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The Visionary

A Palestinian reformer’s downfall.

If you were to pinpoint one moment when it looked as if things just might work out for Salam Fayyad, the Palestinian prime minister, it would probably be February 2, 2010. That day, Fayyad addressed the annual Herzliya Conference, a sort of Israeli version of Davos featuring high-powered policymakers and intellectuals. It is not a typical speaking venue for Palestinians; yet Fayyad was warmly received. He sat in the front row next to Israeli Defense Minister Ehud Barak, who—just before Fayyad ascended the stage—whispered into his ear and grasped his hand in what appeared to be a show of genuine affection. When Fayyad reached the blue and white podium, he garnered an enthusiastic round of applause from the hundreds in attendance.

Standing five feet five in a charcoal suit with glasses, frog-like features, and thinning salt-and-pepper hair, Fayyad didn’t appear all that charismatic—and he didn’t sound charismatic, either. He spoke in jargon-laced English with a deep nasal monotone. But what he had to say was dramatic—even revolutionary.

Six months earlier, with decades of negotiations and armed conflict having failed to produce Palestinian independence, Fayyad had proclaimed a bold new strategy: Instead of waiting for Israel to grant them a state, the Palestinians would build it themselves—brick by brick, institution by institution. Fayyad’s “state-building program,” as it was known, had earned praise from the likes of Israeli President Shimon Peres (who called him the “Palestinian Ben Gurion”) and The New York Times’ Tom Friedman (who coined the term “Fayyadism” to describe “the simple but all-too-rare notion that an Arab leader’s legitimacy should be based not on slogans or rejectionism or personality cults or security services, but on delivering transparent, accountable administration and services”). Even some right-wing Israeli politicians had spoken favorably of Fayyad, especially when comparing him with Yasir Arafat or Hamas.

More significantly, polls showed that Fayyad was winning over Palestinians—and it was easy to understand why, since his policies were yielding results. With the world still in the throes of the global financial crisis, the West Bank economy had enjoyed two years of double-digit growth. Unemployment had declined as thousands of Palestinians went to work building new schools, health clinics, and government offices. Cities like Ramallah and Jenin, which became war zones during the second Palestinian intifada, had begun to assume an air of normalcy as masked gunmen gave way to newly trained Palestinian police.

At Herzliya, the subdued Fayyad came to life as he spoke of his state-building program. “That exercise that we have embarked on, related to getting ready for statehood, was described by some as a source of concern on grounds that it is—or represents—unilateralism by the Palestinians,” Fayyad said. “And I’m here to tell everyone”—he raised his voice and his arms—“that indeed it is! It is unilateral! As it should be! Because it’s about building a Palestinian state. It’s about getting ready for Palestinian statehood, and the state that is being built here is a Palestinian state. And, if we Palestinians don’t build it, who’s going to build it for us?”

At the time, negotiations had been frozen for more than a year. Yet Fayyad boldly predicted that his program would lead to the creation of a Palestinian state by August 2011. “By then, if in fact we succeed, as I hope we will,” he said, “it’s not going to be too difficult for people looking at us from any corner of the world ... to conclude that the Palestinians do indeed have something that looks like a well-functioning state in just about every facet of activity, and the only anomalous thing at the time would be that occupation, which everybody agrees should end anyways. That’s the theory.” As Fayyad finished his speech—saying that his people aspired “to live alongside you in peace, harmony, and security”—several audience members stood up to applaud. For a moment, anyway, just about everyone seemed to be rooting for Salam Fayyad.

LIKE MOST PALESTINIAN leaders, Fayyad spent much of his adult life outside the West Bank—but the similarities end there. While Mahmoud Abbas—the Palestinian Authority’s (P.A.) current president and Fayyad’s boss—followed Arafat and the Palestine Liberation Organization (PLO) from Jordan to Lebanon to Tunisia during the group’s terrorist days in the 1970s and 1980s, Fayyad was busy earning a series of degrees: getting his B.A. from the American University in Beirut, before moving to Austin, Texas, where he got an MBA from St. Edward’s University and a Ph.D. in economics from the University of Texas. Palestinian politicians, like Israeli ones, tend to be tough guys. Fayyad, by contrast, is bookish and nerdy. He has a habit of nodding—almost bowing—when he shakes hands with people.

