Behind the Headlines--After the Israeli Elections: A New Chapter or More of the Same?

• Introduction
• Remarks
• Questions

JOANNE MYERS: Good morning. I'm Joanne Myers, and on behalf of the Carnegie Council, I would like to thank you for joining us.

It is my pleasure to welcome Yoram Peri to this Public Affairs Program once again. Last time he was here, about six years ago, he spoke about the Israeli military, specifically the generals and their role in shaping Israel's foreign and defense policy. It was a fascinating discussion. You can read it by visiting our website at www.carnegiecouncil.org.

Today, Yoram will be taking us behind the headlines as he discusses the implications of the January elections in Israel and how the results may impact the Israeli political landscape, both domestically and in terms of Israel's foreign policy. When voters went to the polls last month, pundits were predicting a rather uninteresting, ho-hum election. But the results were anything but. While Benjamin Netanyahu won reelection as prime minister, he did less well than anticipated, and the center did much better than expected, leaving him weakened, without a clear path towards forming a coalition.

How Israelis voted tells us a great deal, not only about Israelis themselves and what they care about, but, from an American perspective, it was curious that both the status of the peace talks and the issue of Iran were not as prominent as imagined. In contrast, socioeconomic, religion, and state issues played a larger role in the campaign.

The clear message, as Netanyahu reported the next morning, was that the public wants him to form a government that will bring about great internal change. He will now need a broad coalition to do so, and the deadline for forming one is just days before President Obama is scheduled to arrive there on March 20. It will be interesting, as one wonders whether Netanyahu can provide the changes needed to benefit all citizens and to honor the vow he made to make a serious attempt to reach peace under this new government.

While domestic change seems to be the rallying point, those living outside of Israel are more concerned with whether Israel will reenergize the peace process with the Palestinians or how they will react to the nuclear buildup in Iran. To that end, we may have some indication, as on Tuesday, Netanyahu added his first coalition partner, former foreign minister Tzipi Livni, who as justice minister will be in charge of peace negotiations with the Palestinians in what could signal a new approach to peacekeeping, as she favors a softer line than Netanyahu.

While no doubt there are many pundits who could talk about the Israeli election results, in my opinion there are very few who have the keen observations of a journalist, the real-world experience of a political advisor, and the insights and analytical ability of an academic. Yoram Peri has all these and more. The skills just mentioned, combined with innate good judgment, will provide the acumen we need to go behind the headlines of Israeli election results and enrich our understanding of this modern country living in its very dangerous neighborhood.

Please join me in giving a warm welcome to our guest today, Yoram Peri. Thank you for joining us.

YORAM PERI: Thank you, Joanne. Thank you for inviting me. I don't think there is a better way to flatter a speaker than to invite him once again. I'm waiting for the third invitation—less than six years. I'm sure there will be very many dramatic events in the Middle East, so there will be topics to talk about.

The elections in Israel were quite interesting, mainly because of the dramatic difference between the expectations and the results. Political scientists distinguish between three major sorts of elections: critical ones, persevering ones, and reinforcing.

The critical are the ones that are a watershed. These are elections that have longstanding realignment. In the history of Israel, we had only one such election, in 1977, when the Labor Party lost power after being in power for 44 years. It started designing institutions and organizations in 1933 and lost power in 1977, and the Likud took over then. So these were really critical elections.

By the way, the Labor Party then had a world record of being in power in a democracy—44 years. Second came the Social Democrats of Sweden, who were in power for 40 years.

Everybody was expecting elections that would be reinforcing; namely, that the processes that we saw in Israel in the last decade would continue and would make major change, dramatic change, in the public scenery, because of two reasons: one, because of the demographic changes—more young, religious, ultra-Orthodox kids are born; and the former Soviet Union immigrants' input in Israeli society. So it's a demographic change and an ideological change, a shift towards the right and a shift towards what we describe in the journal that we are now publishing in my institute, The Israel Studies Review, as "religionization" of Israel. More people are becoming orthodox, accepting religious perceptions, looking at religion as a major factor in their lives. I will describe that in a minute.

Because of these two trends, demographic and ideological, everybody expected Netanyahu to win by far. His coalition, which had the religious parties and the right of center—in general, we call that the right wing bloc—had 61 seats in the Knesset out of 120. The public opinion said he would get more—even 71, compared to 49 that the center-left will receive in the elections.

So everybody was sure that it would be a reinforcing election. And it didn't happen. The Likud, the right-wing religious bloc, went down from 64 to 61 seats in the Knesset.

Why did it happen? Everybody was surprised. Politicians, academics, the public, and the public opinion research institutes—all of them envisaged a great success. What they did not do is look into a very interesting public opinion poll that asked a question that has nothing to do with politics. The question was: "From whom would you buy a secondhand car?" Netanyahu got 21 percent. Had they looked at this figure, they would have realized that this is what they would get in the election, which is more or less what he got.

