The Reagan peace plan, also known as the Reagan Middle East peace plan, was announced by United States President Ronald Reagan during a speech on September 1, 1982. The plan's stated goals was to "reconcile Israel's legitimate security concerns with the legitimate rights of the Palestinians." It proposed a five-year transition period, during which Palestinians in the West Bank and Gaza would obtain full autonomy, and an association of the territories with Jordan.

Background After emerging victorious in the Six-Day War in 1967, Israel occupied the Palestinian West Bank and Gaza Strip, as well as the Syrian Golan Heights and the Egyptian Sinai Peninsula. The Israeli government, particularly after the right-wing Likud came to power for the first time in 1977, began promoting Jewish settlement in the occupied territories. The number of settlers increased by 70 percent between 1981 and 1982, leading to increasing clashes between settlers and Palestinians. At the same time, the Israeli government refused to negotiate directly with the Palestinian Liberation Organisation (PLO), recognized by the U.N. as the representative of the Palestinian people, and moved to suppress any advocacy for Palestinian nationalism, including dismissing elected Palestinian city councils, repeatedly shutting down Palestinian universities, banning Palestinian newspapers, and banning an extensive list of books.

The Israeli occupation of the Sinai Peninsula would come to an end with the Camp David Accords, signed between Israel and Egypt with American mediation in 1978. The Accords, which were negotiated without any Palestinian representatives, also stipulated that the Palestinians must achieve 'full autonomy' and that Israel should withdraw to 'specific military locations' in the West Bank. The PLO, which was backed by the Soviet Union, rejected the 'Camp David conspiracy', believing it detracted from "the complete liberation of all the land of Palestine." When the Reagan administration took office in January 1981, it was preoccupied with the Cold War and viewed America's cooperation with Israel primarily as a means to contain the common Soviet threat, rather than to advance the prospects of Israeli-Arab peace. As well, Reagan viewed the PLO as terrorists and stated he would refuse to negotiate with it even if it accepted United Nations Security Council Resolution 242. Consequently, Reagan and his administration initially largely ignored the Israeli–Palestinian conflict and pressure from the governments of Egypt and Saudi Arabia to help build peace in the region.

In mid 1982, however, Israel invaded Lebanon to end the PLO insurgency in Southern Lebanon and install a pro-Israel government in Beirut, beginning the 1982 Lebanon War. While the war resulted in the expulsion of the PLO from Lebanon, the American public's outrage at the death and destruction during the siege of Beirut prompted the Reagan administration to propose a peace plan."King Fahd called begging me to do something. I told him I was calling P.M. Begin immediately. And I did—I was angry. I told him it had to stop or our entire future relationship was endangered. I used the word holocaust deliberately & said the symbol of his war was becoming a picture of a 7 month old baby with its arms blown off. "

(Reagan diary, Thursday, August 12, 1982)

Main points The plan was based on the outcomes of the Camp David Accords, as well as Security Council Resolutions 242 and 338. Some commentators have described the contents of the plan as "vaguely worded".

The following main points were outlined in a statement by Secretary Shultz before the Senate Foreign Relations Committee on September 10, 1982:

Israeli Sovereignty/Palestinian State. It is the President's belief that the Palestinian problem cannot be resolved through Israeli sovereignty or control over the West Bank and Gaza. Accordingly, we will not support such a solution. We will also not support the formation of a Palestinian state in those negotiations. There is no foundation of political support in Israel or in the United States for such a solution and peace cannot be achieved by that route. The preference we will pursue in the final status negotiations is some form of association of the West Bank and Gaza with Jordan. Self-determination. In the Middle East context, the term "self-determination" has been identified exclusively with the formation of a Palestinian state. We will not support this definition of self-determination. We do believe that the Palestinians must take a leading role in determining their own future and fully support the provisions in the Camp David agreement providing for the elected representatives of the inhabitants of the West Bank and Gaza to decide how they shall govern themselves consistent with the provisions of their agreement in the final status negotiations. Jerusalem. We will fully support the position that Jerusalem must be undivided and that its status must be determined through negotiations. We do not recognize unilateral acts with respect to final status issues. Settlements. The status of Israeli settlements must be determined in the course of the final status negotiations. We will not support their continuation as extraterritorial outposts, but neither will we support efforts to deny Jews the opportunity to live in the West Bank and Gaza under the duly constituted governmental authority there, as Arabs live in Israel.

