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Back in 2014, the top answer to the following question suggested that a "three-state solution" where Egypt annexes the Gaza Strip and Jordan the West Bank is not viable.

Does it make sense for Jordan & Egypt to annex Gaza and the West Bank?

However, recently, the Trump administration declared Jerusalem the capital of Israel, and Trump's former Campaign Strategist Stephen Bannon was heard describing the move in the upcoming book "Fire and Fury" (from an excerpt of the book in New York Magazine):

Pivoting from Trump himself, Bannon plunged on with the Trump agenda. “Day one we’re moving the U.S. Embassy to Jerusalem. Netanyahu’s all-in. Sheldon” — Adelson, the casino billionaire and far-right Israel defender — “is all-in. We know where we’re heading on this … Let Jordan take the West Bank, let Egypt take Gaza. Let them deal with it. Or sink trying.”

“Where’s Donald on this?” asked Ailes, the clear implication being that Bannon was far out ahead of his benefactor.

“He’s totally onboard.”

Bannon's comments suggest that declaring Jerusalem the capital of Israel/moving the US embassy is part of a larger plan to implement a three-state solution to the Israeli–Palestinian conflict.

How would this work? Why would Jordan and Egypt be more willing to annex the respective territories if Jerusalem is considered the Israeli capital by the US? What is the best interpretation of Bannon's comment "Let them deal with it. Or sink trying"?

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    Seems like wishful thinking. Gaza is nothing but trouble for Egypt. Same for the west bank, minus Jerusalem, for Jordan. – ugoren Jan 4 '18 at 22:29
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    It makes it more likely in Bannon's mind. We can't really tell if it makes it more likely in reality due to lack of meaningful ways to model this probabilistically – user4012 Jan 5 '18 at 0:39
  • @ugoren true, but don't forget you are basically giving free land to a country. Not to mention the trouble is in large part due to illegal activities at the border. Once this border is removed, the troubles could be easier to deal with. I am sure Egypt and Jordan have plenty of other good reasons to accept this. Including also american aid. – user5751924 Jan 5 '18 at 12:17
  • @user5751924 I am absolutely certain nor Egypt neither Jordan are willing to take several hundreds of thousands of heavily armed highly impoverished refugees. Would you like them on your country? – Rekesoft Jan 5 '18 at 12:37
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    A three-state solution to the Palestinian issue where none of the states is one recognized as Palestine? Sounds, literally, dangerous. – PoloHoleSet Jan 5 '18 at 16:39
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The linked to answer tells you that the probablity of a three-state solution (aka the Jordanian option), in the form that you describe it, was close to zero. Israel doesn't want to give the West Bank back and Jordan doesn't want to have it. Egypt taking back the Gaza Strip has been out of the question since 1979.

The embassy move has been discussed a lot and most analysts have had a hard time figuring out why it was carried out. But suffice it to say that it doesn't make a three-state solution more likely. The answer to your question is therefore no.

Then why was Stephen Bannon pushing the three-state solution idea? Possibly because of influence from Sheldon Adelson, the American casino billionaire and Israel activist. In 2016, he donated $25m to the Trump campaign.

Adelson is an opponent to the two-state solution. Among other things, he has claimed that "the Palestinians are an invented people," that "the purpose of the existence of Palestinians is to destroy Israel" and that a Palestinian state is a "a steppingstone for the destruction of Israel and the Jewish people." Adelson also bankrolls the Heritage Foundation a conservative public policy think tank that opposes Palestinian statehood and favors the three-state solution.

So if one state is out, due to the "demographic suicide" angle, two-states, because Palestinians want to destroy Israel, then the only option left is three states.

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