Daniel Pipes argues it will help in a strange sort of way.
[..] For Palestinians, hope derives from a perception of Israeli weakness, implying an optimism and excitement that the Jewish state can be eliminated. Conversely, when Palestinians cannot see a way forward against Israel, they devote themselves to the more mundane tasks of earning a living and educating their children. Note that the Palestinian economy peaked in 1992, just as, post-Soviet Union and post-Kuwait war, hopes bottomed out to eliminate Israel.
Exhilaration, not hardship, accounts for bellicose Palestinian behavior. Accordingly, whatever reduces Palestinian confidence is a good thing. A failed economy depresses the Palestinians’ mood, not to speak of their military and other capabilities, and so brings resolution closer.
Palestinians must experience the bitter crucible of defeat before they will drop their foul goal of eliminating their Israeli neighbor and begin to build their own economy, polity, society, and culture. No short-cut to this happy outcome exists. Who truly cares for Palestinians must want their despair to come quickly, so that a skilled and dignified people can move beyond its current barbarism and build something decent.
The huge and wasted outpouring of Western financial aid, ironically, brings on that despair in two ways: by encouraging terrorism and by distorting the economy, both of which imply economic decline. Rarely has the law of unintended consequences worked so imaginatively.
I totally agree. The money will not be used for peace but for war. It will maintain a culture of dependancy. It will sustain all the corruption and the bloated bureaucracy.
But without money peace would be the only option.
“Candy is dandy but liquor is quicker.” Ogden Nash.
Thus drowning them in money will work but starving them will work quicker.