While world attention has been heavily focused on efforts to break the siege of Gaza, Palestinians in the West Bank are pursuing a series of new, nonviolent, strategies challenging the Israeli occupation. What they are primarily seeking, and what the Israeli government is desperately trying to avoid, is clarity about the status of the occupied territories.

Palestinians are insisting that Israel cannot continue to treat the territories occupied in 1967 in a selective manner, regarding settlers and settlements as unambiguously "Israeli" but the Palestinian population as fundamentally alien and outside Israel. The new Palestinian strategies are pressing the uncomfortable but unavoidable question: are these territories part of Israel, or not?

Throughout its policies in the occupied territories, Israel picks and chooses according to its convenience, maintaining an untenable ambiguity regarding the legal and political status of the territory and its residents. This ambiguity begins with the legal and political status of the population of the territories. While Israeli settlers live under Israeli civil law and with all the rights and responsibilities of citizenship, Palestinians live under Israeli civil and military administration with a very different set of laws and without the rights or responsibilities of citizenship. This structure based on dual registers of reality in the same space extends throughout the entire system of the occupation.

The recent flap over Israel's OECD membership is an excellent case in point. Israelis were outraged that Palestinians would object to Israel's attempt to join the organisation, but the Palestinians were making an important point: Israel includes the prosperous, heavily subsidised, settlement economy in all of the "national" economic statistics it submitted for OECD membership, but excludes all aspects of the Palestinian economy that struggles under occupation. It's not just a question of veracity of Israel's figures. It is a demand to know on what basis Israel can consider the settlements part of the "Israeli" economy but surrounding Palestinian villages not.

Clarity is also the ultimate aim of the boycott of settlement goods recently launched by the Palestinian Authority. The boycott serves many purposes, including bolstering the Palestinian economy and harnessing Palestinian spending power in developing its own society.

However, it is unlikely that the boycott will really damage the economic viability of settlements, which are heavily subsidised and are ideological rather than for-profit enterprises. Probably the most important function the boycott performs is to focus everyone's attention on the clear distinction between settlement goods and legitimate Israeli products, and thereby isolate and highlight the distinction between Israel itself and the settlements.

Israel's infuriated reaction to the boycott is a clear indication of how uncomfortable it is with such clarity. The political dangers were illustrated recently when two large Italian grocery chains took a principled decision not to sell settlement products, only to discover that Israel refused to clearly label settlement goods or distinguish them from "Israeli" products generally. As a consequence, the companies decided not to sell any Israeli exports on the grounds that there is no clarity.

Israeli prime minister Binyamin Netanyahu's protestations that the boycott is only hurting the Palestinians themselves rings extremely hollow. If that were true, why are he and his colleagues so upset by it? Israelis indignantly ask Palestinians: are you partners or are you enemies? The answer is simple: partners in peace, security and all legitimate matters, yes; partners in occupation and settlements, no.

Palestinians cannot be expected to acquiesce to, much less subsidise, their own oppression and they have every right to peacefully and lawfully challenge the occupation and demand clarity.

The same logic ultimately applies to the PA state and institution building programme. By developing the framework of Palestinian statehood, the programme forces Israel into the clarity of a simple choice: either gradually and however grudgingly cede more and more attributes of sovereignty in greater and greater parts of the occupied territories to the PA in order to allow the programme to develop, or kill it. The state building programme cannot survive stasis. It requires continuous, even if gradual, expansion. It asks Israel a simple question: are the occupied territories ultimately your country or ours?

Israel is alone in not recognising that it is the occupying power in the territories conquered in 1967. Heretofore its policies have been structured around obfuscation that allows the settlements and the settlers to occupy a legal and political space indistinguishable from Tel Aviv and its inhabitants, except, of course, for all the special subsidies and privileges they are accorded, while all aspects of Palestinian life are characterised by occupation. The Palestinian point is that there cannot be two legal and political registers: a virtual Israel that exists wherever an Israeli settler happens to be and an ambiguous, unresolved occupation everywhere else.

Because peace will depend on ending the occupation, it also requires clarity about the occupation. Palestinians are doing themselves, the world, and ultimately the Israelis as well, a big favour in rejecting Israel's fog of ambiguity and demanding simple, necessary clarity.