What Is U.S. Policy on the Israeli-Palestinian Conflict?

Introduction

Israelis and Palestinians have clashed over claims to the Holy Land for decades, a conflict that has long been one of the world’s most intractable. Although the United States is a strong supporter of Israel, it has traditionally tried to advance a diplomatic solution that would reconcile the competing claims of the two parties.

Multiple U.S. administrations have proposed road maps for a peace process that would result in two states, one Israeli and one Palestinian. However, critics say President Donald Trump limited prospects for a two-state solution by implementing controversial policies regarding core components of the conflict. Though the Joe Biden administration has reiterated U.S. support for a two-state solution, it has reversed only some of Trump’s changes while leaving others in place. Meanwhile, violence between the two sides has reached levels not seen since the last Palestinian uprising ended in 2005.

What is the Israeli-Palestinian conflict about?

The Israeli-Palestinian conflict is rooted in a century-long territorial dispute over the Holy Land, a Middle Eastern region with great religious and historical significance to Christians, Jews, and Muslims.

Increasing numbers of Jews began moving to Ottoman Palestine—a predominately Arab region—following the 1896 publication of Theodor Herzl’s The Jewish State, which promoted the idea of a haven for Jews in their ancient homeland to escape antisemitism in Europe. The migration accelerated after the Holocaust of World War II, in which Nazi Germany killed six million Jews.

In 1947, after years of Arab-Jewish violence, the UN General Assembly voted for the establishment of two states in Palestine, one Jewish and the other Arab. Shortly after, the Jewish community in Palestine declared Israel an independent state, prompting hundreds of thousands more Jews to emigrate, and precipitating a war launched by neighboring Arab states.

For their part, Palestinian Arabs say Jews have usurped their ancestral homeland with help from Western powers, including the United States and the United Kingdom. They refer to Israel’s establishment and its defeat of allied Arab armies in the 1948 war as the Nakba, or catastrophe, which the United Nations estimated uprooted more than seven hundred thousand Palestinians.

In the decades since, the Israeli-Palestinian dispute has continually flared into conflict, including multistate wars, armed uprisings (intifadas), and terrorist acts. A major turning point was the 1967 Six-Day War, which culminated in Israel’s occupation of East Jerusalem, the West Bank, and Gaza. In its aftermath, the UN Security Council adopted Resolution 242, which called for Israel to withdraw from occupied lands to secure and recognize borders in exchange for peace. The resolution lacked details, but nonetheless was a milestone, becoming the basis for future diplomacy to end the Arab-Israeli conflict.

Today, the region is home [PDF] to 2.2 million Palestinians in the Gaza Strip and 3.2 million in the West Bank. Although most of Israel’s 9.7 million residents are Jewish, there are around two million Arab citizens. International diplomatic efforts to broker a political settlement have made limited headway. More recent U.S.-led diplomacy has focused on resolving several core issues:

Borders. The notion of having two separate states, one Israeli and the other Palestinian, commonly referred to as the two-state solution, has had significant international support for decades. It would establish a Palestinian state that includes most of the West Bank—with land swaps to compensate it for Israel’s absorption of some Jewish settlements there—and Gaza, which Israel unilaterally withdrew from in 2005. Most international diplomacy promoting a two-state solution favors Israel’s reverting to a version of its pre-1967 borders, but there is no consensus on how doing so could account for Palestinians within those borders and Jewish Israelis living beyond them.

Jerusalem. The disputed city straddles the border of Israel and the West Bank. Israel has annexed the whole city as its capital; the Palestinians claim East Jerusalem for the capital of their state. A two-state solution would require a Palestinian capital in East Jerusalem.

Refugees. The wars in 1948 and 1967 created some one million Palestinian refugees. The survivors and their descendants, mostly living in Jordan, Lebanon, and Syria, claim the right to return to Israel, as supported by a 1948 UN General Assembly resolution. Debate continues on whether survivors’ descendants should also be considered refugees with that right. Israel sees the right to return as a threat to its existence as a Jewish state, and believes the refugees should go to the Palestinian state that would be created as part of a two-state solution.

