Israeli soldiers drive an armored personal carriers during a training exercise near the Israel-Gaza Border, on June 7, 2015.
MENAHEM KAHANA—AFP/Getty Images
June 8, 2015 10:50 AM EDT

The economic reward for settling the Israel-Palestinian conflict with a two-state solution? $173 billion.

That’s according to a new analysis by the RAND Corporation, which calculates that a two-state solution would result in a $123-billion economic gain for the Israeli economy and a $50 billion boon for Palestinians. That’s an average per capita income increase of $2,200 (5%) for every Israeli and $1,000 (36%) for every Palestinian in the Gaza Strip and West Bank.

But if a two-state resolution is not reached in the next 10 years, says the study, the economic hit would be greater than the gains: gross domestic product in the West Bank and Gaza would shrink by 46%, and in Israel by 10%.

“The point is to demonstrate that there is money on the table,” Charles P. Ries, a RAND vice president told the New York Times. “There are big gains, and people don’t realize how big they are.”

RAND measured the impact of factors like trade and tourism, as well as Palestinians’ renewed ability to travel more freely and exploit mineral resources in the region.

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