The greatest tragedy of the Israeli-Palestinian conflict is that all reasonable parties know the contours of a final settlement, yet such a settlement is not close at hand. Israel will retain large settlement blocks close to the 1967 "Green Line" in exchange for an equivalent amount of uninhabited Israeli land. The smaller, outlying settlements will be dismantled. Palestinian refugees will be allowed to return to a future Palestinian state and will be compensated by the international community for the loss of their land in Israel.
The contentious status of Jerusalem as a capital for Israel and for a Palestinian state is perhaps the one issue about which there is little consensus for a specific plan. The Palestinians have long made known their desire for (East?) Jerusalem to serve as the capital of a Palestinian state. Israel's desire to maintain Jerusalem as its capital is no less strong; to quote the Forward, "Since 1967, every Israeli government… has vowed that the city will remain the eternal and indivisible capital of the Jewish people." To that end, Israel annexed East Jerusalem after the 1967 Six Day War. Arab residents of East Jerusalem carry Israeli identity cards, allowing them freedom of movement throughout Israel, along with access to Israeli social services including education and health care. Israel's annexation of East Jerusalem and claim of Jerusalem as its capital has been disputed internationally and no countries maintain embassies in Jerusalem (though many did prior to the 1980 passage of UN Security Council Resolution 478, which called on "States that have established diplomatic missions at Jerusalem to withdraw such missions from the Holy City").
There have been a few potential solutions to the Jerusalem question discussed over the years. In the days before Israeli statehood, the United Nations considered making Jerusalem an "international trusteeship" governed by and belonging to the international community. Morfe recently the Israeli right has considered rezoning East Jerusalem to include the Palestinian town of Abu Dis, then allowing the Palestinians to claim (far) East Jerusalem (née Abu Dis) as their capital. Another somewhat obvious, though politically and logistically difficult, solution would be to simply divide the city, probably along the lines of Nicosia (or even Jerusalem circa. 1948-1967 but with the Old City and other Jewish holy sites retained by Israel). Transferring sovereignty over any part of Jerusalem is often claimed to be a red line for Israel, but Israeli prime ministers have alluded to the possibility of negotiating a solution for Jerusalem. On a rare occasion, the idea of dual-sovereignty for Jerusalem is brought up, despite the fact that the very term "dual-sovereignty" is a contradiction.
In this article, I propose a solution that would allow both sides to claim an undivided Jerusalem as their capital: a customs union for Jerusalem. Under this plan, entrance to and exit from Jerusalem would be subject to passport control and customs procedures not dissimilar from what you would find in an international airport. Entrances from the West Bank into Jerusalem and exits from Jerusalem into the West Bank would be controlled by a third party agreeable to both sides with a token Palestinian presence. The third party would automatically allow Palestinian passport holders to return to the West Bank, but would have total control of screening people entering into Jerusalem. The Palestinians could observe the process to be sure their citizens are treated fairly, but would not have ultimate authority over the West Bank-Jerusalem border. The Israeli border police would control entrances from the rest of Israel into Jerusalem and from Jerusalem into the rest of Israel. These checkpoints (and what are passport control and customs crossings if not checkpoints?) would presumably be less strict for people entering Jerusalem than for non-Israelis exiting Jerusalem. There would be no need to wall off the western border, as there is no history of Israelis mounting terrorist attacks in Jerusalem.
Both Israelis and Palestinians would have freedom of movement within Jerusalem. But it is important to note that Palestinians could not automatically enter Israel and Israelis could not automatically enter the Palestinian state. They would each be subject to the same procedures as at any international border crossing. This arrangement has the added benefit of an additional layer of security screening for Palestinians and other foreign nationals exiting Jerusalem. The separation barrier that Israel has constructed around much of East Jerusalem would actually make this process easier by making it more difficult to avoid customs and border control. Obvious locations for crossings from the West Bank would include Routes 1, 60, 404, and 417. Permanent border crossings could be made much larger, more efficient, and faster than the current system of Israeli checkpoints, something more akin to the US-Canadian border crossing on I-87.
Inside Jerusalem, Israel would cede sovereign control and responsibility for East Jerusalem along a border that roughly follows the 1949 armistice line, with alterations made for the demographic realities on the ground. Israel would retain sovereignty over Mount Scopus, the Mount of Olives, Jewish majority neighborhoods in East Jerusalem, and the Jewish Quarter of the Old City, including the Western Wall tunnels, and the status quo would prevail on the Temple Mount. The Armenian and Christian Quarters could vote on which state to join. The Palestinians would then be fully responsible for the mundane aspects of sovereignty, such as garbage collection, policing, and road maintenance. The division between East and West, Palestinian and Israeli sovereignty, would be visible and well marked, but not guarded or blocked. This aspect of the plan finds precedent in Articles 20 and 22 of the Schengen Borders Agreement, which eliminated border checks and removed "obstacles to fluid traffic flow at road crossing points," between the 25 European countries subject to the agreement. These (non-)border crossings have visible signs marking the border.