Security. Israel views some Palestinian militant groups as existential threats [PDF], particularly Hamas, the Islamist organization that governs Gaza and has vowed to destroy Israel. Its suicide bombings and rocket attacks usually target Israeli civilians. Israel wants these groups to disarm and the Palestinian state to be demilitarized, but accepts that Palestinians should have a strong police force. The Palestinians seek an end to Israel’s military occupation and want full control over their own security, but accept limitations on their arms. Israel wants to maintain the ability to act in Palestinian territory against threats to its security.

Mutual recognition. Each side seeks recognition of its state by the other, as well as the international community. Most Israeli Jews want to see Israel recognized as a Jewish state, while Palestinians want Israel to acknowledge their forced displacement under the Nakba.

End of conflict. Both sides seek a peace agreement that would end their conflict and honor the claims of each side, and lead to peace and normalization of Israel’s relations with all Arab states, as provided for in the Arab League’s Arab Peace Initiative.

What are U.S. interests in the dispute?

The Middle East has long been of central importance to the United States as successive administrations pursued a broad set of interrelated goals including securing vital energy resources, staving off Soviet and Iranian influence, ensuring the survival and security of Israel and Arab allies, countering terrorism, promoting democracy, and reducing refugee flows. Correspondingly, the United States has sought to resolve the Israeli-Palestinian conflict, which has been a major driver of regional dynamics, with an eye toward obtaining these strategic objectives while balancing its support for Israel and pushing for broader regional stability. At the same time, the dispute has been a core concern of the American Jewish community and Christian Evangelicals, both strong supporters of Israel.

However, U.S. interest in resolving the conflict has waned in recent years. After the start of the 2011 uprisings commonly known as the Arab Spring, the wars in Syria and Yemen, Iran’s push for dominance in the region, and terrorist groups such as al-Qaeda and the self-proclaimed Islamic State posed more immediate threats to U.S. interests. Additionally, U.S. relations with Iran and the Arab Gulf states no longer seem to hinge on Israeli-Palestinian issues, making the conflict even less of a priority.

How has the U.S. been involved in the conflict?

The United States has been a central player in the Israeli-Palestinian conflict for more than half a century. It became involved shortly after World War II, joining the United Kingdom in a 1946 inquiry [PDF] that recommended one hundred thousand Holocaust survivors relocate to Palestine, which would be neither a Jewish nor an Arab state. The United States then became the first country to recognize Israel as a sovereign nation in 1948.

After the 1967 Six-Day War, the United States attempted to mediate the broader Arab-Israeli conflict along with Britain, France, Russia, and the United Nations. However, it was the 1973 war, in which Israel struggled early on to defend itself against invading Egyptian and Syrian forces, that compelled the United States to take the lead in future diplomacy. Although Israel won the conflict militarily, the Arab powers delivered a major psychological blow.

The war was also a major turning point for U.S. foreign policy in that it prompted Arab oil producers to impose a harmful oil embargo on the United States, and it brought the United States—which supported Israel—and the Soviet Union—which armed Egypt and Syria—close to a nuclear confrontation after a period of détente. The war also proved a boon for the Palestinian cause, with the Arab League recognizing the Palestine Liberation Organization (PLO) as the “sole legitimate representative of the Palestinian people” in 1974.

In the months after the fighting, U.S. Secretary of State Henry Kissinger served as the principal intermediary between the Arab states and Israel. His shuttle diplomacy among Middle East capitals in 1974 and 1975 helped de-escalate the war and disentangle the combatants.

In 1978, U.S. President Jimmy Carter hosted the Camp David peace talks between Israel and Egypt, which produced two frameworks that would lay a foundation for future Mideast diplomacy. The first called for talks involving Egypt, Israel, Jordan, and the Palestinians about Palestinian self-rule in Gaza and the West Bank. The second called for a peace treaty between Egypt and Israel, which the two governments signed in 1979 at the White House. Though Jordan was also a party in the 1973 war, it did not join the talks, fearing condemnation from other Arab nations. A separate Israel-Jordan peace treaty was signed in 1994.

