In a war to repel aggression, Israel should require unconditional surrender, a bit of age-old wisdom lost on Israeli politicians who repeat the WWI error of leaving humiliated enemy to re-arm. Israeli habit of settling for an armistice is supremely damaging and costly. Armies love victory; indecision is demoralizing.
Israel must occupy the capitals of enemy states. To avoid loss of Israeli personnel, that should be carried out in two stages. The first is the aerial destruction of economically significant objects and the devastation of the capital itself by Israel Defense Forces. Enemy civilian losses should be ignored, since the Arabs willingly participated in the war with Israel by accepting and supporting their governments. Second, Israel should a local collaborative government, supported by a few Israeli mechanized ground troops and the threat of further air assault. Its aim should be to exact for Israel reparations in oil. Israel need not guard the whole country, as the Americans do in Iraq, just the oil wells and pipelines. After some years of humiliation, Israel might agree to local elections based on a constitution prohibiting major military development, much as the United States did in post-World War II Japan. Given how poor the Arabs would be without oil, Israel would have enough power to enforce her demands.
Should conquered lands and revenues be restored at all, or should Israel annexed them? Victorious nations do not usually return occupied territory, even if it is not economically or militarily valuable. Different considerations have dictated rare exceptions. The United States granted Philippines sovereignty to maintain its image of an anti-imperialist popular democracy which keeps its promises. Preserving the distant, heavily populated land as a colony against the wishes of its people was unfeasible, especially since the Philippines agreed to let the American military bases stay.
If Israel occupies Arab land to trade for normalization of relations, it must maintain credibility. Once the Arabs see they could regain lost territory without a peace treaty, they will have little reason to sign one. No country restores conquered land to a hostile neighbor unwilling to establish peaceful relations. It was very odd for Israel to give in to Lebanese and Syrian pressure. What could the political weight of a failed or terrorist state be, anyway?
Behavior which is rational in small groups does not work in complex adaptive social systems. The laws governing finite interactions do not apply to the infinite. Too many parties are involved in the Arab-Israeli conflict, too many interests clash, the actions are too unpredictable. The parties have no fixed positions. Attitudes adapt to changing circumstances, precluding systemic response.
The notion of reaching peace through good-faith negotiations is a rationalist fantasy not unlike a centrally planned economy. Neither decrees nor any number of people voting set prices and demand, but rather myriad market interactions, many imperceptible or seemingly irrelevant. Price-setting involves a lot of mini-confrontations, sellers refusing to take less, buyers refusing to pay more. Not goodwill but the relative market power of suppliers and consumers set prices. A market-set price is like peace: buyers and sellers know exactly how much they own or owe, and purchases are negotiated peacefully. The invisible hand—innumerable conflicts, power exchanges, exhaustion—makes peace, political or economic. Kindness might work in small groups but does not on the large scale where it cannot be tailored to each person’s perception and builds rancor, not goodwill.
Preparing for a drawn-out Arab-Israeli war when nearly everyone is talking about peace is odd in the extreme. We figure that two reasonable people can always reach a mutually acceptable solution. To suggest otherwise is counter-intuitive.
The Israeli situation differs from the model of two reasonable people arguing. At issue is a monopoly both parties want—or think they do. Partition of Jerusalem is humiliating to Israelis as if the Mongols demanded joint jurisdiction over the Kremlin with the Russians because the Mongols controlled their homeland for centuries. The possession of Jerusalem was a sensitive issue for Christendom for centuries until the religious cynicism of the nineteenth century arose. For Israelis and Arabs, the city is also a political concern. The parties to the conflict are not two. Not all the world’s Muslims will sign the peace treaty with Israel, and asymmetric warfare will let them ignore it to pursue their goals. There are no courts and police to enforce the agreement; U.N. guarantees did not prevent the Arab-Israeli war in 1967, and NATO’s protection is dubious. Israel lacks the depth of defense necessary to wait for support to materialize. Another difference is that crowds do not think rationally. The soldiers on either side might not see each other as enemies, but mobs do. Soldiers facing death might forget indoctrination; people who support Islamic terrorists from safety of their homes are prone to hatred. Countries reach agreements, but Israel is not fighting a country. Islamic terrorists have no reason to honor treaties, and they do not fear reprisal.