So next time when you look into public opinion polls on elections, don't look at the question "Whom are you going to vote for?" Look for another question.

What did happen? Why did Israel not move dramatically to the right? Something did occur. Within the right wing bloc, these tendencies did happen. We saw that in very many fields. For example, in the primaries within the Likud Party, the moderate members of the party were not elected anymore. They were kicked out—Meridor and others. The right wing within the party took over. So within the Likud Party, that happened.

It happened within the Likud bloc as well. You see more extreme right wing leaders within the bloc. You see, for example, a growing number—a dramatic number—of settlers. Today there are 12 settlers in the Knesset. There were very few before that. On the other hand, for the first time in the history of Israel, the first time in the history of Israel even before the state was established, there is not one kibbutznik in the Knesset. The number of kibbutz members in the first Knesset in 1948 was 26. It went down, and this time is the first time you don't have any kibbutzniks in the Knesset.

On the other hand, the religious tendency that I spoke about is manifested in the Knesset, as well. For the first time in the history of the Knesset, we have a third of the members—39 people—who wear a yarmulke, religious people. So within the right-wing bloc, you do see that move to the right—more religious, more right wingers. And some of them are really extreme people.

So you do see that trend, which is not positive for any progressive eyes. But what is very positive is that the trend overall did not occur. The results of the election show that the balance of power between the two blocs remained as it is and the conflict over the soul of Israel continues. It's not over. In the last two, three years, there were very many people who lamented that Israel is losing its moral basis. It has not. The conflict is still there.

On the other hand, the left suffered terribly. That is because of three reasons:

• One, because it doesn't have leadership. You have two new leaders—very new, a few years old in politics. Both were journalists, no public experience. You have too many small parties on the left. You don't have a real leader the way that the left had in the past.

• Second, the left—when I say the left, I mean both the center and the left, because Lapid, from the Yesh Atid party, is a centrist. He is not a leftist. I include him in the left. They do not have a consensus on two major issues. One is the question of the territories, the Palestinians, peace, war, which I will describe the way Israelis would describe it, as a political question. They have two opposing approaches to it.

The second issue that they are divided on is the social and economic. Some of them are social democrats, like Shelly Yachimovich, the leader of the Labor Party. Some are neoliberals, like Netanyahu. Lapid is like that. So they don't have a common denominator.

• There's a constitutional problem with the left. That is that the left includes about 10 percent of Arab members of Knesset. Usually they get between 10 and 12 seats out of 120. They have three parties. They fight each other all the time. That's one of the major mistakes. They don't represent their constituency so well. In general, they could be part of the left, and thus equal citizens. But from a sociological point of view, they are "the other." They are not legitimate to form a coalition. The only time when the Arab parties were considered legitimate was a short period of time, the second term of Rabin as prime minister. He included them in his coalition. It doesn't happen now. It won't happen in the near future.

So the left automatically is losing 10 seats out of the 59 that it has. Therefore—inside split, weak leadership, the Arabs are excluded—the left will not be able to get to power.

But as I said, the balance between the left and right has remained as it is, or even some improvement to the left.

So what did happen in the elections? That's something that people didn't realize before the elections and, some people, after the elections. Particularly foreign journalists who covered the elections and covered the results said, "Well, now, with the results of the elections, Israel will start negotiating the peace treaty with the Palestinians once again." That's not the issue. Only one member spoke about that during the elections, Tzipi Livni. She spoke so well about it that she got only six seats in the Knesset.

That was not the issue at all. In public opinion polls, the political—I'm describing that as a political issue—was fourth in the priority list. The other three were domestic issues, social issues, and economic issues. If public opinion is not good enough, look at the posts in the social media. There, only 24 percent of the posts were on the political issue and 76 were on other issues, domestic questions, which are economy, distribution of wealth, the role of the ultra-religious community in the Israeli society, that sort of thing. The issue of peace, war, negotiations, West Bank, territories was marginal, was absolutely marginal.

It doesn't mean that the Israelis do not believe in peace or they don't want to make compromises for peace, and to pay a high price. Almost 70 percent of the Israelis are willing to see territorial compromise and to reach peace. But the same 70 percent say there will be no peace in our lifetime.

The disappointment from the Oslo period, the disappointment from the developments in the Arab world, the disappointment from the behavior of the Palestinian leadership brings the Israelis to conclude that there is no partner. If there is no partner, why should we waste our time? There are other issues that we have to deal with.

Unfortunately, we have a mirror picture with the Palestinians, who look at the Israelis and say, "Well, look at what happened in Israel. There are no partners. Why should we negotiate?"

