It was 50 years ago when a heated debate played out in the ministerial committee for defense on the question of employment of Palestinian workers in Israel.
Then-Defense Minister Moshe Dayan, who dictated Israel's policy vis-a-vie the territories captured in the 1967 Six Day War, was in favor of merging the economies as part of his vision for two separate political entities.
Dayan wanted an autonomous rule for Palestinians in order to advance a positive standard of living that would distance the population from politics and terror.
An opposing view was held by then-Labor Minister Yigal Alon, who cautioned against a path that would ultimately lead to annexation of the territories. He advocated for a full separation of the two populations, although he was not a proponent of an independent Palestinian state.
Then-Prime Minister Golda Meir was also in opposition to Dayan's view because she was concerned for the work ethics of Israelis and worried that Palestinians could stage a strike at any moment and interrupt the work flow - if they were to take up positions in construction, agriculture and more.
Israelis, who are not quick to delve into the history books, may be unaware that today the government is once again debating the very same questions, reaching similar conclusions and taking the same steps in an effort to forge the so-called "economic peace," aimed at ensuring long-term security.
This is a temporary fix that the government hopes will become permanent.
There is nothing wrong with a policy meant to improve the lives of Palestinians. But, when that becomes the principle aim of the government and does not include a political resolution or even a public debate over how best to end the Israeli-Palestinian conflict, future ramifications can be grave.
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A Palestinian worker receives the coronavirus vaccine at the Kalandia border crossing near Jerusalem
(Photo: AP)
In Gaza, work permits, (dubbed trade permits) were issued in numbers reminiscent of pre-withdrawal days, as a precursor for a grand strategic program for economical development of the enclave.
In the West Bank, work permits are being expedited with greater efficiency, vocational training being offered to Palestinians - including in the high-tech industry - and Israeli quality control certificates are being offered to local factories.
Just as was done 50 years ago, the government has adopted the idea that economic stumbling blocks must be removed in order to better the lives of the West Bank population in order to minimize political controversy and security challenges.
But in fact, what the government is doing is buying short-term calm at the price of even a more violent conflict down the road.
In Gaza, Israel's policy will solidify the Hamas rule over the Strip and make Qatar a permanent player in the region, with its aid money. It will enable the Islamist group to make political inroads and increase its military strength.
In the West Bank, Israel's policies have yielded quiet on the security front, but by injecting the Palestinian economy into that of Israel, it will bring a about a de-facto annexation that will ultimately lead to a one-state solution.
The economy is a prominent component of Israeli-Palestinian relations, which has enabled relative security over the past decade, despite countless political challenges.
But in the long-run, Palestinians will rise against the inequity between both economies - which is not likely to change - so there should be a review of the policy based on past experiences.
Israel's former iconic Finance Minister Pinchas Sapir cautioned 50 years ago against what he called "an extreme merging of the economies," and warned that "annexation is annexation," even when it is not officially announced.
The calm that the "economic peace" brings comes at the cost of a changing reality that may lead Israelis and Palestinians beyond the point of no return, when the two would not be able to separate from each other.
Michael Milstein is the head of the Palestinian Studies Forum at the Moshe Dayan Center at Tel Aviv University and a member of the INSS