By Tom Perry
THE JORDAN VALLEY, West Bank (Reuters) - In another world, the tented village at al Hadidiya might mark the farthest reaches of a future Palestine. Instead, the herding community living here talk about the limits of that dream.
Nestled in the northeast corner of the West Bank, al Hadidiya amounts to a cluster of sprawling sackcloth encampments which shelter families and goats from the fierce desert elements.
Even if Palestinian leaders win U.N. recognition of statehood this month, the people of al Hadidiya say it will not improve their lives, squeezed by the rules of Israeli occupation.
Although part of the West Bank, al Hadidiya is inside a border zone deemed a vital strategic area by Israel, whose security forces have repeatedly demolished the encampments since 1997, typically on the grounds they were put up without permission.
The community now numbers 100 people -- a quarter of the population 14 years ago.
"Remaining on the land is our first and last goal," said Abdul Rahim Bisharat, the community's official representative, his head covered by the black-and-white scarf long a symbol of the Palestinian struggle.
"The weak-spirited people left, the last of them in 2008. Those who remain have taken a decision: no more forced expulsion."
Signs of the most recent demolitions, carried out in June, lay scattered around the site. A fridge and a pile of furniture stand exposed to the desert sun. U.N. agency OCHA, which documents such incidents, says the most recent demolitions left 37 people without homes. They stayed put regardless.
Demolitions are just one of the problems that Palestinians living under Israeli control in the West Bank have to deal with.
There are also restrictions that prevent construction and free movement. The expansion of Jewish settlements has eaten up land and Palestinians, along with their property, are increasingly the target of settler violence.
In al Hadidiya, which neighbors a settlement, access to water -- a resource mainly controlled by Israel -- is also a major problem.
His life controlled by a foreign force, Bisharat has little faith that things will improve, even with the backing of the majority of U.N. members for statehood.
"A state without borders cannot be," he said.
PEACE PROCESS FAILURE
The Palestinian leaders behind the U.N. move argue it will buttress their claims to the West Bank along the border with Jordan, the separate Gaza Strip on the coast and East Jerusalem, which Palestinians want as their capital.
They say the step is a result of the failure of the U.S.-backed peace process to deliver Palestinian independence on land occupied by Israel since the 1967 war.
At least 120 countries have already recognized Palestine, including Russia and emerging powers such as Brazil. But Israel and the United States, its closest ally, both oppose the move, arguing that only direct negotiations can lead to statehood.
That means that even if the Palestinians enjoy the support of a majority in U.N. states, Washington will block their bid for full membership of the world body in the Security Council.
In any case, Palestinian leaders admit the vote will have little impact on the ground.
While Israel has removed some of the West Bank checkpoints put up during the last Palestinian Intifada, or uprising, which erupted in 2000 and had mostly fizzled out by 2005, its overall control of the territory appears as firm as ever.
Israel has created walls, fences, earth barriers, checkpoints, military firing zones, and army bases, all necessary, it says, for the security of the state. Some 300,000 of its citizens, meantime, have moved into settlements on land they consider Judea and Samaria in the West Bank. Another 200,000 also now live in and around East Jerusalem on land Israel has formally annexed.
Though the Palestinian Authority has built up institutions ready for statehood in the last two years, its territorial control is limited to patches of West Bank territory which encircle the biggest Palestinian towns and villages -- a zoning system the Palestinians agreed to in the 1990s in the belief it would be a step toward independence.
This has left Israel in full control of 60 percent of the West Bank's territory, effectively governing the lives of 150,000 of its 2.5 million Palestinian residents and dominating land seen as crucial to the establishment of a viable Palestine.
The authority's reach has also been curbed by internal Palestinian divisions. The PA has not governed Gaza since the Hamas group seized control there in 2007, denying it the chance to develop a territory evacuated by Israel in 2005.
LIVING ON A WEST BANK ISLAND
The limits to PA influence can be seen in Nabi Samuel, a Palestinian village northwest of Jerusalem that has been cut off from its Arab hinterland by Israel's meandering West Bank barrier.
"We are now on an island," said Mohammad Barakat, a lawyer who speaks on behalf of the community of 250 people.
The barrier is just one lasting consequence of the second Intifada -- an uprising whose failures are often cited by Palestinians as good reason to avoid more violent confrontation with a vastly more powerful adversary.
Israel says the barrier was aimed at stopping suicide bombings and other militant attacks and says it is working.
