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If you ever questioned whether Israel's occupation of the West Bank and Gaza was bad for the United States and for Israel too, you ought to ponder Turkey's decision to suspend a multinational air-force exercise last weekend. Why? Because it's a prime example of how pursuing the goal of "greater Israel" -- which means retaining control of the West Bank and Gaza and preventing a true two-state solution -- is undermining U.S. and Israeli interests.

Here's the background: For the past decade or more, Turkey has been Israel's closest ally in the Muslim world. It has bought a lot of weapons from Israeli defense manufacturers, permitted the Israeli Air Force to conduct military exercises over Turkish airspace (which is especially valuable given Israel's small size), and been an effective mediator between Israel and some of its adversaries. It was by all accounts a very valuable relationship.

Unfortunately, Israel's assault on Gaza back in December and January appalled many Turks and embarrassed the Turkish government, which had been helping facilitate back-channel negotiations between Israel, Syria, and Hamas. Turkish anger at Israel's behavior led to the infamous spat between Prime Minister Recip Erdogan and Israeli President Shimon Peres at Davos in January, and opposition to the proposed air exercise -- which would have involved U.S., Israeli, Turkish, and other NATO forces -- had been growing in recent months. In particular, critics argued that Turkey's armed forces should not be collaborating with the same air force that had pummeled the defenseless Gazans last winter.

Last weekend, Turkey announced that it would not permit Israel to participate in the planned exercise, with the Foreign Ministry explicitly invoking the situation in Gaza as justification. (There's a story in Ha'aretz today suggesting it was really a dispute over arms shipments, but that's frankly pretty hard to believe). The announcement led Israel's ever-compliant U.S. patron to declare that it would not participate either, which in turn led other NATO states to withdraw too. So the exercise was "postponed," and it remains to be seen whether the dispute will be resolved and the maneuvers rescheduled. Meanwhile, Turkey and Syria held a successful diplomatic meeting earlier this week and announced a wide-ranging series of agreements, publicly pledging to "build a common future." Ha'aretz reports that the two countries will conduct military exercises in the near future as well.

Now step back and consider how we got here. A good relationship with Turkey has been a major asset for Israel and strong Israeli-Turkish relations are good for the United States (which is an ally of both countries). The United States, Turkey, Israel, and other NATO countries benefit from joint military exercises. But because Israel continues to occupy the West Bank and Gaza and refuses to allow the Palestinians to have a state of their own, it faces continued resistance from groups like Hamas, including the firing of rockets at Israeli towns. And because Israel's leaders believe that disproportionate force is the only way to deal with that resistance, the result is Operation Cast Lead, where the IDF lays waste to Gaza and kills a lot of innocent civilians. And this inflames public opinion in Turkey (and elsewhere), thereby placing a valuable strategic relationship at risk.

Israel's defenders often claim that it is a major strategic asset for the United States, but Israel's pariah status within the region reduces its strategic value significantly. It explains why Israel could not participate in the 1991 or 2003 wars with Iraq, and why it is difficult for Arab governments who share Israel's concerns about Iran to openly collaborate with Israel or United States to address that issue. And make no mistake: The occupation is now the main barrier to Israel's full acceptance within the region, as the 2007 Arab League peace plan makes clear. If the Israeli-Palestinian conflict were resolved and Israel had normal relations with the Arab world, then the United States would not pay a diplomatic price for backing Israel so strongly and Israel could join forces with us (and with other regional powers) when common challenges arose. Ending the occupation would also safeguard Israel's relations with countries like Turkey, instead of undermining them. In addition to its obvious human costs, in short, the occupation is a strategic liability for Israel and the United States.

Barack Obama spoke the truth when he said that a "two-state solution is in Israel's interest, the Palestinians' interest, America's interest, and the world's interest." Unfortunately, the U.S. president's actions to date have not brought that goal any closer. In the meantime, those who continue to oppose any effort to use U.S. leverage to bring about a two-state solution are unwittingly harming the two countries they care about most.

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I finally got a chance to watch the fascinating video of the now-infamous Davos panel featuring Turkish Prime Minister Recip Tayyip Erdogan and Israeli President Shimon Peres, which ended with the Turkish prime minister walking off and declaring that Davos was over for him. He was upset because moderator David Ignatius had permitted Peres to speak twice as long as the other participants and then didn’t give Erdogan much time to respond. (The panel was already overtime and dinner was waiting). Erdogan returned home to Turkey and was reportedly greeted by large crowds of enthusiastic supporters. In response, Turkish flags have been displayed in Gaza.

