As the showdown at UN Headquarters continues this week with Abbas's bid to have a Palestinian State within its 1967 borders and with East Jerusalem as its capital admitted to the United Nations, the idea has been circulating that such a move is "futile" as it "would change nothing on the ground." This isn't entirely true, for one very simple reason: with few exceptions (and the Palestinian Territories aren't one of them) only States can be subjects of international law. An entity in the limbo-zone that the Palestinian Territories have been inhabiting for the last 60-odd years is in an entirely different position under international law than a State is. So how would Palestinian Statehood change life in the Occupied Territories?
Firstly, Statehood would fundamentally change the manner in which Palestine, and Palestinians, can interact with international institutions. Only States can fully participate in most international organizations such as the UN and its many subsidiary bodies. If admitted as a member of the UN, Palestine could theoretically be elected to the Security Council, which would give it a powerful lobbying position to push its own interests. Currently, this is an option that is open to Israel as a Member State, but not to Palestine as an observer. The same is true of other international organizations. The World Bank, for example, has funded projects in Gaza and the West Bank, but because they do not constitute a State, these territories do not have membership and cannot participate in many activities such as voting for the Bank's Executive Directors.
Statehood would also affect Palestine's interaction with judicial mechanisms. Only States may appear before the International Court of Justice (ICJ). In regards to the Palestine-Israel conflict, this is something a moot point, because Israel does not accept the compulsory jurisdiction of the ICJ. It could still, however, choose to allow a matter to be decided by the ICJ on an individual basis. It is questionable whether in this scenario, Palestine could demand reparations for past damages for civilian casualties and settlements built on their territories, given its lack of Statehood at the time these actions were committed. However, settlement via the ICJ would become an option - if one that Israel is unlikely to take up - for future disputes. As long as Palestine is not a State, it isn't one. Futhermore, while the Palestine-Israel conflict is certainly a focal point, it is not the only relationship in the world. Statehood would allow Palestine to appear before the ICJ vis-à-vis other States to resolve any international disputes in a peaceful manner.
Secondly, Statehood would positively benefit Palestine's trade options. There are substantial oil and gas fields in Gaza's waters. Palestine (and certainly the citizens of Gaza) have often been cut out of the opaque negotiations for developing these fields. If Palestine were to become a State, its sovereign authority to sign binding contracts would be much more clear and development of the fields could be conducted on a more transparent basis. Moreover, the government of Palestine would be able to easily access the generated revenues to aid the economic development of the Palestinian State and reduce energy-dependency on Israel.
Statehood would also facilitate other trade deals. While a State can sign a trade agreement with anyone or anything, the Palestinian Territories, as an ill-defined entity, are not the most confidence-inspiring business partner. Palestinian Statehood would put an end to much uncertainty on this front and give Palestinians a greater chance of closing profitable trade contracts with other nations and private corporations.
Thirdly, Statehood would improve Palestine's diplomatic relations with other States. Currently, Palestine does not have embassies in many Western nations, but rather General Delegations. If accepted as a Member State to the UN, it is likely that many of these nations would open more full diplomatic ties with Palestine, including the establishment of proper embassies with full diplomatic rights. This would elevate Palestine's diplomatic status and allow it to strengthen its trade and cultural ties with these wealthy and powerful nations. Furthermore, Palestinian passports, which inhabit a twilight zone of being "something-like-a-passport-but-not-really", are not universally acknowledged. Were Palestine an internationally recognized State, its passports would also be more widely respected, as a matter of course. This would permit millions of people more free travel throughout the world, instead of the bureaucratic hassle they are often forced to endure.
Lastly, Statehood for Palestine would affect the Palestine-Israel conflict. Israeli forces would not be able to enter Palestinian territory without injuring Palestine's sovereignty, an internationally wrongful act, which often entails reparations. Any violent incursion on the territory of either Party by the other would also violate Art. 2(4) of the UN Charter and possibly entail Security Council action under Chapter VII.
In this sense, Statehood for Palestine would also have benefits for Israel.While any party to a conflict has obligations under international humanitarian law, it has been fairly easy for Palestinian authorities to claim that they do not have control over combatants on their territory. While Israel has often claimed that its actions are "justified", it has obviously not been able to distance itself from the actions of its own soldiers. Due to the asymmetrical nature of the conflict, Israel has been left without any clear target to defend against following a violent attack on its own territory, leaving it the choice of doing nothing (and looking weak) or making a general crackdown (and looking like a bully). In the event of Palestinian statehood, Palestine could either choose to have its own army, or simply (like Costa Rica) have none. If it were to choose to have an army, it would have to obey international rules such as wearing uniform. Any open conflict between Israel and Palestine would thus have the character of a conventional war with more clear parameters. Even in the event that Palestine should choose not to have an army, its government could be called to task if it were to permit armed action against Israel to occur from within its territory. In this event, Israel could utilize the full-range of diplomatic, trade and court mechanisms available (including Security Council action) against a clearly identifiable State actor, to prevent or punish violent action directed onto its territory.
These are just a few of the consequences that full Statehood would have on Palestine's international relations. Statehood may not automatically end the conflict in the Middle East, but it would put the Parties to it on a more equal footing in their dealings with international institutions and other States, and this is why it is hardly a cosmetic or symbolic move.