This paper examines the possible impact of local and regional Islamic movements, committed to prevent or spoil by terror any settlement between Israel and the PLO, on the intended Israeli disengagement from Gaza Strip in 2005 and, following the death of Arafat, on possible renewal of Israeli-Palestinian negotiations along the Road Map.

The movements included in this paper are primarily the Palestinian Hamas, the Islamic Jihad and local Fatah-based militia groups that emerged after October 2000 and adopted similar tactics of terrorist attacks against Israel. Hamas and the Islamic Jihad maintain direct political and military links with Syria and Iran and, more closely, with the Shi'i Lebanese Hizballah movement, which operates both as an independent Lebanese actor and as a conduit for Iranian and Syrian influence in Palestinian affairs.

• This essay details the urban consequences of the Al Aqsa Intifadah and the separation barrier project on Jerusalem. In West Jerusalem, the onset of terror, and specifically a wave of suicide bombings, hastened the city’s decentralization. Rapid decline of the economy and the disappearance of tourism further battered the city’s vitality. Israel’s  increased barriering of the city, culminating in the separation barrier project, was a major low for the city’s Arab inhabitants, and the urban fabric of East Jerusalem. Neighborhoods inside and outside the barrier were divided, with massive effects on daily life, work opportunities, property values, and relocation patterns. The paper argues that without a strategic package of urban recovery measures, Jerusalem is in danger of becoming locked in a spiral of decline.