Stability remains a rare commodity in the Middle East. That’s all the more reason to welcome modest signs of rapprochement between Israeli and Palestinian leaders – and for both sides to build on them.

Residential apartment blocks and commercial buildings stand on the skyline in Gaza City. If young Palestinians are to resist the appeals of radical groups, they need to see some hope for political as well as economic progress. Shawn Baldwin/Bloomberg, File

Admittedly, conditions hardly look propitious for peace. Israel’s fragile ruling coalition is split between hardliners firmly opposed to an independent Palestinian state, leftists, centrists and even an Islamist party. The Palestinians are even more divided, with Hamas dominating the Gaza Strip and making inroads into the West Bank, where the deeply unpopular Palestinian Authority holds sway. Meanwhile, the U.S. has its hands full trying to fend off crises from Ukraine to Iran, and has little bandwidth to broker a new Middle East peace process.

That doesn’t mean incremental progress can’t be made. In recent months, Israel has taken some promising steps. It has tentatively agreed to allow Palestinian companies to set up 4G mobile networks, which the World Bank has described as critical to developing a Palestinian digital economy. In late December, Israeli officials promised to legalize the status of several thousand Palestinians and to provide more travel passes for Palestinian officials and businesspeople. Most important, Israel has offered more than $180 million in loans so the Palestinian Authority can pay salaries and forestall a fiscal crisis.

While Israel’s government has taken flak for giving too much and Palestinian Authority President Mahmoud Abbas for accepting too little, these measures are good for both sides. They shore up the Palestinian Authority – a critical security partner for Israel – against Hamas. They should also help ease mounting frustrations in the West Bank by removing some needless daily indignities. Israel could further bolster the Palestinian Authority’s fiscal position by following through on proposals to lower handling fees for fuel shipments and allow more expansive cross-border commerce with Jordan.

Palestinian leaders could unlock more aid by taking a few sensible steps of their own. First and foremost, they need to abandon their longstanding policy of paying stipends to the families of Palestinians, including convicted terrorists, who’ve been imprisoned or killed by Israeli security forces. The payments have prompted Israel to withhold tens of millions of dollars from the customs revenue it collects on behalf of the Palestinians, and they prevent the U.S. from directly funding the Palestinian Authority. Privately, some Palestinian officials have acknowledged the program needs to be overhauled and families offered welfare only according to financial need. Abbas should have the courage to act.

For their part, Israeli leaders should remember that piecemeal efforts are welcome but not sufficient. If young Palestinians are to resist the appeals of radical groups such as Hamas, they need to see some hope for political as well as economic progress. While it may be premature to envision new peace talks, Israel should at least not foreclose them with unilateral moves, such as building settlements in areas critical to a future Palestinian state.

The fact remains that there is no one-state solution that can guarantee Israel remains Jewish, democratic and secure. Its supporters should both applaud steps to stabilize relations with the Palestinians and press for more.

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