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  • Print publication year: 2010
  • Online publication date: June 2012

Seven - Israel and the Palestinians


This chapter examines the costs of building, maintaining, and guarding Israeli settlements in the West Bank and other territories that Israel occupied in 1967. It then looks at how Israel’s relations with the Palestinians have affected the economy.


In the June 1967 Six Day War, Israel occupied the Golan Heights, the West Bank, the Gaza Strip, and the Sinai Peninsula. Soon after, it began to build the first settlements for Jews in those areas. At the end of 1967, the head of the Ministerial Committee for Settlements, Yigal Allon, began to plan the state’s settlement map that envisaged the establishment of Jewish settlements in the eastern part of the West Bank. The aim was to create a security border along the Jordan River valley on the eastern slopes of the West Bank hill ridge, over which Israel would retain rule. The hills of the West Bank with its cities would be returned to Jordan in the framework of a peace treaty whereas 40 percent of the West Bank would remain under Israeli sovereignty. An Israeli civilian presence in the Jordan Valley was in accordance with the security ideology that was in the Allon Plan. A number of settlements were also constructed in the Gaza Strip.

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