Europe’s Chance to Revive the Israeli-Palestinian Peace Process

Last month’s announcement by the British government to ban imports from West Bank settlements, backed by Canada and 11 European nations, marks the sharpest crisis between Western allies and Israel in decades. Amid U.S. inaction over escalating settler violence and continued settlement expansion, the move has triggered a predictable reaction in Jerusalem. Israel has accused Britain’s Labour government of appeasing the party’s hard left and domestic Muslim voters.

The timing of the British sanctions is undoubtedly politically motivated, with the decision coming just in time to pacify Labour’s left flank ahead of the party conference that started on Sept. 27. Beyond Britain, however, the bigger picture is much harder for Israel to challenge. It is highly unlikely that Canada and a broad coalition of European countries are all acting out of identical domestic political motives.

Last month’s announcement by the British government to ban imports from West Bank settlements, backed by Canada and 11 European nations, marks the sharpest crisis between Western allies and Israel in decades. Amid U.S. inaction over escalating settler violence and continued settlement expansion, the move has triggered a predictable reaction in Jerusalem. Israel has accused Britain’s Labour government of appeasing the party’s hard left and domestic Muslim voters.

The timing of the British sanctions is undoubtedly politically motivated, with the decision coming just in time to pacify Labour’s left flank ahead of the party conference that started on Sept. 27. Beyond Britain, however, the bigger picture is much harder for Israel to challenge. It is highly unlikely that Canada and a broad coalition of European countries are all acting out of identical domestic political motives.

Then there is the legislation introduced by U.S. Senate Democrats to sanction Israeli individuals and companies involved in the controversial E1 project, a new settlement that critics argue would cut off the West Bank from East Jerusalem and effectively destroy prospects for a viable two-state solution. As American public opinion increasingly turns against Israel, support for such measures in Washington will only grow. For now, however, it is Europe that is taking the lead.

The fact that Israel has focused its ire on Britain suggests that it views the Labour government as the ringleader of European sanctions. Israel has retaliated by ordering Britain’s representatives out of the international support center for Gaza, demanding the closure of the historic British consulate in East Jerusalem, and curtailing Britain’s role in training Palestinian Authority security forces.

As a historian who has written extensively about Anglo-American policy toward the Middle East, I see striking parallels with a similar crisis in the past. Much like U.S. President Donald Trump today, the Carter administration was mired in an Iran crisis in 1980: the Iran hostage fiasco. President Jimmy Carter had already exhausted much of his political capital in pressuring Israeli Prime Minister Menachem Begin to sign a peace treaty with Egypt in 1979 and return the occupied Sinai Peninsula to Cairo.

Carter was the first U.S. president to openly advocate for a Palestinian “homeland,” a term that was considered controversial at the time that he first used it in a press conference after taking office.

During his final year in office, he remained committed to the negotiations between Israel and the Palestinians over autonomy. At best, these promised administrative autonomy for individuals, not sovereign control over territory. During a meeting with British Prime Minister Margaret Thatcher and Foreign Secretary Peter Carington in December 1979, Carter stated that, during his 1978 tour of the Middle East, he had not met a single Arab leader who had insisted on the establishment of an independent Palestinian state. The U.S president stressed that the idea of Palestinian independence, like that of a complete Israeli withdrawal from the occupied territories, was “dead.”

The notion that self-determination for the Palestinians was out of the question did not go down well in European capitals. West German Chancellor Helmut Schmidt reportedly even described the Camp David Accords normalizing Egypt-Israel relations as “amateurish.”

As prospects for the autonomy talks became increasingly uncertain, European leaders began considering defensive actions of their own to mitigate the fallout of a potential collapse. In June 1980, recognizing that the United States was withdrawing from its active role as a peace broker, Britain and its European partners broke with Washington to unveil the European Economic Community’s (the precursor to the European Union) landmark Venice Declaration.

This initiative recognized Palestinian self-determination, and, more controversially, called for the inclusion of the Palestinian Liberation Organization (PLO) in future peace negotiations, despite the fact that the group had yet to renounce terrorism against Israel. By contrast, the Americans maintained a strict ban on any contacts with the PLO.

The communique also sharply condemned Israeli settlements as “a serious obstacle to the peace process in the Middle East.” The Carter administration warned the Europeans that their diplomacy should not “complicate” the Camp David process, but to no avail.

Israel reacted furiously. According to Shlomo Argov, Israel’s ambassador in London at the time, Britain and Europe’s policy was motivated by “narrow self interest involving the supply of oil and the disgraceful surrender to the dictates of Arab oil producers.” Begin angrily denounced the European initiative as a “Munich-like surrender” that recognized “the organization of murderers” and threatened Israel’s existence.

The Israeli accusation that Europe had succumbed to Arab oil pressure could not easily be dismissed. Amid concerns over soaring oil prices, British officials had indeed suggested that European countries adopting a more sympathetic stance on Palestinian autonomy could win favor in the Arab world and protect European energy interests. Britain was especially wary of Arab retaliation due to the widespread belief that Britain was historically responsible for Jewish settlement in the Levant and the subsequent creation of Israel.

However, the Israeli critique does not give sufficient weight to international law as a fundamental pillar of European foreign policy. The Venice Declaration was an assertion of the European ambition to elevate international law and play a more meaningful role in the Middle East.