Therefore, they don't negotiate. They talk about negotiations. Therefore, I'm not very optimistic about the fact that Tzipi Livni will now lead the Israeli delegation to negotiate with the Palestinians, because the basic perception is that there is no partner. You really need major change to shake perceptions both within the Israeli community and the Palestinian community.

So if the topics were social and economic, what was the impact of that? Here we have to go, not to the Arab Spring, but to the Israeli Spring, the summer of 2011, when hundreds of thousands of young Israelis went to the streets, stayed overnight in the tents on the major boulevard of Tel Aviv and other cities, and then conducted the largest demonstration ever in Israel, to discuss these social and economic issues. It all started with the price of cottage cheese. Cottage cheese is a white cheese that is the most popular cheese in Israel. When the dairy company, Tnuva, raised the price too much, that couldn't be accepted by the young Israelis, and they started demonstrating.

But it wasn't only the cottage cheese. The other issue was the cost of living and cost of houses or apartments in Tel Aviv. So it was major issues of the way of life, economy. "Cost of living" is the most general description. There were few very concrete demands.

The second issue was the attitude of the state towards the ultra-Orthodox. The Orthodox in Israel are lucky that they don't have to serve in the military if they study in the religious college, in the yeshiva. It started in 1948, when Ben-Gurion thought that Israel should honor the yeshiva that were destroyed during the Second World War in Europe, and therefore the state should encourage people to study in a yeshiva.

But then there were 700 of them. When Begin became prime minister in 1977, he opened the door much wider, and there were a few thousand. Today, all in all, there are 60,000 people who study in the yeshiva, who get a subsidy from the state, who do not serve in the military.

So the young secular Israelis say, "Why should I spend three years of my life in the military, in addition to wars that I have to participate in, and my next-door neighbor will study in the yeshiva and get a subsidy from the state? That's not fair."

The issue became even more problematic because as long as they study in the yeshiva, they don't work. So the rate of the Israeli workforce is lower than the average Organisation for Economic Co-operation and Development workforce because of these thousands of yeshiva students and, interestingly enough, because of the Palestinian-Israeli or Israeli-Arab women. A very low number of them work. These are the two major communities within Israeli society that move down the number of Israelis who go out to work. But as I said, the Israeli Arabs are seen as "the other." It doesn't bother so much the young Israeli secular who has to serve three years in the military. His next-door neighbor who studies in the yeshiva instead of working does irritate him.

Therefore, the major topic for Lapid to establish in his party and the first item on his agenda when he met with Netanyahu and discussed the coalition was how to solve the problem of the students in the yeshivas. It was that and it was other social and economic issues.

Netanyahu is a very shrewd politician. He immediately established a wonderful committee, led by an economist, Professor Trajtenberg. In two months, he had a wonderful set of recommendations, a great book. The government adopted all of it. And nothing happened after that. The fact that you adopt it doesn't mean that you have to practice it. You adopt it.

They did adopt one thing. They lowered the level of kindergarten, free kindergarten, from the third year. So that was a change. But the rest did not.

At the same time, the social protests declined, because they thought that everything would be better now. Well, it didn't become better. Therefore, you saw the reaction in the elections. The dramatic change in the elections is not the move from left to right or from right to left, but it's a move of the younger generation against the establishment, the younger generation against the traditional politicians, the younger generation against the traditional parties. What you see in the new Knesset is really a presentation of this generational upheaval—a beautiful democratic generational upheaval.

There are more young people in the Knesset today than in any of the 18 Knessets since the establishment of the state. There are three student leaders there. There are more women than ever—not enough; only 27, it should be more. There are nine journalists (an interesting observation—why journalists are so popular today, more than anybody else), fewer generals. In the past, every election, there were a few more former generals, retired generals, who moved into the Knesset. This time, no one new, but nine journalists. It's a wonderful face that the Israeli Knesset has. It really shows that the revolt of the summer of 2011 did have an impact on Israeli society.

The question, of course, is whether they will deal only with the issues that were discussed during that summer or since that summer. The parties that won the elections were the parties that adopted the platform of this young generation, social and economic issues, not the Palestinians, not peace.

Netanyahu didn't say the word "peace" during the entire election campaign. He didn't utter that word one time. In his speech in the Knesset after the elections—and he has very good censors—he used the word four times. So he realized that now we have to talk about it. But let's just talk about it. That's the important thing. But to do something? That's not on the agenda of the Israelis, as I said earlier.

So the question is whether this very positive phenomenon, the fact that more young Israelis move into politics, the fact that you see a real movement from civil society, which was always very active and dynamic in Israel, into the political level—that was the major question that I asked myself when I went to Israel in the summer of 2011 and I spent several nights talking to them. I was very impressed with them. I didn't like the fact that they don't talk about the political issue, but I saw how active they are and how strongly they want to be involved in public life. But the question that didn't have an answer was whether they will stay in civil society, where there are many, many organizations—wonderful things have been done—or whether they will climb up and get into the political level.

