What we know for sure is that Israel caved in or gave in or simply agreed depending on your point of view. We don't know the full extent of the deal but are told it includes, an airport, sea port, buses and trucks to go overland between Gaza and the West Bank. We don't know what rights Israel has retained to terminate the agreement if any.
Let's take a worst case scenario. Terrorists, arms and ammunition will be significantly brought into Gaza. Some of them will find their way into the West Bank. Israel is buiding the fence which offers some protectgion on the west side and no protection on the east side. Gaza too has been fenced off. This week Israel has been using artillery to reply to rockets.
However the magnitude of the violence which will follow this agreement and it will be significant, Israel can deal with it but at what cost. I don't mean to minimize the new threat or to dismiss each and every casualty as acceptable but to put it in perspective in relation to the power of the IDF. Having said that this agreement rends usunder all Israel's anti-terrorism planning. Israel is greatly weakened by it.
And what about al Qaeda? Al Qaeda is growing in Sinai, Jordan and Gaza. How much of a threat are they? If you believe that they will win the war against the West then they are a huge threat. On the other hand if you believe that ultimately they will be defeated and destroyed, then it is only a threat in the short run; and they are a threat to everyone. The list includes Saudi Arabia, Jordan, Iraq, Europe and the US. No doubt this agreement makes it easier for them to hit Israel.
Israel knows that massive transfer is out of the question as is continued occupation. It had to find a way to live with the Palestinians. The Roadmap is the process to get there. It was a very bitter pill to swallow. Israel has agreed at worst to the Saudi Peace Plan. They did so either because the benefits of normalization with the Arab world and Europe was worth the cost or because it felt there was no other choice.
Similarly signing the border agreement looks like total capitulation but it may be that the hoped for benefits were worth the risk. If not Israel was given an offer it couldn't refuse. Normalization is so coveted by Israel that the majority are prepared to forgo territory and lots of it and to assume risk and casualties to achieve it.
What is clear is that it was easier for Rice to push Israel rather then the PA. Furthermore, I don't believe she wanted to crush the PA. Instead she wanted to give them a victory which would help Abbas in the upcoming election. The idea here is to continually build the institutions of democracy and the economy as the best way to work out of this hundred year war. Israel does not have any alternative plan. Israel is taking a risk that this process can be successful even if it means that Israel will end up with the pre '67 borders with exchanges of land and the sharing of Jerusalem.
Since the disengagement, the UN has been more hospitable to Israel, at least superficially, the Red Cross has invited Israel to join although on lousy terms, various Muslim countries including Pakistan have made overtures to Israel, Saudi Arabia has agreed to lift the trade embargo and other Arab countries will follow. Israel has improved relations with Egypt, Greece and Turkey. The list goes on. All this in three months.
Some will argue that they would rather Israel fight to get a better deal then to accept the Saudi deal. The price is just too exorbitant. Others argue that fighting to keep a few more kilometers is not worth the price in world wide ostracism.
Underlying this difference of opinion is the question of whether the Arab world will ever accept Israel. Of course Israelis differ on this too.
If Israel rejects the Saudi Peace Plan it should get off the Roadmap immediately and tell the world to go screw themselves. On the other hand if it believes that it is prepared to pay this price for full normalization, then it has to continue along this path.
I would have preferred that Israel hang tough on security and it certainly tried to. Condi couldn't deliver on Israel's terms and she wasn't going to go away empty handed. The lack of a deal would have ended the Roadmap. Israel on the other hand was not prepared to be the spoiler. They want the Palestinians to take the rap. So they agreed to a deal that would in effect give the PA more rope, hopefully to hang themselves, and not Israel, with. It reminds me of when Golda Meir decided not to preempt in '73 to disasterous consequences. She too didn't want to take the rap.
Both the suppression of the violence and the achievement of normalization are works in process. We'll have to see how it goes.