By all accounts, Fayyad had no designs on public life. After three years teaching economics at Jordan’s Yarmouk University, he took a job with the International Monetary Fund (IMF) in St. Louis and, in 1996, became the body’s manager in the West Bank. When the hopeful atmosphere of the 1990s degenerated into a wave of suicide bombings and Israeli military reprisals in 2001, Fayyad was serving as the Arab Bank’s local director. As pressure intensified on Arafat to appoint a finance minister in the spring of 2002, Fayyad emerged as the logical candidate. “Everybody had a very high regard for him,” Elliott Abrams, who served in various senior posts in the Bush administration, told me. “We were constantly trying to raise money for the Palestinians. And what we heard from a number of Arab donors was, ‘Why should I give them money? He only steals it’—he being Arafat—so the advent of Fayyad was very important for us.”

“Of course, he had a particular appeal to President Bush because of his Texas links,” Abrams added. “People who’d met Arafat were very impressed by dealing with almost anyone else—for example, [Abbas], a guy who wore a suit and a tie, not a fake military uniform, and who was not in favor of violence. Fayyad was another step beyond that—he had a Ph.D. from the United States, he was a genuine economist, worked at the IMF. So he really talked our language.”

The Israelis also took a liking to Fayyad, who—in the rare moments when he spoke publicly about the conflict—unambiguously condemned terrorism against Israelis. Then–Israeli Prime Minister Ariel Sharon “viewed him very seriously,” recalls Danny Ayalon, a former Sharon adviser who is now Israel’s deputy foreign minister. “He saw him as a nation-builder, as opposed to the rest of the Palestinian leadership that were nation-destroyers and wanted to destroy the state of Israel.” Fayyad even became friends with some high-ranking Israeli officials, including Sharon’s chief of staff, Dov Weisglass. At the wedding of Weisglass’s daughter, Fayyad sat next to Sharon during the ceremony and struck up a long conversation.

It wasn’t just the Israelis and Americans who trusted Fayyad. In the West Bank and Gaza, he began earning a reputation as the “Mr. Clean” of Palestinian politics. He put the P.A.’s budget online and arranged for Palestinian security forces to be paid via direct deposit, in order to minimize the opportunities for corruption. After Arafat’s death in late 2004 and Abbas’s subsequent victory, some officials in Fatah— the secular-nationalist movement that had dominated Palestinian politics for decades—hoped that Fayyad would join their party. But instead, in the 2006 parliamentary elections, Fayyad teamed up with longtime Palestinian spokeswoman Hanan Ashrawi on a slate of secular liberals. Their Third Way Party won two seats in the 132-member Palestinian Legislative Council and quickly disbanded. “We did well given that we campaigned for one month only,” Ashrawi told me recently at her office in Ramallah, a day before I interviewed Fayyad. “The reason that not just the Third Way, but many of the left-wing parties, the smaller factions, didn’t do well was because of the extreme, extreme polarization. ... I’m sure if the situation was more relaxed and calmer, and if we didn’t face all these tremendous challenges, then people would sit back and say, ‘OK, now we need the reformers, the institution-builders, the democrats to take over.’ But, when they saw this polarization, it became either-or. It’s not, ‘Let’s look for the third option.’ It became, ‘If Hamas takes over, then the Islamic political parties have taken over and we don’t want that,’ or, ‘If Fatah takes over, then we will have more of the corruption.’”

In June 2007, the struggle between the two factions—then serving in a tenuous unity government—exploded into all-out civil war when Hamas seized control of the Gaza Strip. In response, Abbas dismissed the Hamas prime minister and picked Fayyad to lead an emergency technocratic government. Abbas “thought that to maintain national unity and to maintain hope of reconciliation, that the prime minister should not be Fatah,” Saeb Erekat, the chief Palestinian negotiator and a close Abbas confidant, told me. Fayyad was a logical choice in another respect: He was uniquely qualified to restore the international aid and Israeli security cooperation that had been suspended following Hamas’s election victory.

