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Foreign Correspondent -

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(generated from captions) and this is Foreign Correspondent. Hello I'm Eric Campbell in Jerusalem confounded and defeated all comers. It's the peace puzzle that has around the world - But what would happen if people of Palestinians - concerned about the plight buying Israeli products decided to stop or using Israeli services. the end of the day, it really does. Comes down to the dollar at Free Palestine. ALL : Free Palestine! global campaign of boycotts Can a grassroots for the better... change an intractable stand-off It's the only movement the right type of pressure. that has recently applied ..or do more harm than good? the Palestinian people. I'm the one who loves I'm taking care of them,

that we don't have to let them go. I'm making sure their case for statehood to the UN, Tonight - as Palestinians take we go behind the boycott campaign. ALL: Free free Palestine! was boycotting South Africa 30 years ago the world to end apartheid. to boycott Israel Today there's a growing push to end the occupation. It's a controversial movement to an apartheid regime. that often likens democratic Israel at a standstill, But with the peace process at new ways to fight. Palestinians are looking Christians, Jews and Muslims. It's a city that's sacred to for centuries. And they've all been fighting over it can worship Today Daniel Birnbaum and his family the Wailing Wall. at Judaism's holiest site, occupation to get them here. But it took a war and a military (Singing prayers) the Bar Mitzvah at the wall To be able to celebrate for us, is a real emotional experience for the family, very touching.

East Jerusalem from Jordan In 1967 Israel captured and restored Jewish access. around the world. It was a joyous victory for Jews And when Daniel was seven years old, for the Promised Land. his family left New York (Singing) It's magical, especially for me.

I'm the son of a Holocaust survivor,

survival in the death camps, so I grew up hearing the stories of the Nazi death camps. for my parents And it was always a dream to be able to live in Israel, not only me and my generation, and here they are raising but my children in Israel. feels under threat. But now Daniel Birnbaum He owns a factory in the West Bank, in the 1967 war. part of the land Israel captured to boycott the business. So activists are trying my production to China. They want me to transfer

European customers and countries. That's what I'm hearing from these

And I think that they're ignorant more from hatred of Israel and I think they're doing it the Palestinians more than out of love for and I think that's a great shame.

this factory made munitions. Under the previous owner, for making soft drink at home. Now it makes carbonation devices 40 countries. Sodastream sells to more than the boycott can follow. But wherever it goes, Some folks, I'd say ignorant folks, that's manufactured in the West Bank believe that any product is contaminated, so to speak, or purchased. and should not be manufactured we want peace. PROTESTORS: We want justice,

the Palestinians, East Jerusalem belongs to and resist the occupation and we're going to struggle

and a two state solution. until we achieve our capital is one of millions of Palestinians Cairo Arafat in the West Bank and East Jerusalem living under Israeli occupation. Like Daniel, she was born in the US in what she sees as her homeland. and moved here to raise her family She's glad companies like Sodastream are facing boycotts. Most people in Palestine support it occupation is colonisation because we believe that part of all along. and we've been exploited So we totally support the boycott and we should support it internationally. Palestine will be free! CROWD: From the river to the sea, on the occupied West Bank These days it's Palestinians in Jerusalem. who have trouble worshipping Unlike Jews, they need a permit to go there. at Israeli security checkpoints. Every week they stage protests Today's follows the usual pattern. Boys throw stones. with tear gas. Soldiers respond instantly Within moments we're caught in the toxic fallout. Well, I've worked all over the world I've ever been tear-gassed and this is the first time and it is horrible. And what's extraordinary about this an unusual event. is that it's not even It happens almost every Friday. in the occupied territories. This is what has become normal to Jerusalem to pray, They simply wanted to go

to see the Holy Land and then they were met with tear gas were taken to the hospital. and a few people collapsed and For 40 years, always the same. That's why we're going to the UN our two-state solution. and why we want of Ramallah, Cairo Arafat lives in the city from Jerusalem. just a 20-minute drive journey for years. She hasn't been able make that I think it's very difficult in this situation, for people who don't live understand the complexities of it it's very difficult to really of occupation are. and what the manifestations without being checked, stopped, I can't drive 12 miles any which way having to have a permit, not that road. being told to travel on this road, to Yasser Arafat, Cairo is no relation the late Palestinian leader, trying to break the status quo. but she's one of many She doesn't want her daughters Tammy and Semma to spend decades more under Israeli occupation. cutting between those places. We see the wall might succeed And she hopes a peaceful boycott where violence failed. I think that in the long run

that we have with Israel we need to sever any kinds of ties occupier/occupation relationship that they perceive that this has benefits from that. as equal partners, They need to see us not as in a captive market

or as a group of people that they can exploit. (Car horns) Most of the West Bank is now nominally self-governing

under the Palestinian Authority.