Having now watched the panel in its entirety, here are a few quick reactions:

1. First, whoever established the format of the panel blew it big time. This wasn't some academic gathering on an obscure topic: it was a panel featuring two heads of state, the U.N. secretary-general, and the secretary of the Arab League, dealing with an obviously explosive issue. Arranging the order so that Peres would go last and giving him twice as much time to speak was bound to spur resentment. Equally important, it meant that there was no time for the audience to ask questions or for the panelists to engage in any back-and-forth with each other. Given the personalities involved and the topic itself, it was unrealistic to expect the participants to sit quietly and listen to each other's remarks and then head obediently off to dinner.

2. Three of the four panelists -- Erdogan, U.N. Secretary-General Ban Ki Moon, and Arab League secretary Amr Moussa -- were sharply critical of Israel's conduct during the recent clash in Gaza. None of their formal remarks struck me as especially heated, however, and none expressed significant support for Hamas. All three stressed the need for renewed peace efforts, with Amr Moussa emphasizing the importance of the 2007 Arab League peace initiative.

3. Erdogan's formal remarks made it clear he was upset by Israel's decision to launch the Gaza operation without informing Turkey beforehand. This is an important issue for him, because Israeli PM Ehud Olmert visited Turkey just before the attack was launched and because Turkey has been mediating indirect talks between Israel and Syria and probably has indirect contacts with Hamas. Israel's assault on Gaza made Erdogan look like something of a dupe, and so his irritation was to be expected. Erdogan also made some pointed remarks about the operation itself, although his remarks didn't strike me as crossing the bounds of civility.

4. Given the balance on the panel, one can perhaps understand why the organizers let Peres go last and gave him twice as much time to speak. (The first three panelists got about 10 minutes each; Peres was given 25 minutes for his own remarks, which pretty much used up the hour allotted for the session). But Peres's response was far more heated and combative than the remarks of the other participants, and as Richard Silverstein notes here, it also contained a fair number of dubious claims. For example, Peres claimed that Hamas had never won a democratic election, and that Israel had not formally responded to the 2007 Arab League peace plan because Iran (which is not part of the Arab League) was trying to dominate the region. Instead of sounding statesmanlike and reasonable in Israel's defense, Peres came off as angry and defensive. And I couldn't help wondering what the audience thought -- it didn't strike me as a performance likely to win over very many people.

5. It is also easy to understand why Erdogan wanted a chance to rebut, and why he resented moderator David Ignatius's efforts to bring the panel to a close and hustle everyone off to dinner. Given Turkish public opinion, it would have been extremely difficult for Erdogan to simply sit quietly and absorb Peres's heated remarks without saying a word. Had the situation been reversed, I would have expected Peres to insist on an opportunity to reply as well, especially if he had to run for office anytime soon. It wasn't polite of Erdogan to ignore the moderator's well-intentioned efforts to stick to the program, but his reaction was hardly surprising.

6. The real significance of the exchange is what it tells you about public opinion in Turkey, as well as the potential effects of democratization in the broader Middle East. I think Erdogan was genuinely angry, but his anger reflected Turkish opinion as well. His performance at Davos is bound to help his image in Turkey itself, and could help his party perform well in local elections scheduled for March 2009. Given that Turkey has been Israel's main ally in the Muslim world, this shift is not good news for Israel. And if more and more governments in the Middle East become responsive to the will of the people (whether or not they become Western-style democracies), it is going to be more difficult for ruling elites to do nothing in the face of Israeli actions like Gaza, no matter how much foreign aid these regimes get from Washington.

7. Last comment: I'll bet David Ignatius felt terrible, but it really wasn't his fault.

Photo: FABRICE COFFRINI/AFP/Getty Images

What's the biggest problem facing the world today? Most people would probably say the downward spiral of the global economy. Over at the World Economic Forum in Davos, Steve Schwartzman, chairman of the Blackstone private equity group, said "Forty percent of the world's wealth was destroyed in last five quarters. It is an almost incomprehensible number."  NewsCorp chief Rupert Murdoch warned "the crisis is getting worse” and said that fixing it "will take a long time." 

Former Israeli Prime Minister Benjamin Netanyahu -- whose Likud Party is leading the current polls in Israel -- begs to differ. According to the Associated Press, Netanyahu told the Davos crowd that Iran's nuclear program "ranks far above the global economy as a challenge facing world leaders."