The nations of Europe, which share religion, ethnicity, and culture, could hardly make peace and fought for every imaginable reason, rich or poor, regardless of treaties and alliances. Sixty years of peace make some think it will last, though it took first a dangerous common enemy, the U.S.S.R., and now common trade adversaries, the United States and East Asia, to make it gel. Europeans are educated, hard-working, law abiding, and prosperous; none of that holds for the Arabs. Domestic wars became economically unfeasible for Europeans only decades ago, and their ideological and ethnic differences are now blurred. Israelis, on the contrary, want to preserve their difference from the Arabs, which is ample ground for hating Israelis.
The Americans took California, yet Mexican Americans do not blow up buses. Mexico accepted the loss of California because the Americans never offered to return it, claimed historical justification for the annexation, or asked humane Mexicans to pity European refugees to the New World. Americans were powerful and proud of it, therefore admired. Israel needs to make war to win peace. At their height, the Romans learned not to wait for the enemy to strike first but launched preemptive campaigns, usually with the limited objective of de-militarizing the enemy and installing a friendly ruler. In his dictum, Qui desiderat pacem, praeparet bellum, Vegetius Renatus criticized the policy of waiting passively for barbarian incursions. Pacifism is the end, not a means.
The subsidies to Muslims should stop, neither payments for good behavior nor sanctions punishing violence work. Once people realize someone will pay them to keep quiet, the asking price goes up. Force backed the pax romana, but money cannot buy peace. The United States has often tried to buy allegiance, only to watch its money end up in hostile hands, and breeding hostile minds. Money is not everything—and nothing compared to ideology.
If both Israel and the Arabs risked losing aid and either side declared a cease-fire, the other side would blackmail by threatening hostilities. Even if Israel and Arabs gave in to economic sanctions, they would resume hostilities once the money stopped. America’s Arab clients will turn on their benefactors in the hatred dependence generates.
Germany did not repent after WWI, even though the Allies did not invade the homeland and practically abrogated reparations; but the Marshall Plan changed its tune after the devastation of WWII.
Force is the only convincing argument in no-holds-barred, no-guarantees Arab-Israeli relations. Good behavior cannot be bought or even defined. If it means cessation of hostilities, Israel would be happy to preserve the status quo with an armistice, but the Palestinians cannot accept that—except to buy time and find the money to finance the next round.
Few soldiers go to war for ideology, and those who do forget all about it on the battlefield. Israeli soldiers generally do not hate Muslims, though many despise them. Tellingly, second-generation Israeli Jews of Arab origin hate their ethnic brethren far oftener, nearly as much as Arabs hate Israelis. Overcoming hatred is a major problems for both Israeli and Muslims, but it won’t happen any time soon. Both Israelis and Muslism an external enemy to blame their problems on. Only prosperous societies can live without enemies, and the Palestinians are desperately poor.
Voluntary settlement is not possible. Even when peace is imposed, hostilities often resume after a respite. Some Arab militants will not accept even the most reasonable solution, a Palestinian state on the West Bank and in Gaza, autonomy for Muslim sites in Jerusalem, and compensation for seized property. Islamic radicals demand the right of return for the refugees’ descendants, autonomy for Israeli Arabs, and a boycott and perhaps evacuation of the Jewish state. They will be few, and most Arabs will accept the offer; but suicide operations require no army. No peace treaty can improve Israel’s war status quo, though it might foster goodwill between Israelis and Palestinians that could be nurtured into cooperation.
Israel has the option of settling with the Arab countries and then dealing with the Islamic terrorists and, purportedly, reducing Israel's war requirements. Whether the Arab countries could be made to sign a peace treaty is not clear: so far they make more demands than compromises. Muslims would remain hostile to Israel, not letting her demobilize. Time dulls hatred, but it rekindles when new generations forget the past. Israel is the Arabs’ perfect enemy, non-threatening yet a good excuse for internal failures, and social upheavals will resurrect enmity. Israel is a foreign object in the Middle East conflict, and the Muslims will try to cast Israel out.
 The Israeli government shies from peace much as its Arab counterparts do. Absent an enemy, how to explain Israeli pitiful domestic failures and modest economy? How to shed the immense military-industrial-trade union complex, which requires war?