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Results of Economic Analysis of the Five Scenarios

• A two-state solution provides by far the best economic outcomes for both Israelis and Palestinians. Israelis would gain over two times more than the Palestinians in absolute terms — $123 billion versus $50 billion over ten years.
• But the Palestinians would gain more proportionately, with average per capita income increasing by approximately 36 percent over what it would have been in 2024, versus 5 percent for the average Israeli.
• A return to violence would have profoundly negative economic consequences for both Palestinians and Israelis; per capita gross domestic product would fall by 46 percent in the West Bank and Gaza and by 10 percent in Israel by 2024.
• In most scenarios, the value of economic opportunities gained or lost by both parties is much larger than expected changes in direct costs.
• Unilateral withdrawal by Israel from the West Bank would impose large economic costs on Israelis unless the international community shoulders a substantial portion of the costs of relocating settlers.
• Intangible factors, such as each party's security and sovereignty aspirations, are critical considerations in understanding and resolving the impasse.
• Taking advantage of the economic opportunities of a two-state solution would require substantial investments from the public and private sectors of the international community and from both parties.