians can be represented as follows:
a = (D,C) > b
= (C,C) > g = (C,D) > d
combination of the players’ order of preference leads to an asymmetric game as
presented in Figure 4.
Figure 4: Asymmetric Power Relations between Israel and the Palestinians
Leaders C b,
D a, d d, g
In this game, the Palestinians
have a dominant strategy of non-cooperation. Israeli leaders, on the other hand,
have an order of preference in the Chicken game, meaning they will cooperate if
the Palestinians do not cooperate but will not cooperate if the Palestinians do.
If Israeli leaders recognize the Palestinians’ order of preference, they can
expect them to choose non-cooperation. Then the best possible strategy for
Israeli leaders is cooperation, leading to a unique Nash equilibrium with pure
This equilibrium outcome
expresses the asymmetry between Israeli and Palestinian societies in terms of
their willingness to tolerate the costs of a violent conflict. Since Israeli
society is less willing than Palestinian society to bear such costs, it can be
expected to achieve sub-optimal results as long as the non-cooperative game
continues and the Palestinians are willing to enter into a violent conflict.
Furthermore, this analysis implies that possible attempts by Israeli leaders to
express an order of preference in the prisoners’ dilemma rather than
recognizing the weaknesses of Israeli society may indeed lead to violent
conflict, in which Israel will have no choice but to compromise under difficult
conditions. Given the asymmetric game presented in Figure 4, the straightforward
option for Israeli leaders is to influence the Palestinians’ order of
preference in such a way that violent conflict will become the worst outcome for
them as well. This means increasing the potential losses from a violent conflict
by increasing its costs, as well as increasing the benefits from cooperation –
i.e., accelerating the peace process rather than slowing it down. Alternatively,
Israeli leaders may try to create a broad consensus in Israeli society with
respect to the preferred strategy, whether a peaceful or conflictual one, toward
the Israeli-Palestinian conflict.
Moreover, since the
Palestinian and Israeli communities are highly integrated, Israeli leaders can
hardly use domestic obstacles to manipulate information in the bargaining
process. They can claim, as they often have, that due to these obstacles they
cannot proceed with the peace process, but the Palestinians can also see their
difficulties in creating a consensus for a militarist policy. Therefore any
attempt to manipulate information and create the impression that Israel has an
order of preference in the prisoners’ dilemma is not likely to succeed.
Rather, it may trap Israeli leaders in their own manipulation, thus creating a
cognitive dissonance. On the other hand, Palestinian negotiators successfully
use internal opposition to argue that they cannot make significant concessions.
Yet if, as a result, Palestinian-Israeli relations deteriorate to a violent
conflict, Israeli leaders will have to compromise under difficult conditions as
expected by the asymmetric game presented in Figure 4.
A more complex analysis of
the game in Figure 4, however, enables us to draw practical conclusions about
the preferred bargaining mechanism for Israel, as well as possible ways to
influence the attitudes of the Israeli public through this mechanism.
The game in Figure 4
describes the core of the strategic dilemma that Israel is facing. Although the
bargaining in the peace process is very complex, with many decision points on
specific issues and many issues on the table, ultimately it can be reduced to
several final decisions that will have to be made on key issues:
The size and location of territories to be under Palestinian rule, the
Jerusalem problem, the refugees problem, division of water resources, border
controls, and military limitations on the Palestinian state. We argue that given
the conditions existing in the late 1990s, at each of these crucial decision
points Israel is likely to face the strategic dilemma described in Figure 4. In
other words, no matter how long the bargaining continues and whatever tactical
moves the sides make, at the final point of decision the Palestinians are likely
to adopt a conflictual approach in order to force Israel to make concessions. As
long as this game continues, Israel is likely to make these concessions.
Furthermore, given the
Israel public’s unwillingness to pay the price of conflict, dividing the peace
process into many points of decision on small matters, such as the release of
three or a dozen Palestinian prisoners, creates a situation in which the public
sees a violent conflict over such points as unnecessary and therefore
non-consensual conflict. Israeli leaders therefore make the concessions. Thus,
by creating many decision points over small points, Israeli leaders actually
create a situation where the asymmetric game presented in Figure 4 is played
again and again but its outcome does not lead the Israeli public to change
preferences. The concessions at each point seem too minor to justify a conflict
and thus even when the game is repeated many times, the outcomes at one stage do
not change the conditions for the next round. This cumulative effect led Israeli
Prime Minister Barak, for example, to move from a willingness to give the
Palestinians 40% of the West Bank to a willingness to give 80-90%. This means
that breaking the peace process issues into many decision points, both in terms
of sub-issues and in terms of time, creates a situation in which there is no
difference between the meta-game and the one-stage game. Thus, Figure 4 can
describe them both.
It directly follows that
Israel has strong interest in immediately reaching the final decision points
over the crucial issues in a sequential bargaining process. That is, the best
strategy for Israeli leaders is to push for a time-constrained bargaining
process seeking agreement on each crucial point individually rather than looking
for a package deal covering all the issues. Then, if concessions on an isolated
crucial point are followed by a conflictual approach by the Palestinians, the
Israeli public can be expected to see a possible conflict over the next crucial
issue as a consensual one. The model thus concludes that the bargaining
mechanism should be composed of time constrained discussions on a key issue,
implementation of the agreement on it, evaluation of the outcomes by both sides,
followed then by another time constrained discussion on a key issue,
implementation, evaluation, and so on. In this way, both the Palestinians and
Israelis will have indications about the other’s intentions on the basis of
specific actions, rather than subjective interpretations and beliefs.
In this paper
we have shown the impact of domestic processes on Israel’s strategy toward
peace during the 1990s. Such processes intensify the polarization between
different segments in Israeli society and limit the possibility that its leaders
can create a consensus for any policy towards the Arab-Israeli conflict –
especially a consensus for violent conflict with the Palestinians. Since the
Palestinians, as well as other Arab countries, observe these processes, Israeli
leaders can hardly use domestic obstacles to manipulate information in the
Although the empirical
setting analyzed in this paper is very complex, we believe that a theoretical
game approach can help make the players’ choices very clear. Furthermore, by
using games we are bounded by certain assumptions and terminology that make the
analysis clear and well founded. For example, changes in bargaining position can
be attributed to many factors. By specifying the players, their choices and the
mutual dependence between them using simple, precise language, we can point out
explanatory variables. In this respect, the two-level game analysis clearly
helps explain the complex world of international relations. We believe it is
very hard to generalize through formal models any hypothesis regarding the
impact of a two-level interaction. Rather, we demonstrated how internal
polarization may create an order of preferences in the Chicken game. Further
research should proceed through a comparison of detailed case studies.
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