Geopolitical considerations were equally significant: Britain believed that the unresolved conflict fueled regional instability to the benefit of Islamic radicalism and an increasingly aggressive Soviet Union. During a heated exchange in June 1980 between British Deputy Undersecretary for the Middle East Anthony Parsons and Israeli U.N. Ambassador Yehuda Blum, Parsons remarked that the Israelis were mistaken in believing that the energy crisis was dictating European policy. In fact, the Iranian revolution in 1979 had highlighted the dangers of instability. Blocking Moscow’s influence was paramount. Blum implied that Europe was asking Israel to pay the price for this and invoked the precedent of Czechoslovakia in 1938.

Following Carter’s election defeat in November 1980, the incoming Reagan administration proved unwilling to challenge the Begin government and pledged continued support for the Camp David process. In May 1982, Israeli Defense Minister Ariel Sharon visited Washington and outlined plans for a military operation in Lebanon. The Reagan administration gave the impression that it would not oppose this move.

Israel described its subsequent invasion of Lebanon in June 1982 as “Operation Peace for Galilee,” establishing a security zone to prevent PLO rocket fire against communities in northern Israel. However, by advancing toward Beirut, Israel had misled Washington regarding the true scope of the operation. During the initial stages of the war, U.S. Secretary of State Alexander Haig had persuaded Reagan that, while the Israelis could be reprimanded in private, it would be unwise to confront them in public.

Then, in September 1982, Lebanese Christian Phalangist militiamen entered the Palestinian refugee camps of Sabra and Shatila, slaughtering hundreds of civilians. Israel faced an unprecedented barrage of criticism from the international community amid claims that Israeli forces had allowed the massacre to happen under their control of the area. While Reagan rebuked Israel, he took no concrete action. In contrast, Britain’s Conservative government and its European partners imposed an arms embargo and froze financial cooperation with Israel.

That same month, Reagan unveiled his own peace initiative in a belated effort to restore stability following the Israeli invasion. The plan proposed the establishment of a self-governing Palestinian authority through free elections in association with Jordan on the West Bank. It also demanded an immediate settlement freeze in the Palestinian territories. However, he quickly backed down in the face of the Begin government’s opposition.

It is instructive, therefore, to contrast Reagan’s backing down with the approach of his successor, George H.W. Bush, whose hand was strengthened after he assembled an international coalition to expel Iraq from Kuwait in 1991. Following Iraq’s defeat, Washington used the momentum to convene the landmark Madrid Peace Conference, which brought all parties together for direct negotiations for the first time in history.

Bush demonstrated rare U.S. leadership in the Middle East and was unafraid of confronting Israel. His secretary of state, James Baker, applied great pressure on When Israeli Prime Minister Yitzhak Shamir to attend the conference. When Shamir defied the Bush administration by expanding settlements in the West Bank, it took the unprecedented step in 1992 of withholding $10 billion in U.S. loan guarantees. Washington sent an unmistakable signal to the Israeli electorate: If the country wanted U.S. financial backing to continue, it needed a change of direction. That pressure was widely credited with bringing the Labor Party’s Yitzhak Rabin to power.

Decades later, Israel’s electoral landscape has changed. With an Israeli election barely less than a month away and growing evidence that voters have shifted to the right, it is becoming increasingly clear that encouraging a permanent siege mindset has become a political lifeline for Israel’s embattled prime minister, Benjamin Netanyahu. It is no coincidence that Netanyahu cut his political teeth as deputy chief of mission at the Israeli embassy in Washington in 1982, a previous time when Israel faced diplomatic isolation over its invasion of Lebanon.

The Trump administration’s Gaza peace plan, which was announced with great fanfare a year ago, appears to be fading away. Amid the distractions of the Iran quagmire and U.S. midterm elections in barely more than one month, the situation in the West Bank is increasingly combustible—and the Trump administration is conspicuous by its absence. This once again leaves the Europeans to step into the vacuum.

While some individual European countries have imposed sanctions on Israel, the EU as a whole has been more cautious. Although the EU has significant leverage with Israel as its largest trade partner, it has been reluctant to utilize it. Last year, EU foreign-policy chief Kaja Kallas described “divergent views” on sanctions and stated, “we don’t move with the measures now, but we don’t take them off the table either because the situation is fragile.” Israel knows that the situation could change.

In a controversial speech in September 2025, Netanyahu admitted that Israel was experiencing a “type of isolation.” He asserted that Israel had to become a “Super-Sparta” that is economically and militarily self-reliant. “Can we get out of this isolation? Yes—I am a devotee of the free market, but we’ll have to have some signs of an autarky.” Clearly, he was rattled by the threat of sanctions.

The charge that the EU is irrelevant when it comes to the Israeli-Palestinian conflict has some merit. Voiced in Israel and elsewhere within days of the Oct. 7, 2023, Hamas attacks, it is linked to the belief that the EU is too hamstrung by internal divisions to speak with a united voice. Yet history has shown that the Europeans thrive in the space created by Washington’s missteps. Given Trump’s increasing distraction and weakness, they now have a unique opportunity to breathe new life into their activism in the Middle East.