Although the United States was left out of negotiating the 1993 Oslo Peace Accords—under which Palestinian leaders recognized Israel’s right to exist, and Israel recognized Palestinian autonomy in Gaza and the West Bank—the disputing parties signed the final agreement at the White House. The United States and the Bill Clinton administration played a larger role in 1998, when it sponsored negotiations between Israel and the PLO that led to the Clinton Parameters for the establishment of a two-state solution. Since then, successive administrations have proposed their own plans for a two-state solution: George W. Bush’s Road Map to Peace, Secretary of State John Kerry’s Six Principles, and Trump’s Peace to Prosperity.

While trying to broker a deal between the parties, the United States has shielded Israel from international criticism, which some say has hindered diplomacy to resolve the conflict. Since 1970, the United States has used its veto power as a permanent member of the UN Security Council to block resolutions censuring Israel dozens of times because it sees the United Nations as a forum that is biased against Israel. Since 1980, the United States has only once allowed the Security Council to condemn Israel for its settlement construction, in late 2016, when the outgoing Obama administration abstained from a vote on the matter.

The Trump administration opted to side with Israel on various matters, breaking with decades of U.S. policy aimed at serving as a neutral broker in negotiations. In August 2020, the administration mediated an agreement between Israel and the United Arab Emirates, known as the Abraham Accords, in which the two countries pledged to begin normalizing ties. Under that deal, Israel also agreed to temporarily halt plans to annex about 30 percent of the West Bank. Bahrain, Morocco, and Sudan later announced their own U.S.-brokered deals to normalize relations with Israel. Opponents of normalization say these moves betray the Palestinian cause, as the 2002 Arab Peace Initiative stipulates that Arab League members will establish relations with Israel only after the creation of a Palestinian state, among other conditions.

Rather than trying to resolve the overarching dispute [PDF], the Biden administration has focused on promoting equal rights for Israelis and Palestinians and encouraging more nations to seek normalization with Israel. It has maintained support for a two-state solution and denounced moves that could threaten this outcome, such as planned expansions of West Bank settlements and messaging from both sides that encouraged violence. The administration also worked behind the scenes to establish a cease-fire between Israel and Hamas when a conflict broke out between the two in 2021. 

The Biden administration has a strained relationship with the right-wing Israeli government elected in December 2022, citing concerns about settlement expansion and potential democratic backsliding due to Prime Minister Benjamin Netanyahu’s plan to overhaul Israel’s judiciary. Even so, the administration reiterated U.S. support for Israel’s right to defend itself in July 2023, when Israel undertook the biggest in a series of controversial counterterrorism operations against new militant groups in West Bank cities such as Jenin and Nablus. Biden has also criticized the unpopular and ineffectual Palestinian Authority (PA) for letting such groups go unchecked.

What is the U.S. position on Palestinian statehood?

Biden has reaffirmed U.S. support for a two-state solution, calling for separate Israeli and Palestinian states with borders resembling those that existed before the 1967 war; this territory includes the Gaza Strip, the West Bank, and parts of East Jerusalem. The Clinton Parameters provided the outlines for the establishment of a Palestinian state and the resolution of the other final status issues. George W. Bush became the first U.S. president to publicly endorse a Palestinian state, which was represented in the 2003 Road Map for Peace plan put forth by the United States, the European Union, Russia, and the United Nations. The Obama administration also tried to advance a two-state solution, but talks collapsed in 2014 over disagreements on settlements, the release of Palestinian prisoners, and other issues. In 2016, Secretary Kerry outlined principles for a two-state solution based on those final status talks.

Trump’s plan, dubbed Peace to Prosperity, would have established a Palestinian state but given Israel sovereignty over an essentially undivided Jerusalem, including the Old City and the holy sites, relegating the Palestinian capital to a sliver of East Jerusalem. The plan did not grant Palestinian refugees the right to return to their former lands but promised some $50 billion worth of investment in a developing Palestinian state. The conceptual map provided in Trump’s plan suggested that the Palestinian territory in the West Bank would shrink to 70 percent as Israel annexed the Jordan Valley and all its settlements there. Critics called the plan—which was created without consulting Palestinian leaders—a win for Israel on all the major final status issues, and the PA rejected it.

Despite its long-standing support for a two-state solution, the United States has traditionally not supported Palestinian bids for statehood at the United Nations, saying this matter should only be decided through negotiations with Israel. The PA has pursued full membership for Palestine at the United Nations since 2011, a move that requires approval by the Security Council, where the United States has a veto. The PA has yet to garner enough support for the bid, but in 2012, 138 countries at the UN General Assembly voted to recognize Palestine as a nonmember observer state.