Why? According to Netanyahu, it's because the financial meltdown is reversible if governments and business make the right decisions. But "what is not reversible is the acquisition of nuclear weapons by a fanatical radical regime," he said, adding that "we have never had, since the dawn of the nuclear age, nuclear weapons in hands of such a fanatical regime."

There are plenty of good reasons to try to keep Iran from acquiring nuclear weapons, and it is easy to understand why Israelis are especially concerned about Iran's nuclear program. But Netanyahu's assessment of the relative importance of these two problems is just plain wrong, for at least five reasons.

First, let's be clear about the current state of play. Iran has no nuclear weapons today, and we still don't know for sure if they will ever get them. By contrast, the economic crisis is a reality now. Iran cannot build a bomb today because it has no plutonium or highly-enriched uranium (HEU). Its centrifuges are producing low-enriched uranium (LEU), but you can’t build a bomb with that. In theory it could enrich its LEU to weapons grade, but its LEU stockpile is under IAEA surveillance and the diversion would be detected (this turns out to be something the IAEA is very good at doing). As William Luers, Thomas Pickering, and Jim Walsh note in a sensible article in the latest New York Review of Books, if Iran wants a bomb, its choices "are to cheat and get caught or to kick the inspectors out." Unless Iran has a secret clandestine enrichment program up and running somewhere (which we’ve found no sign of up till now), it’s hard to see the current situation as anywhere near as serious as our economic problems today.

Second, Netayanhu is wrong to say that the world have never seen such a "fanatical regime" with nuclear weapons. Iran's government has many unsavoury qualities, and President Mahmoud Ahmadinejad has said some stupid and offensive things about the Holocaust and about Israel. But "fanatical?" By historic standards Iran's government isn't even in the top rank, and its foreign policy behavior is hardly irrational. Joseph Stalin was an even greater mass murderer than Adolf Hitler, and his successors were ruthless, ideologically-driven men with scant regard for human life. They had a large nuclear arsenal, and yet we managed to wage and win the Cold War against them anyway. Similarly, Mao Zedong was directly responsible for millions of deaths, and he also made a number of shockingly cavalier remarks about nuclear war. Indeed, Secretary of State Dean Rusk once told a Congressional committee that "a country whose behavior is as violent, irascible, unyielding and hostile as that of Communist China is led by leaders whose view of the world and of life itself is unreal." Yet Mao had the bomb and never used it; indeed, Chinese nuclear weapons policy has been quite circumspect for over forty years.

Third, it is remarkably self-centered for Netanyahu to declare Iran's program to be a greater challenge than the global recession. The economic crisis is already harming many millions of people around the world, and it is likely to have an enduring impact on how millions of people -- even billions -- live their lives. It will lower life expectancy, alter life-opportunities, change demographic patterns, and affect the tenor of politics in many places, probably for the worse. Just look at all the social and political ills spawned by the Great Depression and you get some idea what a protracted global recession might do today. Even if Iran did get nuclear weapons someday, that is mostly a regional problem rather than a global one. Iran's neighbors would have legitimate concerns, but does Netanyahu really think that this is a bigger issue than the world economy for the leaders of Brazil, Canada, Indonesia, Norway, Japan, China, Chile, South Africa, or New Zealand?

Fourth, let's not forget that Israel has several hundred nuclear weapons of its own, and Israel's American ally has several thousand of them. If Iran were to acquire a few nuclear weapons someday, it could not use them without triggering its own destruction. Iran's government may support terrorist groups like Islamic Jihad that employ suicide bombers, but Iran's leaders show no signs of being suicidal themselves.

Finally, the more panicked people sound about the prospect of an Iranian arsenal, the more that Iranians might falsely conclude that getting a few bombs might actually give them a lot of leverage. This sort of overheated rhetoric may also convince some Israelis that an Iranian bomb would be an existential threat and convince them to leave, which in turn might give some Iranians an additional reason to pursue that option. Ironically, by portraying a legitimate security concern as an imminent peril, Netanyahu and others of his ilk may in fact be undermining Israel's long-term future.

Netanyahu's remarks may help him win more votes back in Israel, but my guess is that didn't win him much sympathy in Davos. To a sophisticated crowd with a global perspective, I'll bet it sounded like special pleading, which is precisely what it was.

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