Why Trump is right to back away from the ‘two-state solution’ in the Middle East

President Donald Trump (R) and Israeli Prime Minister Benjamin Netanyahu hold a joint press conference in the East Room of the White House in Washington, DC, February 15, 2017.
Saul Loeb | AFP | Getty Images
President Donald Trump (R) and Israeli Prime Minister Benjamin Netanyahu hold a joint press conference in the East Room of the White House in Washington, DC, February 15, 2017.

Israeli Prime Minister Benjamin Netanyahu's visit to the White House Wednesday and the joint news conference that followed, led to a heavy focus on the fact that the Trump administration will now drop the long-held American requirement that the Israelis support a "two-state solution."

That's big news. And it's very good news. It's good for Israelis, Arabs, and America. Here's why.

That two-state "solution" has never been a solution at all. In fact, it's just one of the many U.S. policies supposedly meant to support peace that has done just the opposite. In fact, just about every policy we've heard from U.S. administrations from both parties for the last 40 years about the Arab-Israeli conflict has been wrong. The insistence that a two-state solution is the only path to peace between Arabs and Israelis? Wrong. The idea that no peace can be achieved until the Palestinian leaders renounce terrorism first? Wrong. And then there's the biggest misconception of all: The idea that Israeli settlements on the West Bank are a barrier to peace.

Actually, Israel's settlements and a commitment to more of them would bring more peace, prosperity, and freedom to both Israelis and Arabs for many years to come.

Yes, you read that right. Those universally demonized West Bank "settlements" Israelis set up after the Six Day War to renew the ancient and more recent pre-state of Israel Jewish presence in cities like Hebron and Beit El are actually an example of economic, strategic, and political keys to peace between Arabs and Israelis.

Contrary to popular belief, Jews and Arabs interact constantly even on those disputed lands. Jewish businesses on the West Bank employ Arabs all the time. The most famous example was the juggernaut drinks-machine company SodaStream, which even had several Arab employees in management positions before an international boycott movement forced the company to move to Israel proper in 2015. But success stories still abound, as Israel has increased Arab participation in the best segments of its economy. Arab unemployment in Israel is down. The number of Arab judges is way up. And an Arab-Israeli is even the chief of emergency medicine at Israel's famed Hadassah hospital. This is pluralism at work and on the move in the way we used to be told was the key to peace everywhere.

So how can the violence be stopped? More settlements. The one thing that most emboldens terrorists and anyone who never really wants peace there is when Israel rewards terrorist activity by ceasing the economic growth and expansion of opportunity that also comes from its physical expansion. As long as the Arab people believe that the Israelis might leave one day if they are just harassed enough, the chances of that terrorist harassment will be great. But as long as new and thriving settlements and visible Israeli military might continue to grow with them, the Apocalyptic promises of Hamas and the other terrorist leaders will be hollower than ever.

Conversely, removing settlements don't bring peace; they only embolden more terrorism. Israel's unilateral withdrawal from Gaza in 2005 proves this beyond doubt as it has since become little more than a launching pad for rocket attacks into the rest of the country. And Gaza has lost its Christian Arab population, which has fled to avoid living in peril under yet another Islamic quasi-caliphate.

And then there's another part of the great misconceptions in this peace puzzle: The idea that only the United States and the European Union can bring peace between Israel and the Palestinians. And all they have to do is get Israel to allow the Palestinians to have some land and get the Palestinians to renounce violence against Israel. The only trouble is the Israelis have agreed to a Palestinian state at least four times since 1947. The Palestinians have rejected it each time. The U.S. and Europe have responded each time by providing more economic aid to the Palestinians and pressuring Israel to make more concessions. That hasn't worked.

So, as he mentioned during Wednesday's White House news conference, Netanyahu and his government have been forging new ties with countries like Egypt and Saudi Arabia instead. The opening for this tactic came thanks to their mutual fears of a nuclear and suddenly cash-rich Iran. This could easily lead to some kind of understanding with Arabs living in the West Bank. That's because, for years, Saudi Arabia in particular has been a prime instigator and funding source of Palestinian terrorism via direct and indirect means. That could change now. Egypt, once a haven for anti-Israel terror groups, has also been cutting off Hamas and others like them ever since the new relationship with Israel began to blossom. Without the help of enough local friends in the region, the worst Palestinian terrorist leaders are on shakier ground. And conversely, think of the progress we could see if Saudi Arabia was willing to financially bail out the Palestinians in some way, and the Egyptians were willing to provide more control of Gaza both in return for Israeli and American military protection from Iran.

Israel should continue to build and expand, and annex all the existing West Bank territories into Israel proper. Israeli citizenship, with all the rights and privileges it entails, should be offered to all its inhabitants. This is not a crazy idea, but a simple recipe that worked in Israel proper for generations and has produced too many Jewish and Arab success stories to count.
But the rest of the world is enamored with bashing the settlements and promoting an insane two state solution that is no solution at all. Haven't any of these two-state-solution advocates read a history book lately about how creating lots of little countries in small areas only adds to the chances of war? Isn't it about time we give pluralism a chance instead of more Balkanization?

And what about those who say they worry that Israeli annexation of these areas will pose a demographic challenge and Israel will soon become a state with a minority Jewish population? First off, many of those dire Arab vs. Jewish birth rate predictions have been debunked by population experts. But more importantly, since when is the world so concerned with Jewish racial purity? Again, pluralism is the path to peace in a diverse world. Arabs, Jews, and Christians are living relatively peacefully and much more prosperously in Israel proper and have been for years. It's time for everyone living in the West Bank territories to enjoy the same rights and opportunities and not the time for anyone to insist on more racially and religiously segregated states.

Perhaps the backing off from the two-state solution policy from the Trump team is the first step toward real progress in this peace effort in many years. Perhaps the insane adherence to the failed policies of the past and present won't continue, and that's really good news for America, for Israelis, and for the Arabs.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.