What is the U.S. position on Jerusalem?

When the UN General Assembly voted to divide British-controlled Palestine into separate Arab and Jewish states in 1947, it set aside the city of Jerusalem as a corpus separatum, or separate body, recognizing its shared religious significance for Christians, Jews, and Muslims. However, newly independent Israel established its seat of government in the western half of the city and later captured East Jerusalem from Jordan in 1967. Israel then expanded the municipal borders of Jerusalem to incorporate neighboring Palestinian towns and effectively annexed it.

As part of the 1993 Oslo Accords—the last significant agreement on the dispute—Israel and the PLO affirmed that claims to Jerusalem would only be decided in final status negotiations. Today, Israel views all of Jerusalem as its capital, while the PA claims East Jerusalem as the seat of a future Palestinian state, viewing Israel’s hold on the land as an occupation.

For decades, the United States and most other countries that have relations with Israel kept their embassies in Tel Aviv, so as not to preempt a future peace deal. Although a 1995 U.S. law [PDF] required the relocation of the American embassy to Jerusalem, successive presidents waived the requirement “to protect the national security interests of the United States.” However, Trump declined to do so in 2017, instead moving the embassy to Jerusalem and recognizing the city as Israel’s capital. Supporters of the relocation argued there was no national security imperative prohibiting the move, and that U.S. diplomatic representation to Israel ought to be based at the country’s seat of government. The announcement prompted Palestinian officials to break off relations with the Trump administration. Although President Biden has reestablished these ties, he has said the U.S. embassy will remain in Jerusalem.

In 2021, Biden announced his intention to reopen the Palestinian mission in Washington and the U.S. consulate in East Jerusalem, both of which Trump closed. But they remained closed as of mid-2022, and reopening them will be difficult: A 1987 law circumvented by Trump’s predecessors bans Palestinians from having a mission in the United States, and the Trump administration passed legislation to block future leaders from waiving the restriction. Reopening the consulate in East Jerusalem would require the Israeli government’s approval, which is unlikely.

What is the U.S. position on Israeli settlements?

Shortly after the 1967 war, Israel began building settlements in some of the territories it had seized. Settlement construction began under Labor party governments seeking to strengthen defense in parts of the West Bank that had seen heavy fighting during the Arab-Israeli wars, but it increased rapidly as some settlers viewed the land as their religious and historical right, and others found economic incentives to live there. By 2022, some seven hundred thousand Israelis were living in settlements in the West Bank and East Jerusalem.

For years, the United States officially condemned these settlements—branding them an obstacle to peace—but avoided outright calling them illegal to avoid the possibility that Israel would face international sanctions. A 1978 State Department legal opinion stated that Jewish settlements in occupied territory are not admissible under international law, yet President Ronald Reagan stated in a 1981 interview that the settlements were “ill-advised” but “not illegal.” George H.W. Bush was the first president to link the amount of aid that Israel would receive to its settlement building, deducting the cost of settlement construction from U.S. loan guarantees. However, Clinton later allowed exemptions for settlement construction in East Jerusalem and for “natural growth.” In 2004, George W. Bush wrote a letter to Israeli Prime Minister Ariel Sharon recognizing that the “new realities,” or settlements, would make it impossible for Israel to revert to pre-1967 borders in any peace agreement. Most administrations came to believe that Israel would keep its three largest settlement blocs in exchange for ceding other land to the Palestinians in any peace deal, thinking it unrealistic that Israel could force so many of its citizens to leave the settlements. While the Obama administration took actions to shield Israel from political movements that sought to penalize Israeli businesses operating in the West Bank, it also delivered a rebuke of Israel’s settlements by abstaining from a UN Security Council vote declaring the settlements illegal.

As it did with other components of the Israeli-Palestinian conflict, the Trump administration pivoted to a view of Jewish settlements that was markedly pro-Israel. In 2019, U.S. Secretary of State Mike Pompeo voiced disagreement with the 1978 State Department opinion, saying civilian settlements in the West Bank are “not, per se, inconsistent with international law,” and not an obstacle to the peace process. The announcement prompted more than one hundred members of Congress to sign a letter of disapproval.

