Peace Dividend in Israel

JERUSALEM — Jerusalem. -- Booming, not bombing, is the big story in Israel. The economy of the small and brainy pseudo-Western country surrounded by enemies has taken off with the signing of successive peace agreements in the centuries-old civil war between Jews and Palestinians.

To most of the world, Israel was an outlaw nation as long as it militarily occupied the villages and cities of Palestinians in Gaza, in East Jerusalem and in the lands on the West Bank of the Jordan River.


But with all the risks and bombings of the current peace process, the documents signed by Prime Minister Yitzhak Rabin and Yasser Arafat of the Palestine Liberation Organization have also brought new investors into Israel from everywhere in the world, particularly Asia, and opened new markets for Israel's exports.

"Peace is good for business," said an Israeli merchant. But it has not yet done much good for most Palestinians. The border closings between Israel and the Palestinian enclaves because of terrorist bombings have probably cut overall Palestinian income by as much as 25 percent. And aid promised to Mr. Arafat by the United States and European countries has been slowed to almost nothing by the lack of Palestinian institutions and systems to accept and spend and account for the money.


With the boom in construction and manufacturing, Israel is TC attracting a new wave of European immigration. The most striking sight to me at Tel Aviv was a lineup of passenger jets from airlines I had never heard of, Air Ukraine and the new national airlines of other former Soviet republics, bringing immigrants, businessmen and tourists.

Those coming to stay are welcomed under Israel's "Law of Return," offering citizenship to all Jews anywhere -- and there is some evidence that many of the folks coming became Jewish about a month ago, when they checked the right box on immigration forms.

Truly Jewish or not, they come for money -- 600,000 immigrants since the collapse of the Soviet Union. They come for the jobs and opportunity in an economy growing by at least 6 percent a year. The per-capita income of Soviet immigrants is already higher than the national average of all Israelis. (Some of those immigrants have also brought skills in a business the Israelis do not need or want, organized crime.)

Peace or the threat of new terrorism has also brought contract guest workers to Israel from places such as Korea, Romania and Thailand, men who do the manual labor formerly done by Palestinians now prevented from coming into Israel.

The closed border -- which has cut the number of Palestinians working in Israel from more than 60,000 to fewer than 30,000 -- makes for even starker contrast between prosperous Jewish life and Palestinian life in, say, Jericho, the new Palestinian capital. "Jericho" looks good in newspaper datelines and in the Bible, but it is little more than a dusty little border town with more wall paintings of Mr. Arafat than shops.

The world is coming to Israel. The American International School in Jerusalem, once almost exclusively the preserve of the children of Israel's international patron, the United States, now has an American enrollment of only 15 percent.

There are still soldiers everywhere in Israel because it is still a dangerous place. Young men and women in bright T-shirts and jeans chatter and flirt at cafes and ice cream stands, the Uzi machine guns on their backs jangling as they laugh and wave to friends. But there is a sense of optimism and hope and more patience than I expected, even among Palestinians.

Both sides realize that the new terrors are the desperate acts of relatively small groups trying to halt the rush to peace. They have to live for a time with Hamas, the Palestinian bombers, and with the fanatic Jewish settlers of the West Bank. The settlers, many of them fundamentalist immigrants from America, are in some places being dragged from their hilltop settlements by their own crying soldiers, who are charged with turning those hills over to the Palestinians.


Peace is often harder than war, or at least more complicated. This could all collapse, particularly if terrorism succeeds in bringing Likud hard-liners back to power in next year's Israeli elections. The former Likud prime minister, Yitzhak Shamir, has joined in anti-peace demonstrations. But now there is a new peace constituency, businessmen reaping a true peace dividend; they may be critical in making this thing work.

As we waited in the line of traffic at the Allenby Bridge over the Jordan River outside Jericho on the West Bank, an Israeli lieutenant and a Palestinian border guard stood together trying to decide whether to let us through without papers.

The Israeli came back to tell us it was no go. Then he pulled my wife aside and said: "Don't be discouraged. There is a special thing about this place. I am an Israeli soldier and he is a Palestinian soldier, and here we are working side by side. That is what is important here."

Richard Reeves is a syndicated columnist.