Introduction
This is the tenth annual strategic report for the Palestinian Forum for Israeli Studies “MADAR,” which is being issued for the tenth consecutive year. It tracks and monitors the most prominent updates and factors that have affected the Israeli landscape, and attempts to foresee the transitions at their preliminary and middle stages. As has been the case since the first MADAR report, issued ten years ago, the report has been prepared and written by a group of specialist researchers of Israeli affairs.

The report explores the Israeli landscape through seven main axes: the Israeli-Palestinian relations and negotiations, internal affairs, foreign policy, security and military, economy, society, and lastly, Palestinians in Israel. The report presents an executive summary that comprises the most significant strategic changes that affect Israel’s internal and regional outlook.

A number of developments and strategic variables affected Israel in
2013.They directly determine its direction and crystallize its internal, re- gional, and international policy.

At the forefront of these variables are the Israeli-Palestinian negotia- tions, which America actively mediates. They started at the time of Beny- amin Netanyahu’s formation of his third right-wing government, the same time Israel was being threatened, especially by Europe, with “sanctions,” should the former hinder the peace talks. This is also at a time of regional unrest in adjacent countries to Israel, especially in Syria and Egypt, which has lead to the gradual marginalization of the Palestinian question on a regional level, shadowed by new regional questions. Lastly, there is the Ge- neva Agreement signed by a group of 5+1 countries and Iran in regards to Iran’s Nuclear Program and its effect on the map of regional alliances, Israel’s place among these alliances, as well as on Israel’s public policy that Netanyahu has been applying ever since resuming his position as a Prime Minister .His government prioritizes the Iranian question and attempts to impose the Israeli outlook on both the United States and the rest of the world, focusing on a policy of sanctions and militarism.

1) Resuming Negotiations – Potential Scenarios

The negotiations are at a stage they have not been since the negotia- tions of Camp David in 2000, which, according to many Israeli and inter- national readings, renders them as a critical event that could affect the re- gional outlook and future. The United States Secretary of State, John Kerry, has been summoning his efforts into reaching an agreement at a time of regional tumult and unrest, where the conflict with Israel has turned into a minor cause in comparison with the Arab counties, which are consumed with their internal problems and trying to face the aftermath of the “Arab Spring.” Some readings see this absorption as an “opportunity” for Kerry to succeed in his mission. For, as has been noted by Dennis Ross, this provides both sides with more flexibility to maneuver and reach agreements with-

out external pressure. However, it is more accurate to say that the current state of the region forms, according to many Israeli readings, a unique op- portunity to fortify Israel’s stance in the negotiations and impose a com- promise that matches its vision. This applies on two levels:

1. The geo-strategic level: the current state of instability and bloody conflicts in the Middle East reveals Israel as the only safe spot in the Middle East and the only one which can be trusted with strategic alliances – a view that Israel has been trying hard to build over the years, finally achieving it as it has gradually become the most significant U.S. ally. Moreover, the escalation of the civil war in Syria, the threat of state disintegration, and the amount of violence dominating the civil war consolidate Israel’s geo- strategic position, consequently serving as a political capital that can be bartered and exchanged. On the other hand, it renders the Arab side as a changing, unstable, weak and unreliable side.

2. The politico-diplomatic level: the Arab countries’preoccupation with the change sweeping the Arab world has transformed the Palestinian cause, on both official and popular levels, from a main to a minor question. This shift reflects on the weight of the “Palestinian Cause” on the scale of burgeoning alliances and inflamed conflicts between the different axes. On the other hand, Israel has ceased to be the main enemy of the Arab countries, as those have shifted their focus onto internal Arab affairs and external ones such as the Iranian axis. According to Israeli readings of the situation, this fortifies Israel’s maneuvers as opposed to the Palestinians’ and provides it with the opportunity to create facts on the ground without stirring any diplomatic attention. It also provides it with more flexibility to move as it pleases and maneuver American and European pressure, providing it with an opportunity to decree an agreement that matches its vision.

Aside from the regional environment offering an opportunity for flexible maneuvering and pressuring (most likely of Palestinians) into reaching an agreement, there are two additional factors that multiply the chances of reaching a “peace” or a “frame” agreement:

1. The fear of becoming a bi-national state: Netanyahu wishes to cut this scenario short, which ultimately means the demise of the “Jewish State”1, an option that Israel is being warned of in case it does not reach an agreement with the Palestinian side.

2. Netanyahu’s personality: contrary to the image he portrays of himself as an obstinate leader, he is willing to “comply with pressure” and ready to change his stance in case of serious American pressure. Here, one may refer to the times where pressure played a role in altering his position, such as the Hebron Protocol, the release of Ahmed Yassin following the failure of Khaled Mashal’s assassination, and agreeing to a ten- month settlement freeze during 2009-2010.

However, even though the regional environment is encouraging of reaching an agreement that mainly matches Israel’s interests, it may also pose as a limitation for Israel, which might see in the instability and disintegration that threatens such countries as Syria and Libya as a sign that deters them from signing an agreement with the Palestinians, lest, provided with the right conditions, “future revolutions” lead to the rise of enemy powers as had previously happened in Gaza.