Resolution 242 called for Israel to withdraw from occupied territories and for a just settlement of the refugee problem. It also confirmed the inadmissibility of the acquisition of territory by war. Resolution 2334 went much further by affirming Israel as an occupying power that must abide by the Fourth Geneva Convention, which prohibits movement of population into occupied territories. It condemned measures altering the demographic composition, character and status of the Palestinian territories including East Jerusalem. It affirmed that the Israeli settlements on the West Bank and East Jerusalem have no legal validity and constitute a flagrant violation of international law. It also demanded that Israel immediately cease all settlement-building.
The symbolism of this action is also important. The 14-0 vote with one abstention clearly demonstrated how isolated Israel has become in the international community. Substantively, it also tacitly changed U.S. policy from calling settlements unhelpful to calling them illegal, and from ignoring the issue of East Jerusalem to recognizing East Jerusalem as Palestinian territory. However, from a practical point of view, it will likely have little effect on the situation on the ground.
From the perspective of the Obama administration, this action is too little, too late. Over the past eight years, Obama had numerous opportunities to take this step and, for domestic political reasons, declined. At times he vetoed resolutions that merely affirmed stated U.S. policy. At this late stage, there is no opportunity to follow up with concrete actions. While it is difficult to discern Donald Trumps positions from his conflicting statements on the campaign trail, his appointments of senior officials indicate that the Trump administration will be more pro-Israel than the Obama administration, and will be unlikely to follow through on the resolution. In fact, his announced intention to move the U.S. embassy to Jerusalem, while a largely symbolic move, if implemented, will likely inflame feelings in the Arab population and increasingly poison the environment.
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Trying to create two states in these circumstances would bring about the same dynamic that existed at the founding of Israel in 1948. As Jews began to ethnically cleanse the "state of Israel" of its Arab population, the resulting atrocities inflamed the Arab populations of surrounding states. These states were forced by public pressure to intervene militarily, resulting in the first Arab-Israeli War. Another war would not have a happy ending.
Israel will probably ignore this this resolution, as it has ignored all previous efforts at achieving a settlement. Doing so would be a violation of international law, but, in reality, international law is made and enforced by those with the biggest guns, and Israel and the United States have the biggest guns. If this effort brings about a realization that Israel is faced with a choice of being a democracy for its entire population or being an apartheid state, and that the status quo is untenable in the long run, perhaps everyone can move towards a more realistic assessment of the possibilities.