Responses to Prediction and the Middle East Peace Process
The Mershon Center
February 1997
Predictions about Israeli-Palestinian Negotiations
I. Introduction:
My first cut at the hierarchy of driving forces ranks Israeli-Palestinian bilateral factors as the most important and regional and global factors as secondary.
Competition between global powers (USA, Russia, China) is currently not intense. None of them see the bilateral Israeli-Palestinian conflict as instrumentally critical to their broader strategic competition with each other. None see their security as centrally tied to this conflict, and, consequently, while interested not even the United States will commit enough resources at this point to overturn the forces driving the bilateral bargain.
Competition among regional states is substantial, but the conflicts that do not involve Israel do not involve states powerful enough to project their competition into the Israeli-Palestinian conflict. For example, Iranian v. Turkish, or Iranian v. Saudi Arabian, or Syrian v. Iraq, or India v. Pakistan might tangentially connect to the Israeli-Palestinian conflict, mostly in the realm of rhetoric and symbol manipulation. None of these states, however, are strong enough to see the Israeli-Palestinian conflict as an instrumental regional manifestation of their broader strategic conflict.
The primary determinants of the Israeli-Palestinian negotiation process in the short-term are the conflicting ambitions and calculations made by Israelis and Palestinians. Forces at the global and regional level will affect these bargaining calculations, (affecting both relative coercive leverage and positive reassurance) but they will not impose additional sources of conflict. My examination of global and regional forces, will follow my construction of the primary bilateral dynamic. I do not think global and regional factors will upset the short-term prediction I will make for the bilateral Palestinian-Israeli relationship. They may play a big role in shaping longer-term predictions.
II. The bilateral process of bargaining and domestic politics
Second, what will hold the agreement in place? The answers to this second question revolve around two forecasts, future leverage and power relationships and predicted changes in attitudes, perceptions and aspirations.
B. What the competing parties currently will accept:
Likud prefers autonomy minus. Its leaders believe that they can compel Palestinians to accept this outcome. They believe Palestinians separated into very small enclaves with municipal authority will be too weak to challenge the essential aspects of this outcome, that is Israeli sovereignty and freedom of action in the territories. Likud leaders expects the agreement to be held in place mostly by superior Israeli power. They do not expect Palestinians attitudes that are hostile to Israel to change much. Likud assumes hostile Palestinian attitudes are unchangeable -- only Palestinian perceptions of their capability and options can be affected. Likud strategy aims to reduce Palestinian perceptions of options until they recognize and accommodate to Israeli superiority. Arafat prefers two states but will accept autonomy plus. He is convinced Palestinians do not have the capability to compel Israel to surrender any more at this time. He hopes that Israeli public opinion can be changed over time allowing for incremental movement to two-states. He also hopes US policy will support his presidency and the PNA as a way to deal with Hamas and residual violent resistance. If he can build the infrastructure of state power, he hopes over time two-states can be sought. The levers that hold this in place then are the support he can gain from Israeli public opinion, US policy, and the patronage networks he can establish in Palestine. Hamas prefers the elimination of Israel as a Zionist state, but will accept a two-state outcome. They do not believe that hostile Israeli attitudes can be changed. Appeasement of Israeli security concerns in their minds makes more Israelis believe Likud objectives are achievable. They rely on terror to upset this Israeli conclusion. They do not articulate short-term options other than disrupt the process of "capitulation," as they see it, and hold on for a future in which power relationships might change.
