Following his re-election in 2009, Netanyahu has increasingly made this demand a mainstay. Indeed, he and his supporters now say it is not only crucial, but that it is the only real issue, even though it was never raised during most of the Palestinian-Israeli negotiations, including during his first term as prime minister.
The idea that a state -- or in this case a potential state -- should participate in defining the national character of another is highly unusual, if not unique, in international relations. The Palestinian position, stated many times by President Mahmoud Abbas, is that the PLO recognizes Israel, and that Israel is free to define itself however it chooses.
There are several crucial concerns that make Palestinian acceptance of this new demand, particularly as a prerequisite to further negotiations, extremely difficult.
Apart from strongly feeling that they have already met all reasonable demands that could be imposed on them in regard to recognizing Israel without a reciprocal recognition of an independent Palestine, Palestinian leaders worry about the ways in which this could prejudice some key final-status issues, notably refugees. Palestinian leaders are well aware that a wide-scale implementation of the right of refugees to return to Israel is a nonstarter from Israel's perspective. It's also, however, the most politically challenging issue any Palestinian leadership will have to sell to its constituency to win support for an end-of-conflict agreement; refugee return is both a right clearly enshrined in international law and one of the principal themes of the Palestinian national narrative. It is one of the few major cards the Palestinians have left to play, and, while it is reasonable to urge them to work harder to prepare their public for the necessary concessions, it is not reasonable to ask them to compromise it away before an overall agreement is concluded.
While the Palestinians clearly accept the logic of two states, and have always acknowledged a final-status agreement will involve an end of claims between the parties, they reasonably feel that asking them to formally endorse language about Israel's character as a Jewish state might prejudice leverage they could get on other crucial final-status issues from compromises on refugee return. Most serious observers have long understood that the issue of Jerusalem is the analogous problem on the Israeli side, and that no matter how much Israeli leaders and their public do not like it, no Palestinian leadership will accept an agreement that does not base the Palestinian capital in Jerusalem. Therefore, the refugee issue is widely seen as the best, and perhaps the only, leverage the Palestinians have to get the Israelis to make their own most painful compromise on the future of Jerusalem.
Moreover, Palestinians are concerned that recognizing Israel as a Jewish state might be seen as endorsing discrimination against the Palestinian minority in Israel, which is approximately 20 percent of the population. They point out that Jewish Israelis do not agree at all on what the Jewish character of Israel means. Important sections of Israeli law, life, and society are structured in a discriminatory manner based on "nationality" (i.e., "Jewish," "Arab," and scores of other classifications made by the state) as opposed to citizenship. This discrimination applies to housing, education, military service and its many benefits, access to publicly owned lands and other important aspects of social and economic life. Palestinians are understandably uncomfortable with anything that might smack of acquiescence to these structures of discrimination that permeate Israeli society in favor of those classified by the state as "Jewish."
For decades, Palestinians were told to recognize Israel and renounce violence, and through their sole legitimate international representative, the PLO, they did so almost 20 years ago, even though it meant effectively renouncing claims on a full 78 percent of the country in which they had been a large majority in 1948. They did this on the understanding that it would lead, in short order, to their own independence in an excruciatingly small part of what they regard, with impeccable historical credentials, as their own country. That has not transpired and does not appear imminent. Now they are being told that they have not done enough, that this novel concept is now the defining issue, that they once again have to read from a script being handed to them by Israeli leaders, and that if they will only say the new magic words the problem will be solved.
I doubt there is a single Palestinian who does not believe that behind Netanyahu's demand lies a fundamental disinclination to agree to a truly independent and sovereign Palestinian state. Indeed, at the Knesset on May 16 and at the Congress on May 24, he insisted on a long-term Israeli military presence along the Jordan River, effectively denying this potential Palestinian state control of its own borders. This places Netanyahu squarely at odds with U.S. President Barack Obama's clear reference to a "full and phased withdrawal of Israeli military forces" from the areas to become a Palestinian state, as does his continued strong implication that he is not prepared to negotiate seriously about Jerusalem. Therefore Netanyahu's insistence that the only real issue is for Abbas to intone the incantation "I accept Israel as a Jewish state" rings exceptionally hollow.
Netanyahu's demand is an additional and quite recent complication to an already tangled knot, but it has sunk so deeply into the Israeli and pro-Israel consciousness that some sort of language to satisfy it may ultimately have to be found. Reciprocal recognition of the Jewish right of self-determination in Israel and the Palestinian right of self-determination in Palestine might well prove a requisite final flourish on a peace agreement. But expecting or demanding Palestinians to embellish their already unrequited recognition of Israel with an extremely problematic, premature, and, at this stage, politically impossible statement about Israel as a "Jewish state" (again, whatever that might mean) can only be interpreted as another, and entirely gratuitous, obstacle to peace.