But Palestinians say it is aimed at seizing control of land. The section that has cut Nabi Samuel off from the rest of the West Bank for example, also loops around nearby Jewish settlements deemed illegal by the world court, anchoring them to Israel.
Reaching Palestinian towns once a five-minute drive from Nabi Samuel can now take more than an hour. Visitors from the other side of the barrier must get Israeli permission to pass through a checkpoint.
While there is no barrier between Nabi Samuel and Jerusalem, villagers caught working there illegally face jail and a hefty fine. Ten have been caught in recent years. Two are still in prison.
Unemployment runs at 90 percent, Barakat said. The village boasts one small grocery. Its school is a single room measuring 4 meters by 4 meters, which serves 11 pupils. Inevitably, younger people have started to leave.
Some 50 people, around a fifth of the population, have abandoned the village for the other side of the West Bank barrier in the past two years.
"It would be easier for me to move to Ramallah, but I can't contemplate leaving my village," Barakat said.
"WE'RE READY FOR STATEHOOD"
From Nabi Samuel you can see the growing skyline of Ramallah, which currently serves as the administrative heart of the would-be state. With its gleaming new ministerial complex and presidential palace, it provides a stark contrast to the village's potholed roads.
Critics say the PA has focused too much attention on the city, turning it into a de facto capital that is taking the place of East Jerusalem, now beyond the West Bank barrier and part of what Israel calls its indivisible capital.
Fountains and sculptures decorate Ramallah roundabouts, part of an overhauled Palestinian road network rebuilt in much of the West Bank with the financial backing of international donors, including the United States and the European Union.
A police force kitted out with brand new Volkswagen patrol cars and Italian motorbikes whiz around the streets.
The state-building work led by Prime Minister Salam Fayyad is routinely praised by visiting officials.
The authority points at two major differences between the institutions it has built and a similar project led by the late Palestinian leader Yasser Arafat in the 1990s.
Now, there is a transparent system of financial management which has trimmed its reliance on donor support. The new security forces, trained with Western assistance, are helping to prevent violence against Israel.
"We became ready for statehood and independence according to the international community's criteria," Ghassan Khatib, spokesman for the authority, said.
The World Bank, in a report published this month, said PA public institutions now compared favorably to other countries in the region and beyond -- another reason Palestinian officials say they are ready to lead a real country.
LEGITIMACY ON THE LINE
But even as Palestinian leaders head to the United Nations, the PA faces a crippling financial crisis that underlines its fragility.
The immediate cause is a shortfall in the foreign aid which the authority needs to plug a deficit forecast to reach $900 million this year.
The deeper cause is the vulnerability of the Palestinian economy. The World Bank report said Israeli restrictions, which hamper the private sector, need to be lifted to allow the PA to expand its revenue base and sustain its institution-building.
In the last three months, the PA has twice failed to pay its 150,000 employees their salaries on time and in full, damaging its public standing.
Failure to win independence in the next few years will hit credibility further, warn Palestinian analysts. The PA's critics say its strategy of negotiating peace with Israel has been a complete failure. The continuing failure of the PA and Hamas to bring Gaza and the West Bank under the one leadership -- there have been no elections since 2006 -- is another problem.
"The legitimacy of the PA is on the line because the Palestinians never envisaged it operating permanently as a large municipality," said George Giacaman, a political scientist at Birzeit University near Ramallah.
"Obviously this is not enough," he said. "Without a credible political process, it will collapse."
In Gaza, Hamas faces its own dilemma as it tries to reconcile its stated commitment to armed struggle against Israel with its responsibilities as a government eager to avoid punishing Israeli reprisals.
LOOKING TO THE ARAB SPRING
In the seaside enclave which Arafat once said would become Singapore on the Mediterranean, an international airport named after him is a relic of his state building project of the 1990s.
The airport today lies in ruins, a fading symbol of an earlier period when there was hope among Palestinians that an independent state might flourish.
Many argue that the time for a two-state solution has passed. Perhaps. But the Arab Spring might provide new momentum. If Arab governments begin to reflect popular sympathy with the Palestinian cause, then Israel could come under more pressure than ever.
"Much more than before, I see possibilities for the future," Giacaman said. In the short term, though, he agrees with Abdul Rahim Bisharat in al Hadidiya and Barakat that the key is to stay put. "One should expect the following attitude: how to survive, how to remain, because the Palestinians understand this is an important strategic asset."
(Editing by Simon Robinson and Sonya Hepinstall)