The Green Party in Germany, for example—it took them 10 years to move from civil society to the political echelon. I thought that it would take these young kids five, six, seven years. I didn't expect it within two years. It did happen.

The number of young Israeli voters climbed up. In general, the number of voters climbed up. While in the entire world, turnout is going down, in Israel, this trend has reversed. Israel always had a very high level of political participation. In 1999, it was 79 percent and it fell down to 65 percent in 2009. Now it went up again to 67 percent.

So you see more democratization, more willingness to take part in shaping the public space and shaping Israel's future. You see young people, new perspectives, new approaches. You see very wonderful, positive developments. And yet the elephant at the center of the room is unclear: What is going to happen to the political issue, to the issue of the Palestinians, the West Bank, territories, peace, war?

Unfortunately, the developments in the periphery as well are not very encouraging. The present minister of defense, Barak, said a few days ago that if Assad will fall, it will create a shockwave that the Middle East has not witnessed since the fall of the Ottoman Empire. Usually he doesn't exaggerate, that guy. He has some other problems, but he doesn't exaggerate.

So we live in a very unstable situation. Whether that will encourage more Israelis and the younger generation to be more active and to push forward those negotiations, I'm not sure. I'm afraid that is not high on their agenda.

There are some other developments which took place during the elections. There is a decline of parties. That's an interesting phenomenon.We still talk about parties in Israel. But, in a way, we use the wrong word. Many of the parties are not really parties. There are lists of candidates for the Knesset that were decided by one person. Tzipi Livni, for example, decided who is going to be on her list and she wrote down names of people. Yair Lapid decided himself who is going to be on his list. They are called parties. But I understand that with parties, you have members of parties, you have annual conferences, you have elections, you have primaries, you discuss the manifesto, the platform. These are not parties.

So there's a privatization of politics, and it's not very healthy, because individuals play their own game. Therefore, you can see people moving from one party to another, forming parties, dissolving parties. Before these elections, there were more movements of members of Knesset from one party to another than in the history of Israel. One day you find yourself in one party; the next day, the leader of your party left and you don't know whether you should go with him or not. He's not the leader anymore.

The worst thing was with Mr. Mofaz. He was a member of the Likud Party. When Sharon established Kadima before the previous elections, he asked Mofaz to join him. In the evening, Mofaz said, "The Likud is not only my party; the Likud is my home, and one does not leave home." The next morning, he moved to Kadima. The poor guy joined Netanyahu's cabinet a few months ago, and after two months, he left the cabinet. No wonder that he almost was not elected in these elections. He was very much below the threshold, which is 2 percent, and only in the last seconds, when they counted the votes and they tried to find a few more votes, he was lucky to cross the threshold. He has two seats, he and somebody else.

Now, the fact that he has two seats out of 120 doesn't mean that he is not a very heavyweight person. I'm sure that Netanyahu will buy him easily, maybe even give him the position of defense minister, because he comes from this experience and he was already in the past in these positions. So here is a guy, two seats—namely, people don't trust him—and he, because of this coalition structure, might get a very important position within the new government.

To close up, Netanyahu is now negotiating elections. Don't believe any word you read in the newspapers during the next two weeks. All is spin. Everything is spin. He, I guess, will establish a coalition in which, like any other prime minister in Israel always prefers, the prime minister will be in the center. He would like to have a left-wing flank and a right-wing flank so he can manipulate the two, play between the two, and stay in the center. That's the traditional approach of Israel's prime ministers.

The question is how wide it will be. It will be easy to establish a coalition with 61 or 63, but Israeli prime ministers prefer to have 72, 73, 74, and if it's larger, even better. Unfortunately, the public opinion thinks that the national unity coalitions are good ones because it shows the support of the people. That's a total mistake. It's a misunderstanding of politics. If you have a wider coalition, it's a stalemate coalition. You keep, on one hand, those who are willing to give back everything that the Palestinians want, just to make peace, and others who say, "God gave the land to us and we are not going to give an inch." Both of them are sitting in the cabinet.

In the Knesset, that's fine. This is the place where you air positions. But the cabinet has to have a clear policy. The wider the coalition is, the weaker it is, the less it is possible to devise policies.

But because the Israelis have been under war for 100 years, they want to see unity and they want to see their leaders united. If they sit around the cabinet desk, it means they are united.

Netanyahu is very good at bringing people into the cabinet. His previous coalition had the largest cabinet ever, 39 ministers—such a huge coalition that they had to rebuild the desk of the cabinet in the Knesset to add more seats and to make the seats more tiny.

One of the first demands of Lapid is to go back to the principle that was written down in the Basic Laws of Israel, which is like a constitution, that the cabinet will have only 18 ministers. If it will be less than 25, I'm inviting you all for free lunch here.

