Abstract
American foreign aid has been essential for both cementing and sustaining efforts to resolve the Arab-Israeli conflict since the 1970s. During the Oslo process, aid was designed primarily to build public constituencies to support the negotiations. However, aid quickly became a bandage for a deteriorating Palestinian economy weighed down by corruption, damaged by violence, and stifled by Israeli closures. Rather than serve its original purpose, aid became a crutch for an unsteady process that collapsed following the 2000 Camp David summit. Unlike in other Arab-Israeli negotiations, where aid has been more effective, the Oslo process highlights the limits of foreign aid as an instrument of statecraft.
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