This week, Donald Trump’s son-in-law Jared Kushner and his team have been touring the Middle East to push his new $50bn economic plan, unveiled in Bahrain last month. The proposals aim to open the West Bank and Gaza to regional and global markets, developing the Palestinian economy. The US administration claims that within 10 years this strategy would double Palestinian economic output.

While the US maintained the launch of the plan was a success, it received scathing press coverage and little recognition by the international community. Crucially, neither the Palestinian Authority (PA) nor the Israeli government were represented, and other important players like the EU, Egypt and Jordan only sent low-level delegations.

Trump has promised the “deal of the century” to solve the Israel-Palestinian question, but so far only Kushner’s economic plan has emerged. None of Kushner’s proposals can work without knowing the outlines of a political settlement. His plan deliberately ignores the realities on the ground, failing to mention Israel’s occupation of the West Bank or its blockade of Gaza.

The Israeli occupation is the main obstacle to Palestinian economic development. In 2013, the World Bank found that restrictions in the Israeli-controlled parts of the West Bank cost the Palestinian economy $3.4bn per year, or 35 per cent of gross domestic product in 2011. Little has changed since. And the blockade of Gaza has left the strip in a permanent humanitarian crisis.

Palestinian protesters light fires along the Israel border Show all 10 1 /10 Palestinian protesters light fires along the Israel border Palestinian protesters light fires along the Israel border Palestinian protesters burn tires during a demonstration on the Israel border on February 22 2019 AFP/Getty Palestinian protesters light fires along the Israel border Palestinian protesters run through smoke from tear gas and burning tires during a demonstration near the fence along the border with Israel on February 22 2019 AFP/Getty Palestinian protesters light fires along the Israel border Palestinian protesters climb the fence along the border with Israel during a demonstration AFP/Getty Palestinian protesters light fires along the Israel border Palestinian protesters holding national flags walk past burning tires during a demonstration on the Israel border AFP/Getty Palestinian protesters light fires along the Israel border A Palestinian protester wears a head band as he takes part in a demonstration near the fence along the border with Israel, east of Gaza City on February 22 2019 AFP/Getty Palestinian protesters light fires along the Israel border Palestinian protesters and a medic run to pick up a child during a demonstration near the fence along the border with Israel on February 22 2019 AFP/Getty Palestinian protesters light fires along the Israel border Palestinian protesters run through smoke from tear gas and burning tires during a demonstration near the fence along the border with Israel on February 22 2019 AFP/Getty Palestinian protesters light fires along the Israel border A man carries the Palestinian flag during a demonstration near the border fence with Israel AFP/Getty Palestinian protesters light fires along the Israel border A Palestinian protester wears a mask painted in the colours of the national flag during a demonstration on the Israel border AFP/Getty Palestinian protesters light fires along the Israel border A Palestinian protester returns a tear gas canister thrown by Israeli troops during a demonstration on the border AFP/Getty

US policy is already eroding the prospects for the two-state solution, which is enshrined in several UN resolutions. Kushner and Jason Greenblatt, Trump’s Middle East peace envoy, have made clear they are not committed to the international consensus. Instead, US policy under Trump has overtly favoured Israel while turning the screws on the Palestinians: the US has recognised the whole of Jerusalem as Israel’s capital and moved its embassy there from Tel Aviv, and recognised Israeli sovereignty over the occupied Golan Heights.

At the same time, Trump has ended US support for the UN agency for Palestinian refugees (UNRWA), cut US bilateral aid to the Palestinian Authority, and closed the Palestine Liberation Organisation’s office in Washington. As a result, the US has lost credibility with the Palestinians as a neutral broker of peace.

The US’s silence on Israeli settlement construction in the West Bank could embolden right-wing Israeli politicians to annex parts of the West Bank. Israeli prime minister Benjamin Netanyahu has already promised to pursue annexation, in order to win support from the hard-right. This would permanently fragment Palestinian territory – making a viable, contiguous Palestinian state impossible – inflame tensions across the region, and fan extremism in both the West Bank and Gaza.

The EU should limit the potential for Kushner’s economic package to further undermine the two-state solution, which remains the most realistic, mutually acceptable resolution to the conflict. The EU operates a “differentiation” policy towards Israel: settlement entities are excluded from its research programme, and member-states are supposed to label goods produced in settlements. But these measures are weak and poorly implemented. Netanyahu’s threats of annexation should prompt the EU to strengthen its differentiation measures, for example by barring European banks from carrying out financial transactions with people or businesses in the occupied territories.

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At the same time, the EU should strive to end the blockade on Gaza. It breeds hopelessness, radicalism and violence and entrenches the political, social and economic separation of the Palestinian territories. The strip is controlled by Hamas – designated a terrorist organisation by the EU – and is currently subject to severe restrictions by Israel on the movement of people and goods, as well as limiting access to the sea, arable land and offshore gas.

Future European financial support to Gaza should go hand-in-hand with calls for Israel and Egypt to relieve the blockade. The EU should try to assuage Israel and Egypt’s security concerns about easing access by restating its offer to position observers at the Rafah crossing between Gaza and Egypt.

Alongside the effort to alleviate the blockade, the EU should foster reconciliation between the Palestinian administration in the West Bank and Hamas in Gaza. Without a united leadership, there can be no viable Palestinian state. The EU could offer some incentives, for instance a contribution to the cost of reuniting the Palestinian civil service.

The EU could also break from its no-contact policy with Hamas, and offer to provide a confidential channel for dialogue between the two Palestinian administrations. The Union should demand that Hamas repeal or amend its 1988 Charter, which codifies its antisemitic views and calls for the destruction of Israel. It should make de-listing Hamas as a terrorist organisation the eventual goal, setting clear targets (such as renouncing violence and the recognition of Israel), with development aid to Gaza conditional on each target being reached.

With each day that passes, Netanyahu and Trump are eroding the two-state solution. By easing tensions, the EU can act to preserve it. But to do so, Europeans need to shake off their passivity.