Thank you.

JOANNE MYERS: That was just wonderful. I think you gave us a wonderful insight into Israeli politics. But there's just one issue you didn't mention—Iranian ambitions, nuclear ambitions, and how that's going to impact in any way. You talked about the peace process, but not that.

YORAM PERI: It wasn't the major topic on the elections. That's quite interesting. The Iranian issue dominated the Israeli discourse for the last two years. During the election campaign, no Iran, no nuclear weapon, no threat, nothing.

Now it is beginning to be on the agenda once again. I think it wasn't on the agenda because there isn't a very deep division within Israel on how to see the problem. The majority of the Israelis believe that the Iranians are building their nuclear military capability, will continue to do so, that they negotiate only to earn time to do that, that the Americans are naïve when they think they can negotiate with them and reach an agreement. The majority of the Israelis believe that Iran should not have a nuclear capability.

The only question that was, some months ago, open was whether Israel should attack unilaterally or not. There was a division of opinion about that. With the clear position of the American administration, the Israelis understood that they cannot do it alone. They have to have legitimacy and they have to have cooperation with the United States. Therefore, that debate has declined a little.

So I would say that the probability for a unilateral act by the Israelis went down dramatically, and with this new coalition, a new atmosphere, even more so. It doesn't mean the Israelis are not worried. I'm sure that that will occupy 80 percent of the time of Netanyahu and President Obama when they meet. But there's more understanding by the majority of the Israelis that Israel cannot do it on its own.

Yet, if you look at the history of Israel, from time to time Israel has decided, when it's really a serious matter, an existential issue, to do it alone, even when it puts them in confrontation with the administration.

QUESTION: Warren Hoge, International Peace Institute.

Yoram, that was a fascinating analysis. I was particularly intrigued by your comment about young Israelis being more active, but still being in civil society and not having moved into politics.

I would ask you about that, but I'm haunted by something else that I wanted to ask you about. It is, to my mind, existential when you talk about Israel. That's the two-state solution. I worry about the lack of progress and the lack of enthusiasm for it and indications that the prime minister doesn't, I think, consider it as seriously as he ought to.

Here's the thing that haunts me, and this is an obvious formula that you are very familiar with: Given the demographics in Israel over the next 20 or 30 years, if it is left the way it is right now, and absent a second state, the state of Israel will no longer be able to call itself the Jewish state and will no longer be able to call itself a democracy.

Am I overstating? Am I too worried about that or is that a concern that's on the minds of Israelis as well?

YORAM PERI: You're not overstating it at all. That's the question that the Israelis discuss. That's the question. That's the topic. There are very many Israelis who believe that God gave the land to us, not to the Palestinians, or that Israel needs the territories for security reasons, for strategic reasons, or any other reason why they should support a one-state solution and should be firm on negotiations. They believe that we have to compromise because of that question, which is described as the demographic question. That's the question. The question of whether we are deteriorating into a one-state solution does occupy the minds of many Israelis.

But the right wing or nationalists or clerical have answers to that. One, they say, "Who told you that the numbers of the Palestinians are the correct numbers?" There's a guy, Yoram Ettinger, who was an Israeli counselor in Atlanta, who has a think tank, and he argues that these are false figures, that there are fewer Palestinians than what you think. He goes up and down the country, both here and there, and describes his position.

Second, people will say that with education and improving economic conditions, the number of kids is going down. The Palestinian community is having fewer kids. The Israeli seculars are now having three kids per family, while 20 years ago, they had only 2.1, 2.3.

Third, they will say some of them would prefer to leave, and besides, as we say in Hebrew, "Elohim gadol," "God is great."

It boils down to the question: Does time work for us or against us? Those who believe that time works for us—and there are some—will say, "Don't worry. We went through the Pharaoh, we went through Haman, we went through the Holocaust. We'll win here as well."

Those who believe that time does not work for us—I belong to that school of thought—think that we have to do something as soon as possible, that it's an urgent issue, because if there will be more Israeli settlers on the West Bank, in 10 or 15 years, that will be the end of the two-state solution. Today you can still solve the problem with two states.

QUESTION: Don Simmons.

Just to follow that question, what do the latest public opinion polls show about the Israeli public's attitude on three issues: Should there be a Palestinian state? Should East Jerusalem be permitted to be its capital? And should land occupied by Israeli settlers be restored to the Palestinian state?

YORAM PERI: As I said earlier, the majority of the Israelis have—if I can use one word to make it shorter—dovish positions. They are willing to withdraw from territories. They are willing to stop new settlements. They are willing to see East Jerusalem, or the areas in Jerusalem that are occupied by Palestinians, as the Palestinian part of Jerusalem.