This sort of division would be difficult in its technical aspects, but not impossible or unprecedented. Residents would pay their taxes to their respective governments, but the city would be a free trade zone with no tariffs for goods crossing between West and East Jerusalem. Joint agreements on policing, the ability to pursue criminals across the East-West Jerusalem border for example, could be negotiated just as they are between adjoining American cities and states.
Differences in Israeli and Palestinian law may complicate these matters, as laws might be somewhat more different between the Israelis and Palestinians than they are between New York and New Jersey. This situation is precisely why the border between East and West Jerusalem must be clearly marked, just as it is within the Schengen Group. I also propose that the legal status quo remain in place for all of Jerusalem for a period of at least ten years.
Utility arrangements between sovereign states are also possible. For example, the United States and Canada share power grids and use the same telephone exchange system. Over time, one might expect (hope?) that a variety of joint Israeli-Palestinian ventures, both governmental and private-sector, would develop, just as we have seen in the Israeli-Jordanian and Israeli-Egyptian "Qualified Industrial Zones."
It is important to note that under this plan Jerusalem would not be an "international city" or even a "bi-national city." Technically, it would function as two separate cities that abut each other. It would be a "free city," fully open to Israeli and Palestinian passport holders and to whomever is granted a visa by either state. Regardless of residence in East or West, Jewish and Arab Israeli citizens would vote in Israeli elections, and Arab Muslims who are not Israeli citizens would vote in Palestinian elections. Druze, Christians, Samaritans, and other groups would vote strictly based on residency.
There are likely to be at least two major objections to this proposal. On the Israeli side, there will be extreme reluctance to concede sovereignty over any part of Jerusalem to the Palestinians. Indeed Nir Barkat, the mayor of Jerusalem, recently reiterated his desire to maintain Israeli sovereignty over the entirety of Jerusalem. As sympathetic as I am to his desires, I believe that this is the only way for Jerusalem to both remain undivided and to be recognized internationally as the capital of Israel. There is little to gain politically or strategically from continued Israeli control of East Jerusalem other than a marginal increase in safety from attack. By placing entrance into East Jerusalem from the West Bank in the hands of a third party, the security threat is greatly reduced; the lifting of responsibility for the administration of East Jerusalem could be a cost saving measure; and, as shown below, there are long-term demographic benefits as well.
The other major objection will come from the Arab residents of East Jerusalem, who have historically, and quietly, supported East Jerusalem remaining part of Israel. They do not want to give up the Israeli identity cards that grant them access to Israeli medical care, schools, and other social services. This issue is difficult, but I propose that all Arab residents of East Jerusalem with Israeli identity cards be allowed to keep those cards, even as they gain Palestinian passports. Those Palestinian Jerusalemites born after this agreement is signed would not have access to Israeli social services or be granted Israeli identity cards; they would be Palestinian passport holders with the same rights as any other Palestinian in Jerusalem.
To make this plan work would require a considerable investment by the international community. To start, it would require that those states that recognize Israel move their embassies to Jerusalem (which for many states can be done rather cheaply by changing the signs from consulate to embassy). As part of this agreement, the international community should agree that no single embassy could handle relations with both states. Though this is common practice for smaller states all over the world, in this context it is too politically charged to be tenable in this situation. States that can afford it should be encouraged to maintain consulates in both Tel Aviv and Ramallah to handle situations and issues that arise outside of the customs union.
This plan also requires the ongoing commitment of armed personnel to staff customs and border control on the West Bank-Jerusalem border. It requires financial and technical support to complete some of the technical aspects of untangling Israeli and Palestinian sovereignty, and to adjudicate disputes. The international community's financial support for projects that benefit the Palestinians seems to know no limits and I do not believe it would be difficult to secure support for this plan if both sides signed on. The staffing issues are more difficult. The customs and border control should be staffed by states that have a commitment to peace between Israel and the Palestinians, as well as a fear of Islamic extremism and terrorism in their own states: Egypt, Jordan, and Turkey are obvious choices. Other international positions should be staffed by states that have little stake in the conflict and are not publicly perceived to be hopelessly biased toward either side. Those states seem to be few and far between, but I might suggest Fiji, which has a great deal of experience in peacekeeping missions in the Middle East and maintains good relations with both sides.
It is important both to the Israeli and to the Jewish psyche that Jerusalem remains the eternal undivided capital of Israel. It is also important to Palestinian national pride that Jerusalem be the capital of a future Palestinian state. This proposal provides a workable plan that allows both sides to claim an undivided Jerusalem as their capital, while avoiding the dual-sovereignty contradiction. Israel would gain both international recognition of Jerusalem as its national capital, and an increase in the Jewish majority of the state when the Israeli residency of the East Jerusalem Arabs expires at the end of the current generation. The Palestinians would gain both Jerusalem as their capital as well as access to jobs and the economic benefit of free trade with West Jerusalem. It is a plan that will almost certainly not fully satisfy anyone, but will enrage only the extremists on both sides. If enough interest is shown, a future iteration of this proposal will provide further details on the locations of the border, and on the logistical challenges of managing two separate but interconnected municipalities.