When Fayyad first came into office, Palestinians were still reeling from the second intifada. As bloody as that period was for Israelis—some 1,000 died in suicide bombings and military campaigns from 2000 to 2005—it was even more so for Palestinians: More than 5,000 died; the P.A.’s economy, not to mention its infrastructure, was devastated; and lawlessness reigned in the West Bank and Gaza Strip.

Now Gaza was lost to Hamas, but the West Bank, at least, was under Fayyad’s control. And, in his first couple of years in office, he set about stabilizing the territory. His government banned the public display of weapons. It also oversaw the creation of a new, streamlined security force that trained in Jordan under three-star American General Keith Dayton. “Dayton told us that the person who really was making it possible to train the security and police forces and then keep them honest, keep them dedicated to their task, was Fayyad,” Abrams told me. “It was Fayyad who was keeping them from being a Fatah hit squad. It was Fayyad whom they could turn to if somebody gave what looked to be an illegal order. It was Fayyad who actually went to the graduation ceremonies and gave them a kind of pep talk about their job being not to fight Israel, but to help build a Palestinian state from the ground up.”

The initial years of Fayyad’s premiership came at a rare moment when the agendas of the United States, Israel, and the P.A. aligned. In 2006, after Sharon suffered a stroke, his successor, Ehud Olmert, established a center-left government on a platform of withdrawing from most of the West Bank. As Olmert imposed a crippling siege on Hamas-run Gaza, he saw it in his interest to strengthen Fayyad and Abbas. Not long after Fayyad became prime minister, he and Israel cut a deal: Israel would grant amnesty to fugitives from the Al Aqsa Martyrs Brigades, the militant Fatah faction, provided that they lay down their weapons. In the West Bank, Israel also scaled back its aggressive campaign of assassinating Hamas leaders as the P.A. cracked down on the group on its own. Fayyad, in concert with Abbas, purged hundreds of imams and teachers with Hamas sympathies from the P.A. payroll. And the Dayton security forces arrested scores of Hamas operatives.

These arrests led Hamas to protest that Fayyad was doing Israel’s dirty work. And many Palestinians, above all Fayyad, complained about Israel’s continued nighttime raids into P.A. territory. But, for most in the West Bank, life got better. When I asked Ghassan Khatib, the top Palestinian government spokesman, to name Fayyad’s top three accomplishments, he replied, “The first is law and order, the second is law and order, and the third is law and order.” The newfound normalcy was a boon to Israel as well. As one senior Israeli official noted to me, it gave the Palestinians “something to lose.”

The atmosphere of cooperation with Israel also gave the Palestinians something to gain. In 2008, Israelis and Palestinians entered negotiations that came closer than ever to producing an agreement. Officials from both sides who took part in the talks speak today of how encouraged they were at the time. But, according to people familiar with his thinking, Fayyad had zero confidence in a quick deal. “He never had any faith in the negotiations,” Abrams told me. “He thought that [then–Secretary of State Condoleezza] Rice—and, to some extent, the president—were far too optimistic. And he was pushing us in these meetings to do more practical stuff on the ground. He thought that was more important, because he didn’t think there was going to be a Palestinian state in six months.”

ANY HOPES OF a swift end to the Israeli-Palestinian conflict evaporated in early 2009. In March, two months after the end of Israel’s bloody war against Hamas in Gaza, Benjamin Netanyahu returned to the prime minister’s office with one of the most right-wing coalitions in Israeli history. For Fayyad, the rise of Netanyahu was a problem, since he needed Israel’s help in order to reassure Palestinians that an end was in sight to the occupation. “What he’s asking from the Israelis is very simple: Provide a sense that the occupation is lifting. Provide the opportunity for the Palestinians to take ever-increasing control of their lives,” said Robert Danin, who headed the Jerusalem Office of the Quartet—representing the United States, the United Nations, the European Union, and Russia—from 2008 to 2010. “He wants to end the occupation, he wants a Palestinian state, but he’s about Palestinian self-empowerment, and he wants the Israelis to get out of the way.”