In early 2023, Israel’s government moved to construct thousands of new settlement homes and legitimize several unauthorized outposts. The Biden administration halted a Palestinian-led UN resolution condemning the settlement expansion and assisted in brokering a deal that committed the two sides to suspending any unilateral actions.

How much U.S. aid goes to Israelis and Palestinians?

The United States has long been Israel’s ally and its leading security collaborator because the United States supports the existence of a Jewish state. During the Cold War, many U.S. defense strategists saw Israel as the best partner in the fight against Soviet influence in the Middle East, and it later proved to be a strong contributor to U.S. counterterrorism efforts.

Today, Israel remains the United States’ closest strategic partner in the Middle East. Both countries are concerned about Iran’s nuclear ambitions and its support for Islamist militants, particularly Lebanon’s Hezbollah and Hamas. As a result of these shared interests, the United States has pledged to help safeguard Israel’s military superiority over any hostile combination of countries in the region. By law, the U.S. government must ensure that any arms sales to other Middle Eastern states do not “adversely affect Israel’s qualitative military edge over military threats to Israel” [PDF].

The United States began providing Israel with military assistance after its withdrawal from Arab territories as part of the peace process. Washington considered it a responsibility to provide this security aid because Israel was taking risks for peace. The United States also gave large aid packages to Egypt and Jordan in exchange for their commitments to the peace process.

Since the end of World War II, the United States has provided more cumulative foreign aid [PDF] to Israel than it has to any other country. The United States gave Israel significant economic assistance from 1971 to 2007, but due to Israel’s considerable economic growth beginning in the 1990s, it now receives mostly military aid. More than half of all foreign military aid that President Biden requested for fiscal year 2022 was earmarked for Israel. Under a 2016 memorandum of understanding, the United States is committed to providing nearly $4 billion to Israel each year, including $500 million for missile defense. Following the 2021 Israel-Hamas conflict, it provided an additional $1 billion in missile defense funding.

The United States also provides aid [PDF] to Palestinians, mostly to support government and humanitarian programs. Aid flows were restructured in 2007, after Hamas violently broke off from the PA⁠—⁠led by the rival Fatah party⁠—and seized control of the Gaza Strip. The United States considers Hamas a terrorist organization and takes measures to prohibit it from receiving any assistance. 

The United States gave more than $6 billion in aid to the UN Palestinian refugee agency (UNRWA) between 1950 and 2018, when U.S. aid to the Palestinians began shrinking under Trump. His administration reduced assistance to the West Bank and Gaza and discontinued contributions to UNRWA. In 2019, Trump signed an antiterrorism law that allowed Americans to sue recipients of U.S. foreign aid, including the PA, over alleged complicity in acts of war. Fearing lawsuits, the PA requested that Washington cut off its aid. Though the antiterrorism law remains in effect, the Biden administration has resumed aid to the West Bank and Gaza, pledging to provide the Palestinians at least $500 million by 2024, pending congressional approval.

What are the prospects for a resolution to the conflict?

The outlook for Israeli-Palestinian negotiations is bleak, with divisions between the two sides further aggravated by the Abraham Accords, the 2021 Israel-Hamas conflict , and the escalation in violence that began in 2022, the deadliest year for Israelis and West Bank Palestinians since the second intifada ended in 2005. Furthermore, it is highly unlikely that the Palestinians will receive a package of concessions from Israel that is more favorable than those that they have rejected in the past, and political divisions between Hamas and the PA remain a challenge to any future negotiated settlement.

Experts say these dynamics have raised the prospect of a one-state solution, which some argue has already become reality. Many observers view that outcome as perilous given the possibility that, with Arabs forming at least half the population, Israel will no longer be a Jewish state. And if Israel were to deny Palestinians equal rights to remain a Jewish state, that would undermine its future as a democracy. Despite these concerns, there’s some interest in the notion of a one-state solution: In January 2023, a joint Israeli-Palestinian poll [PDF] found that 52 percent of Israel’s Arab citizens would support a shared state with equal rights for Jewish and Palestinian citizens, compared to just 20 percent of Israel’s Jewish citizens. About one in three Palestinians said they would support such a plan.