C. The Oslo- Gaza-Jericho deal and the bargaining cycle
Oslo and Gaza-Jericho agreements involved a fundamental bargain. "Land for peace" metaphorically captured the tradeoff but without providing any detail. Arafat agrees to give up the intafada and end the coercive strategy of resistance, in exchange Israel agrees to give land and autonomy to Palestinians. Ambiguity is left so that Rabin can say agreement reflects Palestinians acceptance of autonomy and Arafat can say agreement is part of an incremental process leading to two-states. Rabin and Labor concluded that Israel could not sustain that status quo or autonomy minus forever. The Palestinians had two main levers in this regard: (1) the intafada and (2) perceived Israeli vulnerability to future weapons of mass destruction. Rabin argued openly that Palestinians did not represent an existential threat to Israel, Iran and radical Islam in the Persian and Arab world did represent an existential threat to Israel. A deal with Palestinians was necessary to stop the intafada and to allow Israel to deal with the long-term threat. Arafat concluded that an incremental process of achieving land and statehood was preferable to continued violent struggle, especially if it included his own presidency. The risk for Arafat was that he would be required not only to end the intafada but attack Hamas and other Palestinians ready to fight for better terms. This would undermine the primary coercive lever compelling Israelis to think in terms of separation and two states. Arafat's only remaining levers would be Israeli public opinion in favor of a settlement and US policy. Both are weak levers. Israeli opinion is divided and as easily mobilized by Likud for an autonomy minus outcome as for a two-states outcome. US policy will generally follow Israeli preferences in the absence of compelling alternative strategic opportunity costs of which there currently are few. Arafat could not persuade enough Palestinians to accept the hope for an incremental process leading to two states in exchange for short-term concession. He resorted to authoritarian means to insure election success and political control. This involved arresting central elements in Hamas and other resistance groups. Division in the Palestinian community grew as Arafat exercised more authoritarian power and became seen by Hamas as an Israeli-US client. This tension grew more intense as Hamas was able to conduct terror bombings and evoke still greater Israeli and US pressure on Arafat to clamp down harder on Palestinians. Division in the Palestinian community had two effects: First, Arafat's campaign against Hamas was significant and effective. It reduced very substantially the military capability of Hamas and made return to an intafada strategy impractical. The PNA arrested and held more than 1,500 people while rooting out key cells and networks of opposition. What was left was Hamas's ability to conduct periodic terror bombings but not to sustain any armed struggle against the PNA or Israel. Second, the combination of declining Palestinian leverage and sporadic bombings undermined Israeli willingness to make concessions. The cyclical pattern escalated after Rabin's assassination. The cycle had these elements: Arafat advertises progress toward two-state outcome -- Israel's government makes a move to deny the two state outcome and advertise autonomy minus -- US supports the Israeli position and mediates the PNA concession making -- Arafat clamps down harder to stay in control as public dissention grows -- terror attack occurs reinforcing the Israeli hard line --Arafat tries again to both clamp down and claim that he is not capitulating but defending Palestinian nationalism. He does this by both advertising some progress toward two states outcome and releasing some Hamas activists -- Arafat's effort to sustain credibility in the Hamas world looks to Israeli like a double game or conspiracy. Hamas and nationalists remember the arrests and authoritarian rule. Israel rejects Arafat's good intentions and cooperative efforts. Israel's government retrenches in the implementation of the land and autonomy aspects of the process demanding more security cooperation. Hamas carries out more terror. Israelis retrench still further, the cycle repeats. As this cyclical process has unfolded Israeli policy has shifted. In 1994 Rabin and Israel under Labor appeared to signal agreement with an incremental step by step process to separation and two states. Under Netanyahu and Likud, Israel forecasts autonomy minus as the desired objective. My counterfactual guess is that had Rabin lived he would not have retrenched to where Netanyahu's policy is, but he would have moved in the same direction. Israel public opinion is moved toward the Likud position by the cycle of the PNA's declining real coercive leverage and sporadic violence.
III. A Prediction at the bilateral level.