But the same majority does not believe that there is a partner to negotiate with. Therefore, they say, "Well, we'll wait until there will be a partner." This is, to my mind, a mistake. You cannot sit aside thinking that things will not happen. If you don't do anything, things happen. So better to influence what is going to happen, by taking active steps.

But that's the position of the majority of the Israelis. And you can understand why particularly the younger generation feels this way. Look, their political socialization took place during the first decade of the 21st century. What did they see? The collapse of the negotiations in the year 2000; the collapse of the Oslo agreement; the Israeli withdrawal from Lebanon, which everybody thought would bring quiet, if not peace, to the northern side of Israel; attacks by Hezbollah; the withdrawal of Israeli forces and dismantlement of settlements in Gaza, which brought attacks by Hamas in Israel; the Second Intifada and the suicidal terrorists who blew up buses and cafés and the cafeteria in the university in Jerusalem, et cetera.

So these million people say, "What are you talking about when you talk to me about peace? What peace? Should I give back the West Bank, and they will start firing at the only international airport that we have, which is three miles from the line? With whom should we talk?"

You can understand how they developed that position. It's a wrong approach, but I can understand why they don't trust. It's a matter of trust. You have to break this mistrust.

President Sadat was capable to do that, when he came to the Knesset and spoke to the Israeli people. A few weeks before he came, by accident, there was a public opinion poll and people were asked, "Are you for seeing peace with Egypt in the near future?" Eighty-odd percent said no. He came to Israel. The same public opinion pollster, cleverly enough, asked the same question, and there were almost 80 percent who said yes—a visit to the Knesset.

We hoped that Assad would do that. Now we don't want him. At least I don't want him.

QUESTION: Thank you. Arlette Laurent.

Professor, can you compare the standard of living in the occupied territories—the average standard of living—with that in the rest of Israel?

YORAM PERI: It depends if you want to criticize Israel or praise Israel. If you want to criticize Israel, you'll say, "Oh, it's much lower than in Israel." If you want to praise Israel, you'll say, "Look at the fantastic, dramatic increase of the Palestinian population on the West Bank compared to other Arab states."

The same applies to the Israeli Arabs. If you want to criticize Israel, you will say, "Look, the Israeli Arabs, not the Palestinians on the West Bank, the Palestinian citizens of Israel, they are occupying the lower echelons of Israeli society from an economic point of view. That's terrible. There is a gap between the Jews and the Arabs."

But if you want to look at the history from 1948 on and see the changes that took place within the two societies, Jewish and Arab, the Arab went up dramatically, much faster than the Jews, and they are very close to the Jewish position—still below the Jews, but they are much above what they used to be.

So it depends how you want to look at it. I prefer to look at it in a positive way, for some odd reasons.

QUESTION: Susan Gitelson.

On the question of the ultra-Orthodox, one of the reasons they have had such a privileged position for so long is because their parties have been in the coalition. What do you think is going to happen that might shift the balance so that they will be encouraged to work more?

Second, President Obama is about to visit Israel. So many of the editorials and public opinion here says, "Oh, the Americans should restart the peace process." From what you've been saying, this is not exactly what's on the Israelis' minds. What do you think is going to happen when Obama reaches Netanyahu?

YORAM PERI: Two questions. For each one of them, we need at least 15 minutes, if not more.

On the first one, there is more and more understanding by the ultra-Orthodox themselves that things cannot continue as they are, first, because of economic reasons. They live, really, in poverty, because they get the subsidy for the husband to study in the college, and his wife has to go and work, besides raising seven or eight or nine kids. So they suffer as well. There is a tendency, particularly from the women, in this community to change the situation.

Second, there is so much resentment by the majority of the Israelis that they understand that something has to be done about it.

What will happen now is a sort of compromise. We'll see what sort of coalition Netanyahu creates. There is strong pressure on him not to include the ultra-Orthodox in the coalition. If he doesn't include them, then the religious parties can take harsher measures against them.

Netanyahu did it when he was the finance minister, by a very simple move: He reduced the level of child allowances. That's all. Immediately it brought a change. It takes some time to change the number of kids you have, but more of them went out to work because they didn't get these allowances. So there are ways to control it.

The problem is that the ultra-Orthodox and the Orthodox parties in the past used to give the prime minister a free hand in the political issue, as long as he supported them on their field of interest—namely, their communities, subsidies, education, et cetera. It's much easier for Netanyahu to have them as partners in the coalition. He would love to have them. It depends on what will be the pressure from the left wing flank of the new, unborn coalition, how strong it will be.

What you should watch is to see whether he will take them into his coalition. If he takes them into the coalition, there won't be much difference in the future than in the past. If he won't take them, that means that something dramatic can change. The probability is lower. I would give more probability that he will take them, they will be in the coalition, and they will find some steps to decrease the number of students and to make it easier for them to go to work, recruit more of them to the military—not thousands, but a few more—to limit a little bit the number of students. It will be a typical Jewish compromise.