In some respects, they did. Faced with a transformed West Bank security environment, Israel dramatically reduced the number of checkpoints and other barriers to Palestinian mobility and allowed P.A. forces to deploy in new areas. But, on other fronts, Israel was less forthcoming. Part of it had to do with the Oslo Accords. Under Oslo, the West Bank was carved up into noncontiguous patches assigned either to Area A (where the P.A. has civil and security control), Area B (where Israel has security control and the P.A. has civil control), and Area C (where Israel retains full control). About 95 percent of Palestinians in the West Bank live in Areas A and B, but Area C constitutes roughly 60 percent of the territory.

Examples of where this would pose problems for a state-building agenda are not hard to come by. Less than a year after Fayyad took office, the P.A. partnered with private developers on the construction of a new town of 40,000 called Rawabi. The footprint was completely in Area A, but the proposed road connecting the town to Bir Zeit (and, by extension, to the West Bank highway system) ran through Area C, leaving the project’s fate in Israel’s hands. The road was approved this past January—after four years of red tape.

American officials encountered similar inertia when they approached Israel with ideas for gestures to strengthen Fayyad, most of which involved expanding Palestinian access to Areas B and C. One proposed measure involved granting Palestinian stone-masonry factories in Area A greater access to rock quarries in Area C. “They weren’t taking these kinds of steps,” former Obama administration Middle East envoy Dennis Ross told me. “Oftentimes, things would be looked at very carefully and sometimes they would take a lot of time. Unless there was a real serious push from the political level—and that required ongoing, active attention—then some of these things weren’t likely to take place.”

The inertia, Ross told me, was augmented by an ambivalence among Israeli leaders about the Fayyadist enterprise. “If you look at the security establishment, they look at people like Fayyad and the Palestinian security forces as being natural partners. If you look at others, you’ll see those who sort of feel like, ‘Why should we be assisting them in a state-building effort?’ And, if you look at still others, there’s a sense that, ‘Yeah, it makes sense for us to assist them, but the context should be right, too. We shouldn’t be doing it and looking like suckers, because the Palestinians are putting pressure on us.’”

On no question did Israel undermine Fayyad as badly as on settlements. Netanyahu, under pressure from the Obama administration, did impose a ten-month settlement freeze in the West Bank in late 2009. Then, for nine months, Abbas refused to join talks, demanding that the freeze include East Jerusalem—which the Palestinians claim as their capital. Ultimately, however, Abbas caved and agreed to return to the negotiating table. In September 2010, at a glitzy White House ceremony featuring Obama, King Abdullah of Jordan, and Egyptian President Hosni Mubarak, Abbas and Netanyahu appeared together to mark the resumption of direct talks. But, shortly thereafter, Israel allowed the settlement moratorium to lapse—and the negotiations quickly collapsed. It was a major blow to Fayyad. “The main criticism of Fayyad,” Ross told me, “is that he’s making the occupation palatable.” With settlement expansion resuming, this criticism stung more than ever.

BUT, EVEN AS Netanyahu was undermining Fayyad, Palestinian leaders were doing the same. In the spring of 2011, Abbas announced his intention to seek recognition of a Palestinian state through the United Nations. When a bipartisan congressional delegation met with Fayyad in Ramallah around that time, he made clear that he opposed the plan, according to three members of the delegation with whom I spoke. “What [Fayyad] said was that there’s this idea that Abbas has that we’re going to go to the U.N. And, even if we succeed and even if we declare a state and the state is voted upon by the U.N., then nothing on the ground is going to change. And, when nothing changes, the Palestinian people aren’t going to go to the U.N. to ask, ‘Why not?’ and they’re not going to go to Israel to ask, ‘Why not?’ They’re going to come back to us.”Fayyad, according to one member of the delegation, spoke about “the work he was doing on the ground in the West Bank while Abbas was busy jetting from one European capital to another to talk about the U.N. bid.”