Given the collapse of Palestinian leverage, I suspect the outcome in the near-term will be autonomy minus. This fall, there will be talks about final settlement mediated by the USA. Netanyahu will insist on autonomy minus, i.e. small pockets of Palestinian control separated from one another -- not quite Bantustans each pocket is much too small. Israel will leave troops and security forces to root out terrorism and retain freedom of movement and intervention in the Palestinians areas. Given the collapse of Palestinian leverage, I suspect the outcome in the near-term will be autonomy minus. This fall, there will be talks about final settlement mediated by the USA. Netanyahu will insist on autonomy minus, i.e. small pockets of Palestinian control separated from one another -- not quite Bantustans each pocket is much too small. Israel will leave troops and security forces to root out terrorism and retain freedom of movement and intervention in the Palestinians areas. Arafat will be pressed by the Israel and the USA to clamp down still harder to provide for Israeli security. He will try partially, but he will also try to preserve some image as an independent nationalist leader. The result will be more arrests and detentions as he cooperates with the USA and Israel, but also a persisting practice of releasing the Hamas and nationalist activists after several months and often serious mistreatment. This pattern will infuriate everybody, Israelis, Americans, and Palestinians alike. With the negotiations focusing on final status issues the incremental scenario leading to two states advertised by Arafat will be shattered as an illusion. Palestinians will complain and Arafat will need to exercise still more authoritarian control and will do so with the help of the USA and Israel and perhaps other US clients in the Arab world. The next stage of the negotiations will produce a new agreement to try to implement parts of the package already agreed on. The practice will represent substantially less than what Rabin and Labor had forecast. Likud will insist on provisions in the direction of autonomy minus. Arafat will complain about the unfairness of the demands and Palestinians overall will complain that Israel has refused to made good on the prior agreements regarding land and autonomy. US mediators will try to sell what is essentially the Likud demands to the PNA. Initially the US mediators will fail but eventually the US will tell the PNA this is the best it can get and that the PNA needs to take it. Arafat will say this ruins everything and that Likud is being allowed to renege on central provisions of land and autonomy and then he will concede to the US position. The US will hold open the possibility for more movement toward two-states in the future and back away from the idea that this is final settlement, once it is clear the outcome this round will be autonomy minus. The US will do this to keep up appearances in the Arab world and to help Arafat. Israel-Likud will announce that this is the final settlement for the foreseeable future. Autonomy minus will be unacceptable to many Palestinians but they will have no other options in the short run. Arafat and PNA will not be able to resurrect its leadership for a resistance strategy. They may play the game outlined above, cracking down on Hamas while trying to appease nationalist sentiments by releasing activists later. The result will be the worst of both worlds. The PNA will destroy Palestinian unity and options for collective resistance (i.e. a new intafada under PNA leadership), and it will evoke Israeli outrage and deepen Israeli suspicions, leading to broader Israeli support for the autonomy minus outcome. Hamas will continue to resist with sporadic terror attacks. They may target Arafat. His assassination would cripple the PNA still further and probably lead to Israeli intervention to secure autonomy minus. Without a real threat of a new intafada, Israeli public opinion will forget why they started to move toward the separation and two-states outcome several years ago. Israelis will accept Likud's position that Israel is strong enough to get autonomy minus. They will conclude, as Likud does, that terrorism is inevitable in any case and that Israeli control and penetration along with intense pressure on the PNA is the best way to reduce the terrorism risk. There is a chance that in this This is a short-term (9-12 months) prediction. In quantitative terms I guess I would say its around 75% likely. In the longer-term several factors can lead to different outcomes. I will discuss these below. Before I turn to global and regional factors, however, let me outline an alternative short-term outcome that I guess is about 25% likely, in other words quite unlikely but possible. The terror may discredit Netanyahu's and Likud's claim that Israel can have autonomy minus and peace too. Israeli public opinion might blame Likud policies for undermining Arafat and PNA efforts to establish popular legitimacy and control. Having tried Likud's way to stop terrorism and failed, Israeli opinion could swing back to a Labor policy of trying harder to appease Palestinians nationalist sentiments and thereby strengthen Arafat and the PNA vis-a-vis Hamas. I think this development in Israel is unlikely. It requires Israelis to believe that Arafat has done what he can to deliver security to the Israelis. Israelis are much more likely to believe in Arafat's bad faith and accept Netanyahu's picture of him. Moreover, this scenario would require Israelis to recognize Hamas sentiments as important domestic constraints on Arafat that need to be partly appeased not crushed. Israelis to blame Likud for the breakdown in negotiations would need to see the Palestinian hard-line as somewhat like Israelis hard-line, that is an indispensable part of the final settlement not an element to be eliminated by force. Given the terror and current climate in Israel, it is very unlikely that public opinion will adopt such a view of Hamas. Much more likely is that a wide consensus in Israel will persist that defines Hamas-like sentiments among Palestinians as the enemy of peace that need to be destroyed by overwhelming force.