The question about the administration: The problem is that both the Israelis and the Palestinians cannot solve the problem on their own. They have been intertwined for a hundred years, from the beginning of the 20th century. Every decade, there was at least one war—1926, 1929, 1936, 1939, 1948, 1956, 1967. Every decade there was a war. They cannot solve the problem.

As I told you earlier, you need a strong uncle, a wise uncle, to put the two kids together, to hit them a little, to give them some cookies, and to tell them, "Solve it."

Now, to be more academic, why did Israel achieve peace with Egypt? Because the conflict was seen by the Israelis and the Egyptians as a zero-sum game. If I make peace with Egypt—I, the Israeli —I'm losing Sinai. So why should I make peace with Egypt? For the Egyptian, if I make peace with Israel, I get Sinai, but I recognize Israel. That's a too-high price.

You need both sides to get more incentives to make peace. This is what the Americans did. This is what Kissinger did. He told the Israelis, "Not only will you get peace with Egypt, you'll get $4 billion a year, $2 billion for military purposes, $2 billion for civil purposes." Later on, it was only $2 billion for military, which still remains.

The same applied to the Egyptians. "Not only do you get back Sinai. True, you make peace with Israel. A terrible thing to do. Don't do it. But you get Sinai and you get $2 billion a year. Do it."

So what Kissinger did changed the zero-sum game equation to a non-zero-sum game.

Only the uncle who has the stick and the carrot—the carrot is better than the stick—can do it. Therefore, the Europeans are negligible in these negotiations. You need a proactive position by the American administration. I thought President Obama would do it in the first term, but, unfortunately, he made major mistakes in the first two years. The question of whether he will be more engaged now or not is still an open question. You see indications to both directions. So it remains to be seen.

QUESTION: James Starkman. Thank you so much for such an informative talk.

Getting back to your quotation of Ehud Barak, and even setting aside the Palestinian issue, setting aside the Iranian issue, what is your perception of the young leadership generation's view of the existential threat in the Syrian situation and in the Egyptian situation particularly? What do they feel should be the foreign policy? It has been sort of to sit back and watch developments. But what is your sense of the younger generation's view of what should be done with regard to that particular existential threat?

YORAM PERI: Being very Westernized, being part of the world of globalization, high tech, the modern world, they are, of course, for democracy. They all wish and pray that democracy will reach the Arab nations and the Arab states. The two leaders of the two parties that won the election, both on the left and on the right, are these types of people. Bennett, the leader of the right-wing party, is a hawk, but he's a very modern guy. He came from the high tech business. He represents very many Western values.

The majority of the young Israelis would support democratization of the Arab world. Unfortunately, they don't have trust with this process. They fear that the Arab world is going into not only turmoil, but increased power of the religious groups. In the year 2013, I think there were going to be 10 elections in the Arab world. In each one of them that happened already, you saw increased power to the religious Islamists. Just yesterday I was told by someone who came from Egypt that the Salafists are getting much stronger than they used to be, that they see the Muslim Brotherhood as too wimpy, too soft, too wet—they are not strong enough; they should be stronger.

The tradition of Israelis, including the younger generation—I'm reminding you of what I said about the political socialization during that 10 years—is to wish for the best, but be prepared for the worst. The worst is a really serious matter. If Syria is going to dismantle, God knows what's going to happen there. It's going to be a failed state with six or seven different semi-independent or independent regions, people fighting each other.

The Iranians are now building strong power within Syria. The Iranian general who was killed by accident when Israel attacked the Syrian convoy into Lebanon—he was killed by incident—pretended to be the guy who came to Lebanon to help them rebuild some of the neighborhoods of Beirut. But the reason he went there was to establish a strong military power within Syria, built on volunteers, militia, and the Hezbollah people, and to have thousands of people, if the regime falls and they will have to fight for their interests, the Iranian interests. So Iran is going to be involved in Syria, five minutes from Haifa.

Who knows what will happen to the regime in Jordan? King Abdullah II has now opposition from his own Bedouin clans, which he never had in the past.

The regime in Saudi Arabia—there are doubts about the strength of the regime there.

So the whole region is such in flux that most Israelis look at it as a threat rather than as an opportunity. They wish things will be different. They don't want to be involved. They want to wait and see.

I don't like en principe the position of wait-and-see. I like to be proactive, and I believe that we can do things. But it's not so simple.

QUESTION: Allen Young.

Traditionally, the military and national security establishment in most countries tends to be very hawkish. That does not appear to be the case in Israel. So many people from the national security establishment have criticized the idea of attacking the Iranian nuclear facilities, and most recently, this movie, The Gatekeepers, which is up for an Academy Award, had six leaders of Shin Bet who criticized the militarization of Israel.