The gambit—which unfolded at the United Nations in September 2011—did not succeed. And, by jeopardizing Israeli cooperation and U.S. funding, it made Fayyad’s job a lot harder. “From Fayyad’s perspective, all the U.N. bid did was rack up a huge tab on his institution-building credit card,” Hussein Ibish, senior fellow at the American Task Force on Palestine, told me. The bill arrived in October in the form of $192 million of frozen U.S. aid and another $100 million in tax and customs revenue that Israel refused to hand over. Faced with a budget crisis, Fayyad was forced to introduce an unpopular program of tax hikes and spending cuts.

Fayyad’s bigger problem, however, was the looming prospect of reconciliation between Fatah and Hamas. Following the arrival of the Arab Spring in early 2011, Palestinians in the West Bank and Gaza had taken to the streets to demand a unity government between Fatah and Hamas as a prelude to long-overdue elections. Facing a legitimacy crisis, Abbas obliged, signing a reconciliation agreement with Hamas politburo chief Khaled Meshal on May 5 in Cairo. Soon enough, the agreement fizzled, and, a year later, even after a second agreement, the unity government has yet to materialize. Still, for Fayyad, the prospect of a unity government has become a Sword of Damocles: When and if the two factions ever reconcile, he will almost certainly be out of a job. Resentment of Fayyad, after all, has become one of the few things on which many Hamas and Fatah officials can agree.

Why Hamas would resent Fayyad is no mystery. He is everything they hate— secular, pro-Western, abhorring of violence, and accepting of Israel. One of the three primary goals of his education platform—along with strengthening critical-thinking and language skills—was to combat extremism. In the West Bank, moreover, the P.A. security forces had sent the group underground. When I called a Hamas official during my recent trip to Ramallah to ask for meetings with any local group leaders, his response was a sign of the times: “They are afraid to meet with journalists.”

Resentment of Fayyad within Fatah is more complicated. There is an element of partisan politics, to be sure. “A lot of people in Fatah think, ‘Why should we have a non-Fatah man as prime minister of what is essentially a Fatah government?’” Nabil Shaath, a senior Fatah official, told me. “It’s like the Democrats appoint a non-Democratic president.” Fayyad also can be excruciating to work with. “He’s a fanatic micromanager,” one longtime Palestinian insider told me. “When he was trying to reconstitute the finance ministry, he was dealing with the minutiae of everything.” Abbas, said this source, “views Fayyad as one giant headache.”

But, above all, Fayyad is a threat to Fatah’s way of life. From his days as finance minister, Fayyad has taken on the patronage network upon which Fatah had thrived for decades. “He made everything transparent, and that meant taking away all the privileges,” Ghaith Al Omari, a former adviser to Abbas, told me. “So, if you were a Fatah apparatchik, you couldn’t just get your cousin a job or give yourself a bonus. There were new rules.”

Fayyad does have Fatah allies. “Some of them are positive, and they see him as playing a major role in nation-building and in gaining dignity and recognition for the Palestinian people,” Ashrawi told me. “Others say, ‘No, he’s an American plot to destroy Fatah,’ or something—whatever conspiracy theory there is.”

“I worry about him,” Ashrawi said. “He’s overworked, he’s done so much, and he’s been treated with tremendous ingratitude.” But, to many in Fatah’s old guard, Fayyad is the ingrate. “The fact that he was not referring to Fatah in his successes, and he was not acknowledging the political umbrella that Fatah was granting him, created this feeling of negativity toward him,” one senior Fatah official told me.

That negativity has been augmented by the conviction—held by this official and others—that Fayyad isn’t content as prime minister and wants to be president himself. It isn’t a crazy thought. In recent years, Fayyad has shaken more hands, kissed more babies, and cut more red ribbons than any Palestinian official. In a typical week, he takes at least two trips outside Ramallah. “Part of his appeal is that he doesn’t just go to major Palestinian cities, but to refugee camps, places in the Jordan Valley— areas that were generally forgotten by Palestinian officials —while Abbas sits in the Muqata,” George Washington University Professor Nathan Brown, an expert on Palestinian politics, told me.

