First, Netanyahu demanded (full text of speech) that the Palestinians recognize that “the state of Israel is the national homeland of the Jewish people.”

Netanyahu should understand that, in the integrated, globalized world, this condition is difficult to comprehend not just for the Palestinian people. After all, 20 percent of the people now living in Israel are not Jewish in the religious or ethnic sense of the word. So how would the government of Benjamin Netanyahu recognize other religious groups – Christians, Muslims, Buddhists and Hindus – who presently call the state of Israel home?

Former US President Jimmy Carter, who last week met with Hamas leaders in Gaza, agreed that the stress on a Jewish state is difficult to comprehend given the demographics of the region.

“He … demands that the Palestinians and the Arabs recognize Israel as a Jewish state, although 20 percent of its citizens here are not Jews. This is a new demand,” Carter said.

It is easily imaginable what kind of uproar there would be if the United States of America, the world’s “melting pot,” one day pronounced itself a “Christian Nation.” American Jews, which comprise the largest non-Christian religious group in the US, would predictably be the first ones to protest the pronouncement. In addition to a robust Judaic community, American Jews are given vast political clout in the American Israeli Public Affairs Committee (AIPAC), which is the largest foreign lobby group in America.

Carter, a Nobel Peace Prize recipient for his work “to find peaceful solutions to international conflicts,” added he believes Netanyahu has “raised many new obstacles to peace that had not existed under previous prime ministers.”

Farewell to arms

Another condition that the Palestinians must meet before the government of Benjamin Netanyahu will consider them a separate, sovereign nation is for them to lay down their arms.

“Any area in Palestinian hands has to be demilitarized, with solid security measures,” Netanyahu said. “Without this condition, there is a real fear that there will be an armed Palestinian state, which will become a terrorist base against Israel… We cannot be expected to agree to a Palestinian state without ensuring that it is demilitarized.”

But the condition on demilitarization goes even further.

“No army, no control of air space,” Netanyahu added… “The Palestinians cannot make military treaties.”

It sounds like Netanyahu has already written the constitution for the Palestinian people. It only remains to be seen if the Palestinians will be able to deliver their own mail, or bake their own bread.

For Netanyahu to demand that the Palestinians have “no control of air space” sounds preposterous. Israel enjoys all the financial advantages of an international airport (tourism, businessmen, repatriates), so why can’t a future Palestinian state also enjoy such privileges? As long as ‘control of air space’ is not a pretense to lob missiles into Israeli territory there should be no such condition. Yes, at this stage there remains the question as to exactly where to place an international airport, or air force, but that is merely a theoretical consideration.

Another former US president, Bill Clinton, who during his presidency had more than one late-night debate with the Israeli prime minister, did not put much hope in Netanyahu’s speech.

Before hailing Netanuyahu for “going on the record as open to some two-state solution,” he added that the conditions the prime minister set down would be “completely unacceptable to the Palestinians.”

Netanyahu’s brief comment on Jerusalem, which the Palestinians see as the capital of the future homeland, was enough to break the camel’s back: “Whenever we discuss a permanent arrangement, Israel needs defensible borders with Jerusalem remaining the united capital of Israel (Applause).”

Jerusalem is home to the Temple Mount, a religious site in the capital city that has tremendous religious significance to adherents of Judaism and Islam.

And on the final sticking point – Israeli settlements in the West Bank – the issue promises to only worsen.

Last month, during Netanyahu’s trip to Washington, it seemed that Washington was finally getting serious about the ongoing construction settlements, an issue that Israel has ignored since 1967. Now it looks like Netanyahu has called Obama’s bluff.

“The US administration is prepared to show flexibility on construction in West Bank settlemts,” reports Haaretz, quoting a government source in Jerusalem. “The Americans will apparently not demand a full freeze on construction, but will agree that projects now underway can be completed, Israeli officials say.”

How “projects now underway” will be interpreted by the Israeli side is anybody’s guess. Will settlements on the drawing board be considered acceptable?

Netanyahu accomplished two things in his speech: first, he got the uncooperative Democrats in Washington off his back by uttering ‘Palestinian state,' and despite a long list of conditions that the Palestinians will never agree to. Second, Netanyahu, at least for those who don’t read very deep into the news, comes across as a genuine initiator of peace, and if the effort fails, well, nobody can say he didn’t try. We can always blame the Palestinians. Washington is not complaining too much because it got a face-saving utterance from the Israeli leader, which gives Obama’s nascent foreign policy a better-than-average grade.

The Switzerland of the Middle East?

In conclusion, let’s imagine that the Palestinian people do the totally unexpected thing and agree to Netanyahu’s tough conditions for statehood. They agree to demilitarize, lose control of their air space, ignore the encroaching settlements, as well as that looming security fence, and even cede Jerusalem as their capital. What is left? Well, how about international banking? Why not? After all, it has worked marvelously for tiny Switzerland (under a totally different historical setting, it must be said).

Switzerland’s economy is energized by corporate powerhouses, such as UBS AG, Zurich Financial Services, Credit Suisse, Swiss Re, Nestle, Novartis and The Swatch Group. And a big reason these companies continue to call Switzerland home is the low tax base. Companies hate to pay taxes. Generally speaking, Switzerland is for the Europeans what the state of Delaware is for the Americans. Today, the Swiss are the proud owners of one of the world’s strongest economies, not to mention some of the best chocolates in the world.

And then there is Swiss banking. Switzerland attracts the world’s money thanks to a banking system that is characterized by privacy and the protection of clients’ assets and identity. The nation’s tradition of banking secrecy dates to the Middle Ages. The Bank of International Settlements, a quiet organization that facilitates cooperation among the world’s central banks, is located on an unpretentious street in the city of Basel.

Presently, about one-third of all funds held outside their country of origin (more notoriously known as ‘offshore funds’) are held in a vault somewhere in tiny Switzerland. That sounds like a job any small country could get into with the right backers. After all, banking today is pretty much a virtual business that only requires a lot of computers and vaults. And security guards, too, which could give Hamas something to do with their guns.

And with Israel and the Arab world having no lack of wealthy individuals, why not let a neutral Palestine serve the banking and financial needs of the Middle East? One-stop banking for everybody right next door. It would promote what is sorely missing in the region, trust, and provide an incredible boost to the local economy.

Finally, the neutral Switzerland of the Middle East (see a similar plan for Lebanon), with the full recognition of the international (and banking) community, would never have to worry about lifting another weapon again. It would have the full support of the United Nations.

But only after a realistic plan for peace is on the table can these chocolate dreams become reality. Unfortunately, few could consider Netanyahu's plan for Palestinian statehood a realistic proposition.

Robert Bridge, RT