But the heavy hand of Israel is never far away. It may be checkpoints that block traffic for hours each day. Or Israeli military commanders who decide whether houses and schools should be built or demolished. Occupation is humiliation. There's - I mean, the whole idea of another people telling you how to live, where you can live, what you can do.

(Cars continue to honk) And it permeates every aspect of our life. I knew it's very difficult for people to understand.

Every import that we want, it has to be approved by Israelis. The boycott push has come from Palestinian community groups, frustrated with the failure of their leaders to achieve progress in peace talks. It's called BDS - Boycotts, Divestment and Sanctions. Its priority is to target Israeli and foreign companies operating in the West Bank. But it also supports boycotting any Israeli business, cultural group or university. (Cars honking) In Europe, supermarket chains have been pressured to stop selling products like Ahava, cosmetics made from Dead Sea mud in the West Bank. Max Brenner, you can't hide, you support genocide. In Australia, the chain of Max Brenner chocolate stores has been targeted because its parent company gives care packages to Israeli soldiers who activists accuse of atrocities. 'Free Palestine, boycott Israel,

this is genocide, what Israel is doing. Israel is expanding the settlements. And it's got to stop.

And what is Max Brenner doing? Max Brenner is financially and morally supporting the Israeli defence forces, particularly two brigades - the Golani and the Givati.

It's a chocolate shop. Are we making weapons in here? Are we making bombs in here? It's a chocolate shop! At this recent protest in Sydney, they were outnumbered by counter-protesters - the two sides kept apart by dozens of police.

I'm Jewish and I don't like to see Jewish businesses boycotted. The last people who boycotted Jewish businesses were called Nazis and if we don't stop and stand up that's exactly what's going to happen here. Zionists are the new Nazis! Zionists are the new Nazis!

Nazi! Nazi! Nazi! So far, the impact has been more symbolic than economic, but it still makes Daniel Birnbaum angry. If he were forced to close this West Bank factory, he'd have to sack 450 Palestinian workers. It's not from love of the Palestinian people because I'm the one who loves the Palestinian people, I'm taking care of them. I'm making sure that we don't have to let them go. And I'm very proud we've been able to operate this factory despite the pressure coming from the boycott coming from places like Sweden and other places, mostly in Europe. The factory is on one of ten large Israeli industrial estates on occupied Palestinian territories. For decades, Israel offered financial incentives

for businesses to come here. They rushed in to take advantage of cheap rents and to exploit cheap Palestinian labour. But Daniel Birnbaum says his company's not like that. These workers get paid about 4.5 times more than they would get paid in the Palestinian Authority across the street, which is an unbelievable wage. They get overtime up to 245 per cent. They get transportation, they get subsidised lunches. They get medical insurance for their families, holiday pay, a lot of benefits they wouldn't dream of getting

if they were working in the Palestinian Authority where there is unemployment of more than 30 per cent. The company invited us to a banquet it threw to mark the end of the Muslim fasting month of Ramadan. (Music plays) By the end of the evening, the Palestinian workers weren't just celebrating with their Jewish bosses, they were carrying them on their shoulders. It did feel slightly played up for the benefit of our camera.

But Daniel Birnbaum insists the goodwill is genuine. The best I can do is to offer employment

to the civilians who live in this area, whether they're Bedouins or Palestinians or Arabs from Jerusalem or Israeli Arabs or Ethiopians or Darfurian refugees whom we have here. We have them all, and I think it's a wonderful opportunity to not only give them employment,

but also give them the opportunity to work together and know each other and see each other as human beings. It's a great thing. We call is the Island of Peace, and I'm preserving this as much as I can. (Cheering) You have to verify why you wanna go, where you wanna go - Back in Ramallah, Cairo Arafat and her daughters are less impressed with such efforts. He has all his rights, and you go back to your life where you're living in occupation, and it's not equal, it's not fair. We're suffering from way more severe issues. And the BDS - excuse me - the BDS movement seems to be the only movement that has recently applied the right type of pressure on different institutes and governments outside of Palestine. Semma, who's 22, hasn't seen much evidence of Jews and Palestinians being united. For eight years she's watched a giant wall divide them. It's intended to be a 760-kilometre barrier to stop terrorist attacks. 13 per cent of it is being constructed inside the West Bank - much of it in solid concrete. So, what do you call the security fence on this side? It's the apartheid wall. That's how you see it? Yes, of course. It's 10 feet high, quite thick,

and after every so often you will find a tower with the security soldiers aiming their guns down at the civilians. And there is also - for each part of Palestinian territory that is enclosed by the wall as well, you will find one gate that opens at certain hours for a few hours and then shut down.

