The Israeli-Palestinian conflict matters more to Australians and Indonesians than either country’s foreign policy elite previously acknowledged. So, Canberra and Jakarta should cooperate to help resolve it. They should articulate a joint vision of the two-state solution and build international support for it. That could encourage, shape and shorten future Palestinian-Israeli negotiations.
The cliche that no one can want peace more than Israelis and Palestinians was never really true. The conflict’s global impact is now obvious. It’s straining social cohesion in Australia and inflaming public opinion in Indonesia (and in Malaysia and even Singapore). Much of the Global South sees the question of Palestine as Exhibit A of Western double standards. Whether or not it’s true, that view makes it harder to defend the rules-based order, from Ukraine to the South China Sea. Because Yemen’s Houthis purport to be fighting for Palestine, efforts to counter their attacks on commercial shipping in the Red Sea and Indian Ocean have received minimal international support.
More states have a stake in resolving the Israeli-Palestinian conflict, but few have engaged with the gritty compromises of peacemaking, largely because Washington still dominates the process. Instead, most countries have focused their diplomatic energy on symbolic action at the UN and inconsequential rhetoric. The fact that conservative Arab states still routinely denounce Israel while quietly cooperating with it underscores the dysfunction in that division of labour.
Middle powers, including Indonesia and Australia, should work with the few positive trends that have emerged over the past two decades: more states willing to recognise Israel; more states willing to recognise Palestine; more states interested in Israeli-Palestinian peace; and more details added to the proposed two-state solution.
US-led peacemaking might be faltering, but since the 1990s it has delivered some genuine breakthroughs. In 2000, President Clinton’s Camp David summit collapsed in failure but it broke taboos and set parameters for continued Track 1 and Track 2 negotiations. Since 2020, the Abraham Accords have normalised relations between Israel and several Arab states, even as they sidelined the Palestinian issue.
Saudi Arabia will be key to future efforts. Riyadh was readying to recognise Israel before the 7 October Hamas terror attacks. But it’s now conditioning recognition—and cooperation on Gaza—on tangible and irreversible Israeli steps towards establishing a Palestinian state. That’s a revival of Saudi Arabia’s 2002 take-it-or-leave-it offer to Israel: recognition in return for a full withdrawal from the territories occupied in 1967. Riyadh should refine that blunt demand, drawing on Israeli-Palestinian negotiations since then to detail necessary compromises on both sides.
Saudi Arabia need not act alone. It could be backed by the Arab League or even the G20. Most G20 countries can now agree on many more details of the two-state solution than they could when the group first met in 1999. They could concur that the border should be based on the pre-1967 lines and, possibly, on the basis for territorial swaps; on demilitarisation of the Palestinian state; on Palestinian refugees being settled in the Palestinian state (rather than Israel); and on some special arrangements for Jerusalem.
Australia and Indonesia could bridge the gaps. They’ve often been on opposing sides of the issue but now appear more aligned. In April, Foreign Minister Wong raised the possibility of Australia recognising Palestinian statehood ‘as a way of building momentum towards a two-state solution’. Before 7 October, Indonesia was quietly seeking to establish diplomatic relations with Israel. As defence minister, president-elect Prabowo Subianto led earlier efforts to normalise relations.
Like the Arab signatories to the Abraham Accords, Indonesia has pragmatic interests in ties with Israel. In particular, Jakarta’s bid to join the Organisation for Economic Co-operation and Development will ultimately require the assent of all existing members, including Israel. OECD Secretary-General Mathias Cormann, an Australian, has reportedly sought to broker ‘a commitment from Indonesia to soften its stance on Israel in exchange for Israel waiving its objection’. But Indonesian recognition of Israel would now be domestically toxic.
Instead, Canberra should work with Jakarta to outline a joint vision of the two-state solution. This would see Australia detail the Palestinian state it proposes to recognise and Indonesia set out realistic conditions for recognising Israel. The potential diplomatic win should outweigh the domestic political costs for both governments. An Australian-Indonesian proposal could provide the nucleus for one endorsed by a larger group of states, perhaps including most members of the G20 or even the OECD.
How much difference would that make? It’s true that a peace agreement looks further away than ever. The Palestinian Authority is weak and divided. Israeli opposition to Palestinian statehood seems firmer than ever. But Israeli and Palestinian politics have always been shaped by the international environment. And both sides need international support: the Palestinians to build a state and Israel to protect itself from Iran and Iran’s proxies.
The impact of a middle-power peace initiative will depend on the work that countries such as Australia and Indonesia are willing to put into it.