The plan suggested a five-year transition period, during which the Palestinians in the West Bank and Gaza Strip obtain full autonomy over their affairs. Its purpose would be to prove that the Palestinians are capable of managing their own affairs, and that Palestinian autonomy would not pose a threat to Israel's security.

Failure of the plan Rejection by the Israeli government The Israeli Government, led by Menachem Begin, and the Knesset, quickly opposed the initiative. On 3 September 1982, Begin's cabinet voted unanimously to reject the Plan, releasing an official communiqué claiming that Reagan's proposals "seriously deviate from the Camp David agreement, contradict it and could create a serious danger to Israel, its security and its future." Specifically, the communiqué stated that: The city of Jerusalem was indivisible under Israeli sovereignty and that Palestinian residents of the annexed East Jerusalem could not be given voting rights in a future Palestinian authority; That Israel would need to continue to have jurisdiction over internal security in the Palestinian territories or else the PLO would "perpetrate constant bloodshed;" That Israeli settlement in the Palestinian territories was "a Jewish inalienable right and an integral part of our national security;" That autonomy could only refer to autonomy for residents of the Palestinian territories and not for Palestine as a territory; That the Camp David Accords made no mention of social and economic ties between the West Bank, Gaza, and Jordan; That there was nothing in the Camp David Accords that precluded Israel from achieving full sovereignty over the Palestinian territories after the establishment of an autonomous Palestinian authority; That the American had pledged not to support the establishment of an independent Palestinian state, but that Reagan's Plan "proves this to be an illusion," and that nothing in the Plan would stop King Hussein of Jordan from ceding control over Palestinian to the PLO, at which point the PLO would "conclude a pact with Soviet Russia and arm itself with every kind of modern weaponry" so that it could "launch an onslaught against Israel to destroy her" in coalition with other Arab states such as Iraq, Syria, and Saudi Arabia.

The government further accused Reagan of breaking a 1975 promise that the US would coordinate any peace proposals with Israel. On 4 September 1982, Minister of Defence Ariel Sharon stated in a radio interview that "the U.S. will have no alternative but to drop the proposals because they cannot be implemented, and Israel will not even discuss them." Israeli Minister of Internal Affairs Yosef Burg stated that "we cannot accept that settlements are an obstacle to peace... Eretz Yisrael cannot be restricted to our children," accusing the plan of having given "vitamins and hormones to the PLO." Deputy Prime Minister David Levy stated that "as friends you must know that there is one subject on which there will be no concessions — the idea of the creation of a Palestinian State." On 6 September 1982, the government released the text of a personal letter sent by Begin to Reagan commenting on the Plan in which Begin stated that "A friend does not weaken his friend, an ally does not put his ally in jeopardy," adding that "What some call the 'West Bank,' Mr. President, is Judea and Samaria; and this simple historic truth will never change" and that "you did not, Mr. President, even mention the bravery of the Israeli fighter nor the great sacrifices of the Israeli Army and people." On 8 September, Begin was quoted in an Israeli military magazine as accusing the American government of seeking to overthrow the Israeli government, proclaiming that "Our American friends must know that Israel is not Chile and I am not Allende."

In an early February 1983 speech to the Knesset, Begin reiterated his opposition to the Reagan Plan, saying that "one cannot freeze the settlements just as one cannot freeze life itself" and that "the only agreement signed was the Camp David agreement and this is the only agreement that should be negotiated." In early April 1983, Spokesperson for the United States Department of State John Hughes stated that the American government would "do our best to assure that the results of these negotiations are not prejudiced from the outset by activities of any party which reduce the prospects of a negotiated peace," specifically citing Israeli settlements, in an attempt to convince the Jordanian government to continue working on Reagan's Plan. In response, Israeli Minister of Defence Moshe Arens accused the US of trying "to dictate to another state its security requirements," while spokesperson for the Israeli Embassy in Washington Víctor Harel stated that "we will not accept any preconditions for negotiations from any party, including Jordan."

Arab League counter-proposal The Arab League did not directly address the initiative but presented its own proposal in November 1982, the Fahd Plan, which conflicted with Reagan's proposal on key issues. Among the notable disagreements were the Palestinian right of return and the total dismantlement of settlements. The Israeli government rejected the Fahd Plan, stating that it contained "useless proposals" and "does not contain any substantial new elements that differ from traditional Arab positions." The Palestinian National Council, on the other hand, voted in favour of accepting the Fahd Plan.

Rejection by the PLO