So, the people within there can only leave and enter

according to the times set by the occupiers. So, it's split the neighbourhood? Mmm-Hmm. Right, so you see it as a land grab? Exactly. It is big isn't it? It's huge. The BDS has almost no support inside Israel. But some left-wing Jews - particularly in more liberal cities like Tel Aviv - believe something must be done to help the Palestinians. Rami Heuberger is a famous Israeli actor and director at the national theatre company, Habima. He's joined many artists in staging their own boycott - declaring they won't perform in the West Bank until the occupation ends. I want to perform in the West Bank after they put this wonderful ink in my passport. Saying, you have come into an independent state. Into an independent state, of course. So you are against the occupation? Yes, I am against the occupation, yes, yes. So, are you anti-Zionist? No. Are you anti-Semitic? Anti, anti-myself you mean? No, no, no, no. I don't think that Palestinians get up in the morning and tell to themselves, 'OK, ah, how Jews I will kill today? I need to kill a Jew. I need to kill...' I don't think they are waking up like this. I think they are waking up like me. They think - will they make money today. Will they have food for the children. And will they sleep good tonight and maybe where will they go with the children maybe to the beach or to a good restaurant. I think that's what every person in the world thinks in the morning. Such sentiments have raised the ire of hard-line nationalists. Alex Miller, a member of the Israeli parliament, the Knesset, has pushed through a law banning Israelis from supporting any boycotts. It's a stupid law. We are still a democratic country and you can say everything. Even that you are making boycott on black coffee. You can say it. It's OK. You sure? Yes. Although I like black coffee. But you are not worried that you might be prosecuted, you might be sued because of your statement? I would be proud to be prosecuted on this law. So far Alex Miller hasn't prosecuted him.

But he has vowed to sue an Arab-Israeli politician, Ahmad Tibi, who supports BDS. I am saying that, violating the new law. I am challenging the Israeli authority to prosecute me. Do you think they will? They - he said he's going to prosecute me. I'm not afraid from that.

Israelis and Palestinians have been holding face-to-face talks for almost two decades. But they're hardly any closer to peace or agreement on future borders. The negotiations are supposed to lead to an independent Palestinian state based on the frontiers before the occupation. But both sides have very different visions of what that means. If Israel were to go back to the boundaries of 1967, it would end here in what's now the middle of Jerusalem. That was one of the armistice lines from the War of Independence. And everything on that side - East Jerusalem, the old city, all the land as far as the River Jordan - was run by Jordan. But when Israel seized all that territory in the 1967 war, it decided to change the map forever. It not only annexed East Jerusalem -

which Palestinians want as their future capital - it settled hundreds of thousands of Jews across the land Palestinians want as their future State. Alex Miller lives deep inside the West Bank in the city of Ariel. It's one of the largest Israeli settlements in the occupied territories. It's home to 18,000 Jews, most of them from Russia. He has big plans for Ariel,

believing it could grow to as many as 60,000 people. It already has a university and that theatre so many artists are boycotting. And he's not worried that almost every other country views these settlements as illegal. Israel's justification for the occupation is security. In the streets of the West Bank, children play games of Martyrs versus Settlers, imitating the violence they've grown up with. Even if a Palestinian state is formed,

Israel insists it will need to control security for any remaining settlers.

Many want the maps re-drawn to put them inside Israel. It is going to be difficult to get things to the point, that both - both people, both nations - get to live equal standard of living and equal life. Two states will not work. Two states will just be a phase into Palestine being wiped off the map,

into creating a one state that is an Israeli state. And so the conflict drags on, as Palestinians give up on talks for protests and boycotts. Daniel Birnbaum believes compromise is still possible, even if it means factories like his must one day move. I know that the people want peace. The people in Israel want peace and they're willing to make sacrifices for it. Certainly I am and everyone I know, OK? There's only a very small extreme group that is really willing to continue to deal with the situation as it is to preserve the land. But by far, probably 95% of Israelis want peace

and will will give back the territories completely, OK? And Jerusalem will probably be an international city. But for now the fight seems as eternal as Jerusalem itself. Closed Captions by CSI