To what do you attribute this dovish attitude on the part of the national security establishment in Israel?

YORAM PERI: The best thing to do is to send you to the three books that I wrote on that. My Ph.D. thesis, which I wrote for London School of Economics in 1982, was on the political role of the military. Then I published a book called Between Battles and Ballots: Israeli Military in Politics. The last one was six years ago when I wrote Generals in the Cabinet Room: How the Military Shapes Israeli Policy [Editor's Note: Yoram Peri gave a talk at Carnegie Council on this book in 2006].

I saw another book that was published a few months ago in which the author argued that the military's powerful position in Israel made Israeli international policies more hawkish. A total mistake. That's wrong. The Israeli military is pluralistic in its approach. The people who are more influential are the doves rather than the hawks. So it's not a new phenomenon.

It has to do with many reasons which we won't have time now to talk about. One point that I can raise is that they know reality. You see that in the new movie, which I recommend to you to see. It's unbelievable. I wish the United States would be such a democratic state that the leaders of the CIA, FBI, and others will say, "We were wrong and our leaders were terrible leaders. They are wrong. We should do something else."

One of them, Peri—no family ties—said, "When you see reality, when you end the years of work and you think back, you naturally become leftist a bit."

They know reality. They are pragmatic. They are not ideological. And that's probably the point. The Israeli military is very pragmatic. They don't come from an ideological point of view. So they see reality, while the Israelis, both on the extreme left and the right, come from an ideological point of view, and if reality doesn't fit, the hell with reality.

QUESTION: Thank you very much for a fascinating presentation, Mr. Peri.

Efi Chalamish, from New York, originally from Israel.

You raised the question during your presentation of why we have so many journalists now in the Knesset. One theory, of course, is that global journalism is in crisis, so you have more jobs in politics. However, if you want to think about it a little bit more seriously, some people would say that the future of independent media in Israel is in question, so people have the feeling that they can have a bigger impact in politics than in the media.

My question to you is, based on your presentation, what is the future of independent media in Israel and its ability to impact policy on so many important issues?

YORAM PERI: That's a very disturbing issue, a very disturbing issue. Israel had tens of newspapers in the past, excellent newspapers, including the one that I edited. But they don't exist anymore. You have now independent papers that are really the industry. Their approach is how to make money. Things have deteriorated in the last six, seven years, when Sheldon Adelson put money to establish a new newspaper in Israel called Israel HaYom, "Israel Today," which is a free newspaper. It has the largest distribution. Of course, if you have a deep pocket, you can print as much as you want and to give it free.

The problem is, when he did that, the other newspapers, two major tabloids, Maariv and Yedioth, lost readership and, more than that, lost ads. So they are in danger. Maariv will close down eventually—another six months, another year to close down. Yedioth, which was a real empire, fought against Israel HaYom.

Israel HaYom was built to make Netanyahu prime minister and to keep him in power—as simple as that. So Yedioth Ahronoth fighting Israel HaYom, is fighting against Netanyahu, because Sheldon Adelson is his best contributor.

So instead of having a serious, independent, professional approach to journalism, Yedioth Ahronoth is playing a political—namely, economic—game. The whole field deteriorated.

In addition to that, of course, you have the problem that all the printed media in the world has, namely that more and more people read newspapers, if at all, online. So there's a transfer of money from advertising in the newspapers to the Internet, and that caused a serious problem in Israel.

The only newspaper that is still alive and kicking is Haaretz, which I'm sure some of you read in English. But they have problems as well, serious problems: They do not reflect the position of the Israelis. They reflect the position of 20 percent of the Israelis, on the left. An excellent newspaper, fantastic newspaper —it can compete easily with The New York Times—but does not reflect the position of the Israelis. Therefore, it is hated by the majority of the Israelis—"You tell all the terrible stories about us. Why do you do that? You don't show our weakness in the world." It is really in a very different position.

And—the way capitalism works is never understood—it gets a lot of revenues from printing Israel HaYom of Adelson, who would like to see this newspaper hanged with its editor in the center of town. Yet they print the newspaper. What happens if tomorrow he will decide not to print his paper in Haaretz's presses? Who knows?

So there is a problem. It's a world problem, and on top of that, you have Israeli problems, which make Israeli journalism in a danger.

Luckily, there's a new phenomenon—unbelievable. The last two, three years, you saw not only this movie that you mentioned; you have three other movies, all of which are documentaries done by young Israelis dealing with the major issues of Israel—namely, the West Bank, Palestinians, war, peace—in a critical approach. They serve the society better than newspapers.

In a healthy society, in a critical society, you find other avenues to express your positions.

JOANNE MYERS: As the designated gatekeeper for taking us behind the headlines, I promise to invite you back, and not wait six years. Thank you for a wonderful discussion.