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Israel faces an existential crisis—and Benjamin Netanyahu is making things worse.

Tel Aviv, Israel — There once was a very successful campaign in Israel for road safety. Its slogan was, “On the road, don’t be right, be smart." The day after the flotilla raid last week, more than one pundit in the Israeli press brought up the slogan. We’re right, they said, but why can’t we also be smart?

The raid was by no means smart. Israel blindly stepped into a p.r. campaign orchestrated by Turkey and Hamas, doing enormous damage to its own international image and credibility. But the raid was not an isolated incident. Rather, it is only the latest example of how Benjamin Netanyahu’s prime ministership is steadily eroding Israel’s legitimacy.

Why do Israelis believe they’re right on the flotilla specifically and Gaza more generally? Because Israel evacuated Gaza to the last inch, and Hamas, which controls Gaza, kept shooting rockets at Israel’s civilians. Because Hamas is not only calling for the murder of every single Jew—its covenant is by no means ambiguous on that—but also arming as best it can for this holy cause. Under these conditions, and despite Hamas’s refusal to recognize Israel’s right to exist, Israel still actively sustains Gaza. Israel’s hospitals accept tens of thousands of Gazans for medical treatment; it lets food and medicine daily through its checkpoints on Gaza’s boarders; and it supplies Gaza with electricity and gas. No other country in the world sustains a government bent on its destruction in such a way. (Egypt, with which Gaza shares a border, takes no such responsibility.) Given all this, as Israel sees it, stopping a Turkish attempt to open an arms importation route to Gaza was right.

But this does not make the raid smart. The “humanitarian mission” carried on the flotilla was not a move in a military game, nor was it a court case in which complicated judicial arguments count. It was a gambit in the game of p.r., played in front of a worldwide, hardly informed TV audience, and mediated, more often than not, by hostile media. It is easy to see how Israel could have handled the situation: It should've just let the flotilla pass. The whole hot-air balloon would have been deflated. The world audience, if it had noticed the affair at all, would have been left with a few snippets of the “peace activists” chanting anti-Semitic slogans to the wind, then hugging Hamas officials. That’s it. (There was a similar attempt to pull off a p.r. stunt under Ehud Olmert's administration. Olmert let the “peace mission” through. No one remembers it now.)

This is not hindsight wisdom. In the days before the incident, many commentators (myself included) kept saying Israel should just let the flotilla sail to Gaza. But Netanyahu and Minister of Defense Ehud Barak thought they knew better. After all, both served in elite army units, and commando raids are their expertise. But, apparently, statesmanship is not.

In large part, this is why the flotilla's shockwaves in Israel are so enormous. Israelis have been plagued of late by a creeping fear that their leadership is incompetent—that Netanyahu and Barak just don’t understand the basic parameters of the political map. For a country that’s so small, in the midst of a huge and hostile region, this is no niggling fear. Now, the flotilla incident has confirmed that, under its current leadership, Israel indeed faces a deep crisis of power and perception. The problem isn't just that Netanyahu and Barak failed to see the meaning of a Turkey and Hamas p.r. stunt; it is that they have failed to see the larger picture.

Israelis are stunned by the fact that the world has grown to think of Hamas as the righteous victim and of Israel as the evil aggressor. This perception of Israel is false and malicious, but it does not mean that Israel bears no responsibility for it. Yes, there is a lot of anti-Semitism in the world. Yes, there are unfair biases against the Jewish state. But Israel has been feeding them. So long as Israel’s government continues to settle in the West Bank, no one—not even Israel’s American friends—will believe that Netanyahu seeks peace. So long as Israel seems to be bent on making its occupation permanent, on holding a whole population under military rule without basic political rights indefinitely, it will be increasingly ostracized by the international community.

Today, Israel is not the belligerent party in the Israeli-Palestinian conflict. It is Israel that has offered partition, and the Palestinians who have consistently refused it. Netanyahu inherited a winning hand. He could have put a peace plan on the table, leaving the Palestinians to refuse it. He could have declared that Israel wanted to withdraw from the West Bank and would do so if its security was guaranteed by an agreement with the Palestinians or a third party. He could have offered state housing help for those who would leave the settlements even before an agreement. Instead, he mumbled something half-heartedly about two states, and then moved on to fight for enlarging settlements.

Settlements, clearly, are the keys to all this. Further settlement is what energizes the campaign to delegitimize Israel. And, for the first time since its war of independence, Israel is in real danger of destruction. Zionism’s success depended, as Theodore Herzl understood, on international recognition. It will not survive without it. If Israel clings to its settlement policy, it will sink along with its West Bank occupation.

Zionism rested its moral claims on the right of all peoples to self-determination. Settlement and occupation run against its grain, and this is why they undermine international support for Israel. Had Netanyahu realized this—as Peres, Rabin, Sharon, Olmert, and Livni have before him—he would not have appointed a foreign minister who is himself a settler; he would not have rested his coalition on ultra-orthodox fanatics and modern orthodox messianics; he would have not entangled himself in a senseless quarrel with Israel’s best friends over enlarging the settlements. Instead, he would have taken the lead in putting an end to the occupation, with or without Palestinian consent. But he didn't.

Israelis' fear that their country is drifting into an abyss under Netanyahu's leadership—or lack thereof—is by no means unjustified. The flotilla may have been a ship of terrorists. But Netanyahu’s administration seems like a ship of fools.

Gadi Taub is an assistant professor at the Hebrew University of Jerusalem. His book The Settlers and the Struggle over the Meaning of Zionism is forthcoming this fall from Yale University Press.

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