The financial burden of Israel’s occupation of the West Bank is secretly crippling the Israeli economy. But the price exacted by 40 years of occupation goes beyond a monetary debt – no more so than in Hebron.

40 years of West Bank occupation are causing Israel and Palestine to fragment. The Biblical imperative that settlers use to justify claims to the West Bank, the rejection by Israel of the applicability of the Geneva Convention – all this is now exacting a price Israel can no longer afford to pay, financially, socially or morally. As for the Palestinians – they have long been broken financially and politically and have nothing more to give.

And the moral bankruptcy is nowhere starker than in Hebron.

In this small city in the West Bank, some 5000 Israeli militia may not intervene to curb settler violence against the majority Palestinian population because they are there to protect these 500 settlers. Meanwhile Palestinians in Old Hebron may not use their own front doors to enter their streets let alone drive down them. Last month, when the Army gave orders to forcibly evacuate illegal settlements, soldiers refused to obey the orders. Law and order is as rare a commodity in Hebron as water in the Negev Desert.

The psychological damage caused to countless soldiers, senior NCOs and officers by having to pay the moral price of the occupation, is summed up by Michael, an ex -IDF officer of the Nachal Brigade, who said:

“Whatever I used to call democracy here in Israel, would simply vanish in Hebron. You give a young soldier so much power that the horrible things he does become the normal things after a time. But the source of all the evil in that city is the power of the settlers over us, the Magav (Israeli Border Guards) and the Police. I lost all sense of moral values and decency – I just lost all sense of all the limits I grew up with – what my family had taught me to believe in – all of this was destroyed in me by Hebron.

“In Hebron the fanatical Jews I was guarding didn’t behave with the same morality or values I was raised on. I reached a point in Hebron where I didn’t know who the enemy was any more – the fanatical Jew settlers who were going crazy and I need to protect the Arabs from him, or whether I need to protect the Jew from the Arabs we were told would always attack, but never did. If the Jews are capable of writing on the Arab’s house doors ‘Arabs to the gas chambers’ and drawing a Star of David, which to me is like a swastika when they draw it like that, then somehow the term Jew has changed for me. I think of myself as emotionally damaged.”

The Occupation and the rocket attacks form a rapacious creditor constantly drawing on an emotional bank account already hugely overdrawn. But even if the Israeli authorities turn a blind eye to the moral price of Occupation, what is now emerging is probably the one factor that may cause the Occupation to end – the cost to the Israeli economy.

Superficially things look good – low inflation and unemployment, strong imports and exports, and rising share prices. How, on the face of it, can the Israeli economy be flourishing, yet with no prospect for a durable peace in the offing? Part of the answer is that the economy is rather like an ill woman wearing rouge to look healthy on the outside. The inside picture is chronically different.

And the cost of the occupation is rising. Settler aid ensures that the State pays for 50% of the cost of a house, tax aid reduces taxes for settlers, and vast amounts are channelled into the settlement expansion building programme – and all Ministries have to contribute. The cost of subsidising the settler lifestyle runs at about $3 billion per annum – yet the military cost of maintaining the Occupation Forces is closer to $9 billion a year. This equates to 14% of the yearly State budget. Emigration is rising, immigration dropping and the rate of the Israeli population growth is 2% a year.

The director of the Jerusalem-based Rabbis for Human Rights, Rabbi Arik Aschermann, is in despair at this moral meltdown across almost all sectors of Israeli society:

“For me the real Zionism today is creating an Israel which is not only physically strong, but morally strong and that reaches our highest Jewish values. And yet I look around me and cry out at what is happening to Israeli society – I look at the suppression of the Palestinian people – the home demolitions, the settler violence and I ask myself, ‘Is this what Zionism has come to? Is this what we created the State of Israel for?’ To be demolishing the home of this or that person whom we never gave a fair chance to build legally?”

Meanwhile in Old Hebron the violence of the settler behaviour blights any change in the moral climate. If both Israeli and Palestinian societies are to stand any chance of recovering enough to cope with the peace their people deserve, then let the Gordian knot of Hebron be untied so that peace can start there rather than be buried there along with Abraham. His many children deserve better.

* Peter Small is a freelance journalist who recently joined the Lib Dems. He has been tracking the Israel/Palestine issue since before the first intifada in 1986.