Decades of negotiations have achieved little in terms of peace between Israel and the Palestinians, and territorial compromise seems increasingly dangerous. Could improved economic ties discourage Palestinians from further violence, and give them an incentive to prevent the extremists among them from committing mayhem? A billion-dollar plan to build a model Palestinian city called Rawabi might offer a model of how this could happen. Clifford May writes:

[T]he most important reason to see Rawabi as a hopeful place is this: its success depends on peaceful coexistence—not to be confused with a peace agreement—between Palestinians and Israelis. . . . Were Hamas to take over the West Bank, it would be only a matter of time before its fighters clashed with Israelis. Because Rawabi is a city on a hill, it would be a good spot from which to fire missiles at Israel’s major population centers and its international airport. Assuming Israelis returned fire, a billion dollars and years of hard work would within days be reduced to rubble.

There is little doubt that if Hizballah had participated more intensively in Saturday’s attack, Israeli air defenses would have been pushed past their limits, and far more damage would have been done. Daniel Byman and Kenneth Pollack, trying to look at things from Tehran’s perspective, see this as an important sign of caution—but caution that shouldn’t be exaggerated:

Iran is well aware of the extent and capability of Israel’s air defenses. The scale of the strike was almost certainly designed to enable at least some of the attacking munitions to penetrate those defenses and cause some degree of damage. Their inability to do so was doubtless a disappointment to Tehran, but the Iranians can probably still console themselves that the attack was frightening for the Israeli people and alarming to their government. Iran probably hopes that it was unpleasant enough to give Israeli leaders pause the next time they consider an operation like the embassy strike.

Hizballah is Iran’s ace in the hole. With more than 150,000 rockets and missiles, the Lebanese militant group could overwhelm Israeli air defenses. . . . All of this reinforces the strategic assessment that Iran is not looking to escalate with Israel and is, in fact, working very hard to avoid escalation. . . . Still, Iran has crossed a Rubicon, although it may not recognize it. Iran had never struck Israel directly from its own territory before Saturday.

Byman and Pollack see here an important lesson for America:

What Saturday’s fireworks hopefully also illustrated is the danger of U.S. disengagement from the Middle East. . . . The latest round of violence shows why it is important for the United States to take the lead on pushing back on Iran and its proxies and bolstering U.S. allies.