Following the events of 1970-71, domestic policy aimed principally at promoting national unity among the Jordanian population. This desired unity was considered the ultimate guarantee for the survival and security of Jordan. Once achieved, Jordan could be transformed into a model Arab state by opening the way for a full return to democracy.
For the moment, however, matters of security and order remained the immediate concern of the regime. As political stability gradually returned, investment began to flow back into the Kingdom. Jordan witnessed unprecedented growth levels in a number of areas, especially the services, construction and financial sectors. Jordans rapid economic and social development also owed much to the oil boom enjoyed throughout the Middle East during the mid and late 1970s. Large remittances flowed in from the 400,000 or so Jordanian citizens who supplied skilled labor mainly to the oil-rich Gulf states.
The outbreak of the Lebanese civil war in 1975 led to large-scale fighting in the capital city of Beirut, destroying much of the citys banking and insurance infrastructure. Accordingly, much of this regionally-oriented sector relocated to Amman, fueling a boom in service industries. By the early 1980s, Amman had been transformed into one of the most dynamic Arab capitals.
Although the Kingdoms economy was enjoying a boom, the Israeli occupation of Arab lands hindered the progress of the region toward justice and prosperity. Jordan therefore pressed continuously for a coordinated Arab diplomacy in the effort to liberate the occupied West Bank and Arab Jerusalem from Israeli occupation.
Among these efforts was a 1972 plan offered by King Hussein in which he proposed the establishment of a United Arab Kingdom. This plan would reorganize the Kingdom along federal lines, with the East Bank and West Bank each having its own parliament and administration. Matters relating to foreign affairs and defense would be dealt with by a central governmental structure with equal representation from both banks. While the proposal met with some support, rival nationalisms and mutual suspicions between East Bank Jordanians and West Bank Palestinians ensured enough opposition to effectively veto the idea.
Events soon overtook the proposed United Arab Kingdom plan, however. Jordan was not directly involved in the October War of 1973, although it did contribute by sending troops to assist Syria. With Israel overconfident in its ability to defeat the Arabs militarily, and failing to respond to Arab peace overtures, the Syrians and the Egyptians launched a surprise attack to regain the Golan Heights and the Sinai, lost to Israel in 1967. The Arab armies initial military successes, especially the amphibious crossing of the Suez Canal and the storming of the Bar-Lev Line, reversed much of the psychological setback caused by the 1967 defeat, disproving the myth of Israel military invincibility. However, lack of coordination between Egypt and Syria, combined with American resupply of Israeli stocks, eventually allowed Israel to gain the upper hand. In retaliation for assisting Israel, Arab Gulf states announced the suspension of oil exports to the United States. Cease-fires ending the war lead to a series of disengagement agreements between Israel, Egypt and Syria. This process culminated for Egypt and Israel in the Camp David Accords of 1978. However, Israel annexed Syrias Golan Heights in 1981, and Israel and Syria remain in a state of war.
In the face of a brutal Israeli occupation, Palestinian nationalism continued to grow. At an Arab summit conference held in Rabat, Morocco in 1974, King Hussein agreed, along with all the other Arab leaders, to a summit declaration recognizing the Palestine Liberation Organization as the sole, legitimate representative of the Palestinian people. Consequently, responsibility for negotiating the return of the occupied Palestinian lands was transferred from Jordan to the PLO.
Jordans commitment to the realization of Palestinian rights was further exemplified in its reaction to the Camp David Accords of 1978. The treaty between Egypt and Israel shattered the near-term chances for a just and comprehensive settlement of the conflict, as it neither required the Israelis to withdraw from occupied territories (excluding the Sinai) nor asserted Arab sovereignty over them. Along with most Arab leaders, King Hussein rejected the treaty as destabilizing to the region.