IV. Global Forces that will affect longer term outcomes.
Globalization (capital mobility and multinational production networks) will affect public attitudes in Israel. It will increase public awareness of the opportunity costs they pay for political contest. It may strengthen the hand of business leaders who don't think much about the Israeli-Palestinian issue but are more interested in business opportunities. Maybe 50% likely. The effect of globalization on Arab populations is more likely to promote populist sentiments. Poor and middle class Arabs facing rapidly growing population pressures and urbanization will feel that the increasingly multinational nature of economic decision-making is still more evidence that their leaders are corrupt and have sold them out. It will increase the grounds for nationalist and Islamist mobilization. This will take the form of anti-Arab government and anti-Israeli rhetoric. (Maybe 75% likely) In the Palestinian community it will further erode Arafat's public support but allow him to strengthen his patronage networks. (75% likely) Global economic trends will affect the perceived ability of allies of Israel and allies of Palestinians to grant or withhold aid. This in turn will affect perceptions of the long-range relative potential power estimates. Stable oil prices and strong economic indicators in the US market will strengthen Israel's leverage and make the autonomy outcomes more likely to last. Americans will not perceive opportunity costs for ignoring Palestinian aspirations. This is the most likely trend in the short-run, 70% likely. If oil prices climb, or become very unstable in the face of regime alterations in the Gulf, then it is more likely that Americans will perceive opportunity costs. (In the short run oil prices will climb slowly, over the next decade I think 75% likely they will increase noticeably). This will erode US support for Likud policies and push US policy in the direction of promoting more Palestinian control of land and autonomy. (50% likely) It is equally likely Americans will accommodate to higher oil prices and simply dislike Arabs. If oil prices rise the revenue base of Iran and Saudi Arabia will improve. The serious economic problems they now face will remain evident but be much less pressing. With increased oil revenues, Iran will lend more support to Hamas and Palestinian resistance (75% likely). Arab nationalist demands in Syria will also receive more support from Saudi Arabia. Increased capability among oil exporters will not necessarily strengthen Palestinian causes. GCC states will not bankroll Palestinian nationalism at high levels. Iran puts much greater importance on the shi'a movement in Hizballah than on the sunni Hamas or Islamic Jihad. High oil prices would strengthen the leverage of oil exporters and in turn attract Palestinians as Moslems or Arabs. Given the failure of the Palestinian national movement the result could be that Palestinian nationalism gives way to Arabist or Islamist identities among the people who today call themselves Palestinians. If either an Arab leader or Islamic leader emerged as a genuine challenge to Israel and the US, my guess is that with 70% likelihood Palestinian nationalism would give way to Arab or Islamic community identities. I base this on the experience during the Gulf war where Palestinians rallied around Iraq as Arab nationalists not Palestinian nationalists. Strong growth rates in the economies in South East Asia, South Asia, and Far East Asia strengthen Iranian, Arab, and potentially Palestinian leverage, assuming Iran or Arab nationalists back Palestinians as either Moslems or Arabs. (I know very little about Asian economies. I assume reasonably strong economies are most likely 70%?) The Asian economies provide important alternatives to the USA and Europe for the governments that oppose the outcomes of the US-brokered Israeli-Palestinian negotiations. Asian markets make it more possible for Iran to resist US containment efforts. They also play a larger role in GCC thinking and in turn weaken dependence on the USA. Asian and European states, typically see little at stake in Israel and important trade and commercial opportunities in Arab states and Iran. They are not inclined to pay the opportunity costs in these commercial relations that might follow from endorsing Israeli policies. Rising oil prices and strong economies in Asia make it much harder for the USA and Israel to keep together any coalition containing Arab (e.g. Iraq) or Islamic (Iran) power. If the capabilities of Iraq and Iran grow, this will enhance Palestinian leverage. It will make Israelis believe it is more necessary to deal with the Palestinian issue so Israel can focus on its major strategic problems.
The US will continue to stay deeply involved as the primary mediator (>75% likely). The commitment of this involvement keeps other potential major powers out. The Europeans disagree with US policy but defer to the US and will stay in a secondary role as long as the US insists on this. Russia and China have other issues vastly higher priority to deal with when they negotiate with the USA. They will not compete with USA here.< Both China and Russia will annoy the USA by pursuing commercial relations with Iran, Syria and someday Iraq. But they are unlikely, 30% chance, to commit resources enough to change the essential leverage relationships As long as the USA is deeply involved as the only great power committed to the exercise of influence here, the likelihood of a major conventional war is low. (<25%). No combination of Arab or Moslem coalition could meet the US + Israeli fire-power. Arab coercive options in this condition are limited to terrorism, subversion of Arab regimes seen as US clients (e.g. Saudi Arabia), and the development of infrastructures that in the future will sustain the deployment of weapons of mass destruction. There is little chance (>25%) that an Arab leader will be able to mount a credible "peace through strength" coercive option vis-a-vis Israel as long as the US stays deeply involved as the sole superpower in the bargaining process. The persisting USA role will increase Israeli confidence that autonomy minus can be sustained as a outcome vis-a-vis Palestinians. There is a small chance (>25%) that the USA will disengage from the Israeli-Palestinian issue. If a crisis in Asia, great power relations, or some other theater demanded attention and massive resources, then the US might disengage. A new isolationism or sense of America first will reduce Congressional willingness to spend on defense commitments in general including in the Middle East. This will erode US capability but not enough to change the bargaining leverage between Israel and Palestinians. The costs of policy in this area are not high by federal budget standards and domestic support for Israel can sustain the support. Presidential threats to withdraw from the issue have little credibility with Israeli leaders and will not move them. I see no likely medium term change on the US domestic front that would alter this strong support for the current engagement.
