The Arabs rejected the idea, and this rejection is still being looked at as a proud moment today by Arabs, even though it resulted in the Jews being politically organized and ready to take over the government institutions in 1948. Had the Arabs accepted the offer, there might very well have been a Palestinian state in the West Bank in 1949.
American Zionism found a formerly secret British document on this incident. While the document I linked to gave many official reasons that the Arabs rejected the formation of an Arab Agency, there was another reason that they rejected it.
The Arabs felt that if they reject the British offer, the British would offer more. And they got that impression from the Parliament members who were pro-Arab and anti-Jewish:
This was seen in a telegram from High Commissioner Herbert Samuel to the Secretary of State:
By rejecting the Arab Agency, the Arabs rejected the entire concept of Arab agency. They rejected the idea that they themselves could do the work to achieve their goals. Instead, they listened to their supposed Western allies, who gave them bad advice, but advice that fit their worldview.
They chose to wait for the West to do their bidding.
It has now been ten years since Mahmoud Abbas literally bragged about his own rejection of a peace plan with Israel in an interview with the Washington Post's Jackson Diehl, using the exact same logic as his 1923 predecessors. The offer might be good - but if we wait, it will get better:
In our meeting Wednesday, Abbas acknowledged that Olmert had shown him a map proposing a Palestinian state on 97 percent of the West Bank -- though he complained that the Israeli leader refused to give him a copy of the plan. He confirmed that Olmert "accepted the principle" of the "right of return" of Palestinian refugees -- something no previous Israeli prime minister had done -- and offered to resettle thousands in Israel. In all, Olmert's peace offer was more generous to the Palestinians than either that of Bush or Bill Clinton; it's almost impossible to imagine Obama, or any Israeli government, going further.Palestinian Arabs simply refuse to think critically about themselves. This is because they have created a culture where critical thinking is discouraged, practically forbidden in the media or in academia. When Western "experts" tell them things they want to believe, they will latch onto that - that Jews are Khazars, that the Temples never existed, that the Holocaust was exaggerated and was the Jews' fault anyway.
Abbas turned it down. "The gaps were wide," he said.
Abbas and his team fully expect that Netanyahu will never agree to the full settlement freeze -- if he did, his center-right coalition would almost certainly collapse. So they plan to sit back and watch while U.S. pressure slowly squeezes the Israeli prime minister from office. "It will take a couple of years," one official breezily predicted. Abbas rejects the notion that he should make any comparable concession -- such as recognizing Israel as a Jewish state, which would imply renunciation of any large-scale resettlement of refugees.
Instead, he says, he will remain passive. "I will wait for Hamas to accept international commitments. I will wait for Israel to freeze settlements," he said. "Until then, in the West Bank we have a good reality . . . the people are living a normal life." In the Obama administration, so far, it's easy being Palestinian.
This is why they still believe that world pressure will force Israel to make concessions to them without them making any of their own. Or that if Netanyahu loses the elections, there will be a better peace offer than Olmert's.
This is wishful thinking, not actual analysis. It is encouraged by their supporters in the West, who tell them what they want to hear. They will simply refuse to even consider that there are other facts.
If their Western fans really wanted a Palestinian state, they would tell the Palestinians the truth - that they need to negotiate seriously, that Israel has red lines that will never be crossed no matter which party is in power, that they have already lost much of Arab public opinion and are in danger of losing the rest, that Europe is not as much in their pocket as they like to believe, that anti-Israel UN resolutions won't make Israel compromise on its security to be better liked at that failed institution.
Instead, Abbas will hold court in Ramallah as leftist Jews and EU officials come to kiss his ring and tell him how wonderful he is. Not one Palestinian newspaper will dare tell him that his worldview might be skewed. Not one Westerner will tell him that a Palestinian state is further away than it has been since Oslo.
Palestinian leaders choose to live in a fantasy world where the European and leftist American dhimmis will jump and do their bidding while they sit back and wait for things to get better. This is preferable to them actually making decisions and doing actions to help their people
Just like 1923.