22/04/2013 09:35 BST | Updated 22/06/2013 06:12 BST

Why Israel Will Miss Fayyad and You Should Too

It may seem strange that Israelis seem far more concerned about the resignation of Palestinian Prime Minister Salam Fayyad than the Palestinians. Israelis, along with the US and European states, value Fayyad - a former IMF economist who has been focused on building a Palestinian state from the ground up and has shown little interest in posturing at the UN.

But it was these very same characteristics that left Palestinians cold. Appointed to his role in 2007 by a decree of Palestinian Authority President Mahmoud Abbas, and kept in place thanks to international pressure, polls showed he had little traction as an independent candidate. Lately his differences with Abbas had become increasingly explicit, and Fatah officials, frustrated at being kept away from the power and the money, worked to undermine him.

What explains Israel's appreciation of Fayyad? The cynical view was that Fayyad was a convenient lackey for Israel to 'subcontract' the occupation to. Perhaps some saw him that way, but I believe more Israelis liked Fayyad because he represented a different kind of Palestinian leader; one engaged in the practical work of building a Palestinian state that Israel could be at peace with.

I will never forget the experience of seeing Salam Fayyad address Israelis in Herzliya in 2010. Top level contacts between Israel and the Palestinians were almost completely frozen by Abbas after Netanyahu's election in 2009. It was unusual for Fayyad to make a public address to an Israeli audience, much less one which included Israeli Defence Minister Ehud Barak.

The atmosphere was electric. When he came in the room he was treated like a rock star, surrounded by flashbulbs. As this remarkable video shows, the audience of Israeli and international policy wonks, dignitaries and officials, gave him a rapturous applause before he even opened his mouth.

In his speech he asserted Palestinian rights as a Palestinian patriot. But his approach to achieving these goals was pragmatic. He worked to reform the corrupt administration put in place by Arafat and to build the institutions of a state, beginning with financial accountability and security forces that actually turned up for work and performed a function.

Fayyad was compared by Israeli President Shimon Peres to David Ben Gurion, Israel's founding Prime Minister and Peres's own political mentor. In Israel, the revered Ben Gurion symbolises determination, leadership, political skill, and above all a pragmatism for which the demands of establishing the state, even under occupation, justified many compromises. The comparison reflected something Israelis wanted to see in the Palestinians but seldom did: a desire to compromise on elements of the national dream in order to realise the pragmatic possibility of a viable state in the here and now.

The warm embrace Fayyad got from Israel, Europe and the US, did him no favours domestically. Fayyad's project also got limited concrete support from Israel in recent years. But this was a function of the failed relationship between Netanyahu and Abbas. Though Israel did sign an agreement with Fayyad last summer to improve economic cooperation, without a framework of political dialogue with Abbas, Netanyahu held back on moves that would significantly change the reality on the ground. When Abbas sought recognition at the UN, the method of Israeli and US retaliation - temporary suspension of financial transfers - harmed Fayyad and his project, to the detriment of both sides. Fayyad was dismissive of the UN endeavour, and when Abbas tried to involve Fayyad in another symbolic manoeuvre, dispatching him to Netanyahu to threaten the dissolution of the PA, Fayyad simply refused to go.

Fayyad is just one man. Perhaps he can be persuaded to stay, or can be replaced. But his isolation in the Palestinian political firmament sends a worrying message not only to Israel but to the international community. Absent the conditions for a final agreement, Palestinians seem more interested in trying to weaken Israel through diplomatic isolation, than Fayyad's path of incremental progress on the ground, which could create a functioning interim state and build trust for a future agreement. The deeper fear is that Palestinians have declining interest in creating the conditions and addressing the compromises for a peaceful two-state solution, in the misguided belief that the international community will ultimately force a one-state outcome, doing away with the Jewish state altogether.

If that is the case, statements like that made by John Kerry a few days ago, to the effect that time is running out for a two-state solution, are not helpful. If they are meant to focus the minds of the parties in getting to a deal, it assumes both parties are interested in a deal. If the Palestinians increasingly are not, such statements may merely encourage them to hold out against compromise.