Since Israeli-Palestinian talks began nearly two decades ago, it's been clear that Jerusalem would be the thorniest problem of all. Because of this, the prevailing assumption has been that Jerusalem would come last in negotiations, once the issues of borders, security the settlements and even Palestinian refugees were resolved. But in the last month, Jerusalem's become an obstacle not to the conclusion of negotiations but to Palestinian agreement to sit down even for indirect proximity talks.
The deadlock's occurred because Jerusalem is the most loaded word in the Middle East lexicon. Its very mention arouses emotions that preclude a rational discussion. Even the way the word itself is used is the subject of profound disagreement: what to Israelis is Jerusalem, is Al-Quds for Palestinians.
On this issue, high rhetoric is treacherous. And sure enough, in this last round, both Israel and the United States have made mistakes. The only way to disarm this minefield is by focusing on practical solutions and leaving symbolism behind.
First, the facts: until the 1967 War, Jewish Jerusalem, on the west side of the city, comprised 9,390 acres, while Jordanian Jerusalem, on the east side of the city, comprised 1,482 acres only. In the aftermath of Israel's lightning victory and the evocative return to Judaism's Holy Sites, it enlarged Jerusalem's municipal boundaries by annexing 17,300 acres in total. These included not just Arab East Jerusalem, but open areas, villages and refugee camps that were situated deep into the West Bank. Israel immediately began to create facts on the ground by settling all these areas with Jews.
Today, it's patently clear that Israel's own interests necessitate relinquishing those large swaths of greater Jerusalem that are densely populated by Palestinians. What Israeli interest could possibly be served by holding onto the Shuefat refugee camp, which is populated by tens of thousands Palestinians and is as close to Ramallah as to Jerusalem? The same goes for several of the Arab villages, like Zaim, Azaria or Isawia, situated on the edge of the desert and hardly visited by Jews since 1967. In the future, these will only be a burden--devoid of any strategic, historic or symbolic importance.
Bottom line: If Israel wants to preserve the city's Jewish character, it is in its own interest to reduce the number of Palestinians residing within its boundaries.
The expanded city's new Jewish neighborhoods are another story altogether: These were built beyond the Green Line, in largely unpopulated areas, and now are home to some 200,000 Israelis. When Washington calls these "settlements", all Israelis wince. They are part of Jerusalem for all Israelis-- including the peace camp. That is why Prime Minister Netanyahu has wall to wall support when he pronounces, "Jerusalem isn't a settlement, it's our capital."
President Bill Clinton understood this well. His 2,000 parameters (and other subsequent draft peace plans, such as the Geneva accord) called for reflecting the demographic reality of the city -- leaving the Jewish neighborhoods of East Jerusalem in Israel's hands and the Palestinian ones in the Palestinian state.
President Obama would do well to adopt this position and to desist from demanding an Israeli construction freeze in the Jewish neighborhoods. This applies to Gilo, Ramot, Pisgat-Zeev - and also the 1600 units in Ramat Shlomo that caused the standoff during Vice-President Biden's recent visit. There isn't even a remote chance that these areas will not be part of Jewish Jerusalem's future contours.
On the other hand, Mr. Obama is absolutely right in demanding a halt to construction in East Jerusalem's Arab neighborhoods. Palestinians will never agree to a two-state deal without a capital in Al-Quds. So no matter what they say about Israel's historic rights, whoever supports Jewish construction in these Arab neighborhoods is actually fighting the creation of a Palestinian state. Recognizing this, President Obama was right in reacting furiously to Israel's announcement of 20 housing units in Sheikh Jarah (on the day that Mr. Netanyahu visited the White House, no less).
There is another element to resolving Jerusalem - and that is the Palestinian refugee issue. No one in Israel will agree to a two state deal unless the Palestinians give up their claim for the return of the 1948 refugees to Israel. All Israelis correctly see this demand as threatening their state's Jewish character. Therefore, even dovish Israelis will agree to no more than compensation for Palestinians refugees.
So here's the point: Jerusalem is linked to the issue of refugees. Security, borders and settlements can be resolved as separate issues, but these two core issues will have to be traded off one another. The Palestinians will have to concede to Israel on refugees, and in return, Israel will have to concede on Jerusalem.
Washington has to understand this. To the Israelis, its message should be: If you want your demand on the refuges issue to be accepted, you must concede much of East Jerusalem, where the Palestinian capital will be. To the Palestinians, its message should be: If you want East Jerusalem as your capital, you must forego your demand for return of refugees to Israel. If the President does it now he will find a surprising degree of Israeli public support.
Dr. Peri is a former advisor to Prime Minister Rabin and now the director of the Gildenhorn Institute for Israel Studies, University of Maryland. firstname.lastname@example.org