Unlike Arafat and Abbas, who spent decades at the forefront of the Palestinian national struggle, Fayyad lacks nationalist credentials, and he has seized every opportunity to build them. He became a regular presence at the weekly demonstrations against Israel’s security barrier in the divided village of Bil’in. And, after his government instituted a boycott of items made in Israeli settlements—a boycott that infuriated some Israeli officials—Fayyad joined the thousands of volunteers who went door to door handing out leaflets explaining which Israeli products should not be purchased.

Fayyad, in short, is everywhere. It’s the least he can do to compete with Abbas, who (at least in Ramallah) is also everywhere—on billboards, on the sides of buildings, on the rear windshields of police cars—often alongside the number 194, because if Abbas's U.N. gambit had worked, Palestine would have been the 194th recognized member state.* With Fayyad enjoying high approval ratings—frequently higher than Abbas’s—some Fatah officials feel threatened by him. And they’ve seized every opportunity to embarrass him. Recently, for example, when I met with the unnamed senior Fatah official at his office in Ramallah, he pointed out that two ministers in Fayyad’s government had just been accused of corruption. (For alleged offenses committed before Fayyad’s premiership.) As our interview drew to a close, I told the official that I would be seeing Fayyad the following morning and asked him to suggest questions. The official offered the obvious ones—“Ask him if he’ll start his own party,” “Ask him if he’ll run for president”—and, as I was halfway out the door, added another: “Tell him, ‘You’re so admired in the West. Why is there so much corruption in your government?’”

“YOU HAVE TO understand that Doctor Fayyad likes to answer very long answers,” Fayyad’s foreign press coordinator warned me as we sat in the palatial greeting room outside his Ramallah office on a dreary Thursday morning waiting for him to arrive. It was January, and Fayyad was on his way back from Bethlehem, where he had attended midnight mass for Armenian Christmas.

As Fayyad and I sat down on the white sofa in his office—an austere room with (like all P.A. offices) twin portraits of Abbas and Arafat staring out from behind his desk—Fayyad slouched and told me, apologetically, that he was exhausted. “I’m doing [this] on less than two hours of sleep,” he said.

I began the interview, which lasted just over an hour, by relaying the question the Fatah official had urged me to ask the day before. Fayyad let out a rare chuckle. “That definitely is a selective evidence, selective review, with a verdict in mind already,” he said. When I asked why so many Fatah officials resented him, he tried brushing it off. “I wouldn’t really want to comment on why they have this attitude,” he said. “That’s for them to really comment on. I deliberately avoided getting into ‘They say, I say’ kind of operations. This is a very difficult and highly complex task as it is, and I thought it best from the very beginning to just ignore this completely.”

And yet it was clear that, with the pressure he was under—from Fatah, from Israel, from Congress, from Hamas, and now from a frustrated Palestinian public—Fayyad was beginning to crack. At multiple points in the interview, he asked—practically begged—me to skip a question or to strike something from the record. “Please help me out,” he said, leaning forward. “I agreed to the interview, but I really do not want to get into anything controversial.” When I asked about his opposition to the U.N. bid, he became visibly agitated. “Please do not characterize my position on this,” he said, raising his voice. “Can we skip this line? I’ve said enough about it before.” I moved on to my next question, but Fayyad interrupted. “But really,” he urged me, motioning his head in the direction of my iPad. “I’ve said enough about it before.”

Gone was the buoyant Fayyad who roused audience members from their seats at Herzliya. Gone was the unbridled optimist who had predicted less than two years earlier that, in 2011, “the birth of a Palestinian state will be celebrated as a day of joy by the entire community of nations.” In his place sat a man deflated by the hard realities of the conflict. In a sense, circumstances have taken Fayyad back in time—from the prime minister who would lead his people to independence to the finance minister struggling to balance the books.