V. Regional Forces that will affect longer-term outcomes
The most (60% - 70%) likely course in Egypt is continued alliance of the military and state technocrats and selected business concerns. The authoritarian system will hold against mounting social problems, fueled by population growth, urbanization, and corruption among other things. This situation produces opposition to the government among secular Nasserites and mainstream Moslem Brothers. Arab nationalist and Islamist identity with the issues in Palestine is sufficient that most public groups will not have anything to do with Israelis or the normalization. The autonomy minus outcome in the Israeli-Palestinian negotiation will only fuel these sentiments. Boycotts on Israeli-Egyptian projects will continue. Mubarak's government will not press the issue but let people let off steam this way. But Mubarak understand's Egypt's weakness and its dependence on the US. He will criticize the Israeli-Palestinian outcome and say more should be done but he will be unable and unwilling to do anything substantial about it. He will stay part of the process and live with the Cold Peace concentrating on his domestic problems. There is a chance (>30%) that Mubarak's domestic alliance will falter. Army elements could join with Nasserites, Moslem Brother or both to former a new government. It would voice more anti-Israel sentiments. In the short run it could not change the bargaining balance between Israelis and Palestinians. If the new government changed course in any meaningful way on the Israeli-Palestinian issue it would face stiff US retaliation, most likely the sort of cold shoulder Iran received and receives still today. Consequently, the new regime would need to either stay the course or face sharp reduction in its capability, in both cases the effect on the Israeli-Palestinian negotiations would be limited. In the longer-run, in alliance with Syria and perhaps Iraq and even Iran, such a new regime could mount a serious change in the strategic environment. It would strength Palestinian leverage by making Israelis more aware of broader strategic threats. But this would change the bilateral negotiations between Israel and Palestinians only if Palestinians were willing to settle separate from the new Arab or Islamic alliance. It is possible in this new environment, the Palestinian issue would shrink to secondary status as people who today call themselves Palestinians joined and subsumed themselves in the broader Arab or Islamic war against Israel and the West. The most likely (75%) course in Iran is that its current policy will persist. That is, the new regime will oppose the terms of the Gaza-Jericho agreement as unfair to Moslems. It will call on Moslems to resist Israeli and US pressure and fight for better terms, nothing short of two-states. It will support Hamas and Islamic Jihad and take pride in its monetary assistance. This assistance, however, will not be any where near enough to sustain a new intafada or overthrow Arafat and the PNA. Despite the sympathy for the Palestinian cause there are real limits to Iran's support. Iran is much more interested in the Lebanese shi'a than the mostly sunni Palestinians. Most Iranians are not very interested in the Arab-Israeli issue any way. They are traditional adversaries of Arabs and many can recall when Israel and Iran were strategic allies. Even if Iranian leaders had the capability to do more, they would face domestic constraints in Iran and they don't have the capability in any case. Tough talk and rather small amounts of money will continue. It will play into Likud's hands and reinforce the autonomy minus outcome. The talk will upset Israelis and push opinion toward Likud, give Likud ammunition to mobilize continuing US support, and keep attention focused on terrorism. Iran's nuclear program will reinforce this effect and produce US and Israeli plans for preventive military attacks on nuclear facilities. There is some chance (>25%) that Khatami's election will be followed by a change in Iranian policy toward the USA and Israel. He might end the rhetorical policy of condemning the Gaza-Jericho agreement and subsequent bargaining process. After all, this is not an issue most Iranians care about. Iranian policy in other regional conflicts has been very pragmatic, e.g. Tajikistan, Azerbaijan, Chechenya. He is very unlikely, however, to give up support for Hizballah and probably cannot turn around Iran's nuclear program. Khamene'i will continue to rail against Israel and the US no matter. Khatami is most likely to direct his attention to Europe and Asia where he will be successful. This will allow Iran to countervail against US pressure without capitulating on key items like Jerusalem for Moslems, shi'a Lebanese should be free of Israeli occupation, and Iran should be allowed to abide by IAEA rules and enjoy the fruits of nuclear energy. If he gives on any of these three issues that the USG says are central, then he will pay too high a price at home and be stymied by the Majlis. It is also unlikely Clinton can change the contradictory US attitudes in the Congress on these issues, even if he was persuaded to do so, which I doubt he will be. If Khatami did change course and abandoned the Palestinian cause it would have no noticeable effect on the bargaining process. Hamas and Islamic Jihad have sufficient other sources of income from rich individuals and other organizations that the sort of small scale terror they can inflict would continue. The PNA already has no effective leverage, it would simply have still less. I suppose in the still longer-term, 5 - 10 years Iran might have deliverable weapons of mass destruction. It could also adopt a forward policy. Today it is almost entirely preoccupied with economic reconstruction from the 1980s war. I will not try to develop the possibilities for these scenarios here but leave it for another round of prediction making.
