Why is there no peace in Israel? Over the past few weeks, two key leaders gave their views on the matter. To U.S. President Barack Obama, it is the fault of Israeli settlers. To Israeli Prime Minister Benjamin Netanyahu, it is the fault of the Arabs for refusing to recognize Israel’s right to exist as a Jewish state. Who is right?

“The United States does not accept the legitimacy of continued Israeli settlements,” said Mr. Obama to much applause in Cairo. “This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.”

But would peace be any easier without the settlements?

Mr. Netanyahu said no in his speech at the Bar-Ilan University on Sunday:

Those who think that the continued enmity toward Israel is a product of our presence in Judea, Samaria and Gaza, is confusing cause and consequence. The attacks against us began in the 1920s, escalated into a comprehensive attack in 1948 with the declaration of Israel’s independence, continued with the fedayeen attacks in the 1950s, and climaxed in 1967, on the eve of the Six Day War, in an attempt to tighten a noose around the neck of the State of Israel. All this occurred during the 50 years before a single Israeli soldier ever set foot in Judea and Samaria.

If settlements were really the root cause of the lack of peace, then surely peace would have been achieved before the settlements even existed.

Mr. Netanyahu pointed instead to a factor that has been in existence from the foundation of the modern nation of Israel until today. The Arab nations simply do not want peace with Israel.

“[W]e must be firmly connected to reality, to the truth,” said Netanyahu. “And the simple truth is that the root of the conflict was, and remains, the refusal to recognize the right of the Jewish people to a state of their own, in their historic homeland.”

If one side refuses to recognize the right of the other to exist, then no amount of haggling over settlements will help. The so-called occupation is not the issue. Israeli prime ministers have actually offered the Palestinians their own state, including half of Jerusalem. The Palestinians merely responded with violence.

In his speech, Mr. Netanyahu outlined several conditions for a peaceful two-state solution. The Palestinians must recognize the right of Israel to exist, and solve the refugee problem outside of Israel’s borders. The Palestinian state must be demilitarized. Jerusalem must remain the unified capital of Israel.

The Arab world’s reaction to Netanyahu’s offer proves what the fundamental problem is with the peace process. “Netanyahu’s demand that Palestinians recognize Israel as the Jewish state is ruining the chance for peace,” said Egyptian President Hosni Mubarak. “Not Egypt, nor any other Arab country would support Netanyahu’s approach,” he said.

Spokesman for Palestinian Authority President Mahmoud Abbas, Nabil Abu Rdainah, said that Netanyahu’s speech “torpedoes all peace initiatives in the region.”

Yasser Abed Rabbo, another Abbas aide, said that to recognize Israel’s Jewish character was “to become part of the global Zionist movement.”

One of Abbas’s senior negotiators, Saeb Erekat, said that Netanyahu “will have to wait 1,000 years before he finds one Palestinian who will go along with him with this feeble state.”

Erekat threatened that if Barack Obama did not force Netanyahu to stick with the U.S. road map for peace, then Obama would “close off the path of peace tonight and set the whole region on the path of violence, chaos, extremism and bloodletting.”

Statements like these make it clear why the peace process is not working.

Change in Israeli Policy?

Previously, Israel’s peace process was based on the land-for-peace formula. But Netanyahu’s speech could mark an important break with that position. Geopolitical analyst George Friedman said June 16:

[Netanyahu] did shift his policy dramatically. For, let’s say, the past 40 years Israeli policy has been land-for-peace; that in exchange for a peace agreement, the Israelis would withdraw. Netanyahu changed that position. He said, We have tried withdrawing from territories. We tried withdrawing from Gaza. The response was rockets. We’ve tried all sorts of maneuvers, all sorts of discussions. Every time we get close, it fails. The issue is not, in his mind, land-for-peace. The issue is the recognition of the right of Israel to exist.

As far back as 1996, Trumpet editor in chief Gerald Flurry wrote about a prophecy in Hosea 5:13 that states, “When Ephraim saw his sickness, and Judah saw his wound, then went Ephraim to the Assyrian, and sent to king Jareb: yet could he not heal you, nor cure you of your wound.” Mr. Flurry explained that the Hebrew word for “wound” indicates that it is referring to the peace process (for more information, see our free booklet Jerusalem in Prophecy). When Israel sees that the peace process is sapping its strength, it goes to Germany for help.

Israel could be starting to see its wound right now. “Many good people have told us that withdrawal from territories is the key to peace with the Palestinians,” said Netanyahu. “Well, we withdrew. But the fact is that every withdrawal was met with massive waves of terror, by suicide bombers and thousands of missiles.” The fruits show that land-for-peace hasn’t worked.

Israel’s relations with America are suffering. In contrast, after Netanyahu’s speech, German Chancellor Angela Merkel invited the Israeli prime minister to Germany. Watch for this relationship to blossom in the future.

Watch the peace process closely as Christ’s return draws closer. For more information on what to look out for, see our booklet Jerusalem in Prophecy.