The city of Reykjavík, Iceland’s capital, modified its position today on a boycott of Israel, deciding instead only to boycott products from the Occupied Territories.

That is a much more politically sensible decision and a smart one for Reykjavík. The initial boycott was going to complicate Iceland’s foreign policy, as it is not the national policy to boycott all of Israel. Indeed, Iceland has no specific policy about how to respond to the occupation, nor does it have one regarding economic actions against Israel.

The outcome, however, does have an unfortunate side effect: it will be perceived as a tacit acknowledgment that a boycott of Israel over the occupation is, indeed, an act of antisemitism. The hysterical reaction of Israel’s Foreign Ministry, and the entirely inappropriate call by the Simon Wiesenthal Center (an institution which shames Wiesenthal’s name on a daily basis with their consistent practice of labelling any and all criticism of Israel as antisemitism) for Jews not to go to Reykjavík, will now appear to have been effective.

Maybe that hysterical overreaction was the reason for the shift in Reykjavík’s policy. However, the more likely reason is that the initial boycott call was inconsistent with Iceland’s policies, and the objections of the Icelandic government and Reykjavík’s mayor made the city council reconsider. Iceland is a small country and Reykjavík is really its only major city, so its decisions on such matters bear more weight in Iceland than a city in, say, the United States would.

What would be most helpful would be for Iceland to declare a boycott of products from the Occupied Territories as well, and to do so while clearly rebuking Reykjavík’s original resolution. As with Reykjavík’s boycott call, any such decision will have virtually no real economic impact. Israeli imports to Iceland in 2014amounted to about $4 million. Even that would mean little to Israel’s economy, and a settlement boycott would affect only a tiny fraction of that total.

But politically, Iceland could be leading a path toward a more widespread statement that the world is fed up with the occupation and Israel’s intransigence. If there is to be any resolution to the Israel-Palestine conflict, whatever that resolution may end up being, it has to start with facing reality.

That reality is a very simple one, yet it is one that the entire history of peacemaking, especially the twenty years of the Oslo Accords, has denied. Put simply, the myth that peace can only be achieved through “negotiations between the parties” is a fiction. Israel, like any other country, does not compromise out of the goodness of its heart. It does so for the same reason all countries do, because it is in its interest to do so. But with the violence of the occupation considerably diminished in recent years, the economic costs of administering the Territories largely absorbed by Europe, the United States and some Arab states, and the diplomatic and political costs shielded by the United States, Israel has little reason to settle for less than its ideal terms.

That is what has to change. The world must begin taking actions that change the playing field so that Israel has a reason to compromise. No doubt, achieving peace is not so simple a process. Much will have to change not only in the Israeli polity but also in the Palestinian one. The petty bickering between Fatah and Hamas, the comfortable position the occupation has provided to too many Palestinian “leaders” and the lack of a legitimate political leadership must all be addressed as well. And even then, finding a deal both sides can live with will be no easy task.

But the ingredients are there: the Clinton Parameters, the Arab Peace Initiative, the Roadmap, the Geneva Initiative, all of these offer helpful guidelines and starting points. But none of it can move forward until Israel does not believe that “managing” the occupation is a viable alternative. Right now, most of Israel believes it is.

Iceland has an opportunity here to take a small step in steering the international community away from its unhelpful stances to a more productive one. It won’t happen through a blanket boycott of Israel, but it can start with a boycott of the settlements. Reykjavík started something that was unlikely to help. Now, the Icelandic government has a choice between allowing Reykjavík’s mis-step to make the situation worse, or to capitalize on it and make it a little better. One can only hope they choose the right course.

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