Mostly likely (65%) Saudi Arabia will hold to the current status quo policy. More public pressure mount due to population, urbanization, and unemployment. This pressure will be met by coercion and held in check. The regime will not endorse the autonomy minus outcome in the Israeli-Palestinian bargain but do nothing to challenge it. The Saudis will not let this issue interfere with their US relationship. They also will not lean out very far to support Israel or lead Arabs in the Gulf toward normalization with Israel. They will listen to US suggestion in this regard and not follow up on them. The US will not force the issue. Saudi Arabia is likely to continue to support the PNA. This will parallel US and Israeli policy in terms of providing material benefits to Palestinians through the PNA. The ideas will be to win over the Palestinians with material payoff, seen as coming from the PNA, in compensation for the PNA nationalist failure to achieve statehood. The King and the next King Crown Prince Abdullah will support that, especially if terrorism continues to be a problem in Saudi Arabia. There is some chance (>35%) that either (1) Abdullah as King will pursue an Arab nationalist course or (2) that the kingdom will be transformed into a revolutionary anti-western republic. These actually are quite different outcomes. Abdullah as Arab Nationalist King might still be able to preserve the connection to the USA. The revolutionary regime probably could not. In either case, the mobilization of Saudi Arabian power behind Arab nationalist cause could have a large effect, especially if coupled with change in Egyptian policy. As with weapons of mass destruction the implications of such revolutionary changes are hard to predict and require more time than I can devote now. In the short run it would most likely reinforce Likud sentiments in Israel and terrify the Israeli public. This may increase PNA leverage if the PNA is prepared to make a deal with Israel separate from the new Saudi - Arab movement. In this case, the bilateral Israeli-Palestinian bargain would move quickly toward a two state outcome. If the PNA and Palestinians generally are swept up into the new movement, then their leverage as Palestinians will stay very low, as their identity shifts to Arab nationalist. We would then be making predictions about Israeli-Arab and not Israeli-Palestinian relations. Bilateral Israeli-Palestinian talks would collapse and Israel would enforce autonomy minus until the broader bargain emerged. If Iraq stays as it is, then it plays no role in the bilateral Israeli-Palestinian bargain. Iraq could be (40%) brought back into the Arab world and international community by Syria. Assad is already committed to two-states outcome and not much less on the Israeli-Palestinian issue. He is committed to full return of the Golan on the Israeli-Syrian front. The added leverage coming from a rehabilited pro-Syrian Iraq would reinforce Assad's current posture. His military ability to achieve this outcome would not change in the short -run. If Iraq descends into civil war, then it is very hard to predict what will happen. Turkey, Kurds, Saudi Arabia, Iran, Syria, Israel, the USA, and others may all get involved. Again the dramatic change huge scenarios I will leave for another future exercise. While such a civil war was underway, I suspect the Israeli-Palestinian issue would be blown off the global agenda. Who sides with whom and how the whole things turns out will effect post war scenarios. Predicting how things will look after a hurricane is probably a pretty messy business.
Given Syria's domestic situation, Assad needs Arab nationalist symbols to survive domestically. This has been his formula for years, I see no reason for him to change now. Although he can combine this with Islam as he has been doing lately. Consequently, given my prediction on the bilateral Israeli-Palestinian negotiation, I doubt there will be much progress on the Israeli-Syrian front. I suspect the current freeze will persist (75% likely). Assad will condemn the Likud policy and Washington's implicit acceptance of it, but Syria is too weak to make a big difference. With the US and Israeli focus on terrorism, this doesn't seem like a good time for the USG or Israel's government to pursue rapprochement with Syria. Hizballah will continue to fight, thus aggravating Israeli-Syrian relations. Neither Israel nor Syria has pressing need or incentive to change the current freeze in their relations. In the long-run, Syria in combination with Iraq, Egypt, revolutionary Arabia, & Iran might look different but these Tom Clancy type scenarios need to wait for another time when we have the energy to unpack them.
Global Economy
US engagement in peace process
Change in major regional states:
Egypt
Saudi Arabia
Syria and Israel