While many continue to speculate about his political future, Fayyad claimed that it was the furthest thing from his mind. “I certainly do not intend to run for president,” he said in response to my query on the subject. But would he rule it out? “If you’re looking for that kind of—what do you call it in the United States? That famous ‘I will not ... ’” “A Sherman statement,” I said. “Sherman statement,” he continued. “If you’re looking for a Sherman statement, if that’s what you’re looking for, you can say that you have it.”

When I turned to the Fatah-Hamas reconciliation negotiations—which were heating up again at the time—and noted that he would be the foremost casualty of a unity government, Fayyad objected to my word choice. “Casualty’s not what really comes to mind in describing the act of leaving office after more than four-and-a-half years of doing what I’ve been doing under the conditions that I’ve been doing it under. Casualty’s definitely not the thing that comes to mind when describing my fate.” What does? Fayyad paused to think. “Relief, to be honest with you. I was able to contribute to the national effort at a time of serious crisis. The country was pretty much on the verge of complete disintegration in mid-2007. We did the best we could, and here we are. As soon as there’s readiness for a new government to take over, we’ll be more than delighted to turn it over to them.”

When I asked him whether he’d serve as finance minister in that government, as some were suggesting, Fayyad didn’t mince words: “I do not really view myself as an ATM for the Palestinian Authority.” Fayyad knows that, even as an ATM, he has limits. Congress could suspend aid at any moment. Israel could withhold customs revenue. And, despite his deep reservoirs of good will in Washington and Jerusalem, there is nothing he could do about it.

He described the last withholding crisis with Israel as something of a wake-up call. “I’m aware of more than one instance when the prime minister of Israel went to his cabinet thinking that he was going to get it resolved—more than one instance, I believe, three of them. ... And he could not do it,” he said. “It lasted a whole month. So I ask myself, ‘If, on something as basic as this, there is difficulty, even on the part of the prime minister, to get something passed by his own cabinet, imagine how much more difficult it’s going to be when we’re really talking about permanent-status issues.’”

With Hamas controlling Gaza, Abbas refusing to negotiate, and Netanyahu heading for almost certain reeleection, it does not seem likely that final-status negotiations will move forward anytime soon. Before Fayyad made order out of chaos in the West Bank, Israel felt that it could not negotiate under the threat of violence. But today, with peace in the West Bank, Israeli attention has turned elsewhere—to Iran, to Egypt, and to domestic issues. “It’s a sad commentary [that], just because things are calm, then there’s no interest in the conflict,” Fayyad told me. “But things are supposed to be calm. This is what I call normal.”

Meanwhile, by all accounts, Fayyad’s state-building project lies in jeopardy. Over the past few months, economic growth in the West Bank has slowed. Unemployment has ticked up. The P.A.’s deficit has soared. And any day, the Hamas-Fatah unity government could arrive, meaning the end of Fayyad’s tenure as prime minister.

Yet Fayyad seems to be clinging to any rays of hope he can find. Palestinians, he argued, are beginning to believe in themselves even as they lose faith in everyone else. He also cited some “interesting polls” showing that the Israeli public is well to the left of its current government on final-status issues.

Two years after Herzliya, Fayyad still seems to believe that he can convince Israeli leaders that his interests and theirs are one and the same. “There will come a time when an Israeli leadership has to sell an agreement to its public,” he told me. “Imagine how much easier it would be for that leadership if it’s able to assert to the public, ‘What is the argument about? It exists already.’” By “it,” he meant a Palestinian state. His voice faded as he repeated himself: “It exists already.”

I asked whether he’d made this case to Israeli officials when asking for confidence-building gestures. He had. “They say, ‘It makes sense.’ The most frequently used expressions are, ‘Makes sense,’ ‘We agree in principle.’ But, in my position, you have acquired certain experience that tells you there’s quite a bit of distance to travel between agreement and principle and having that translated into facts on the ground.”

Ben Birnbaum is a reporter for The Washington Times. This article appeared in the May 24, 2012 issue of the magazine.

* The article originally stated that the Abbas posters with the number 194 were referencing the U.N. General Assembly resolution Palestinians cite as giving refugees displaced during Israel’s 1948 War of Independence the “right of return.” We regret the error.