From time to time, I visit an Israeli blog where much of the discussion has been focused on “demographic problems”—code words for the rising concern among Israelis that if rates of growth of Jewish and Arab populations in the Holy Land continue at their current levels, the Jewish state will cease to be Jewish.

One blogger, whose screen-name is “Logic,” recently came up with an original idea: the solution lies in converting Israel’s Muslims to Judaism and encouraging intermarriage between Jews and Arabs, leading to assimilation of the Arabs into the majority Jewish population. “In the current situation in which Jews dominate the state’s culture, intermarriage would help bring to the world a new generation of kids with Jewish instead of Arab identity,” Logic explained.

That even intelligent Israeli Jews like Logic fly into fantasyland when they ponder ways to maintain their eroding majority suggests that an Iranian nuclear bomb is not the main threat to Israel’s existence. Instead, it is the demographic bomb that is causing Israelis sleepless nights. After all, Israel’s own nuclear capability would probably succeed in deterring Iran. It is less likely that Israel’s Jews would be able to defeat the Muslims in the battle of the birth rates. In that biological struggle, Palestinian Muslims, with their average birth rates ranging from 7 children per woman in the Gaza Strip to 5.4 in the West Bank to 4.7 in Israel, seem to be besting Israeli Jews, whose average birth rate is 2.6. Is it surprising that the most popular name given to baby boys in the Jewish state these days is Muhammad?

In fact, in the area stretching from the Mediterranean Sea to the Jordan River —which includes the state of Israel within the 1967 “green line,” the West Bank, and the Gaza Strip—non-Jews are edging towards parity with the Jewish population of about 5.5 million. If one adds to the 4.5 million Palestinian Arabs (1.4 million in Israel proper, 1.7 million in the West Bank, 1.1 million in Gaza, and 300,000 in East Jerusalem) the more than 300,000 Israeli citizens who are classified by Israel’s Central Bureau of Statistics as “others” (mostly Christians who have immigrated to Israel from the Soviet Union, as well as more than 600,000 foreigners residing in the Jewish state) there are probably close to 11 million people living in the Holy Land, divided almost equally between Jews and non-Jews. And even if one excluded the “others” and foreign workers, the point of parity between Jews and Arabs in Eretz Israel/Palestine could arrive before 2010, according to Sergio Della Pergola, a Hebrew University demographer.

From the perspective of the secular Zionist leadership that still dominates Israel and would like to preserve a democratic Jewish ethos, the reality on the ground is already worse than the numbers indicate. In Galilee, Arabs constitute at least 50 percent of the population, and as a result of illegal migration of Arabs from the occupied territories to Galilee, combined with migration of Jews from the area, the Arabs may have only a slim demographic edge. At the same time, in the Negev Desert, Beduines compose 25 percent of the population, and in the area around Beer Sheba, where 250,000 Jews live, Beduines constitute about 40 percent of the population and are expected to become a majority of 350,000 there before the year 2020. Arnon Soffer, one of Israel’s leading demographers, contends that the combination of large population growth, illegal settlements, and rising crime rates “is going to be a catastrophe” and predicts “an intifadah of major proportions, beyond imagining” among the Negev’s Beduines.

But it is in Jerusalem that the nation’s demographic dilemmas are being exposed in a dramatic way. At a recent conference in the city, attended by the Jewish mayor, Uri Lupolianski, demographers predicted that by 2040, Jerusalem will have an Arab majority and the city will probably be led by an Arab mayor. While he expects that Jews will still maintain a majority of about 65 to 70 percent by 2020, Sergio Della Pergola believes that when it comes to those under the age of 15, the Jewish majority will probably narrow to less than 55 percent in the next 13 years.

At the same time, there has been a steady migration of secular middle-class Jews from Jerusalem to the Tel Aviv-Haifa corridor on the Mediterranean coast, leaving behind a large ultra-Orthodox Jewish population—Haredim —most of whom are alienated from the secular Jewish majority, do not serve in the military, and refrain from marrying into non-ultra-Orthodox families. That Lupolianski himself is a Haredi reflects the growing demographic power of this group in Jerusalem, a city that two decades ago was led by the cosmopolitan and liberal mayor, Teddy Kollek. Thus, with secular Jews and Christian Arabs leaving the city in droves, the demographic battle in Jerusalem could be led by the non-Zionist Jewish Haredim and fundamentalist Muslims, a nightmare scenario for Israel’s Westernized Zionist elites. The Haredim, whose birth rate is higher than that of secular Israelis, number about 600,000, and their percentage of the Jewish population is bound to grow in the coming years.

While there is no doubt that the massive immigration to Israel from the former Soviet Union has helped secular Jews to preserve their majority inside Israel, it has also given birth to a new ethnic-religious community of between 200,000 to 300,000 Hebrew-speaking Christians, many of whom even serve in the Israeli army, which explains why the military now allows new recruits to pledge allegiance using the New Testament.

It is this demographic reality that explains why Israeli leaders, including many members of the nationalist political Right like former Prime Minister Ariel Sharon and his successor Ehud Olmert, who not long ago were advocating that the Jewish state annex Judea and Samaria, are now favoring an almost complete Israeli disengagement from these territories. For Sharon and Olmert, and for many members of Israel’s elite, the children of the secular European Zionist settlers who founded the State of Israel, there is a growing recognition that Israel’s future as a Western Jewish state is on the line. If Israel continues to occupy the Arab territories, its secular Zionist identity will be diluted and their children will end up leaving a country in which Jewish Haredim and Muslim fundamentalists continue fighting over the holy sites in Jerusalem. Two of Olmert’s children live in the West (in New York and Paris), where they have joined the children of Ehud Barak and Yitzhak Rabin and over 500,000 former Israelis, most of whom live in North America.

The bottom line is obvious to most Israelis: there is still a small Jewish majority between the Mediterranean and the Jordan River, but owing to current demographic trends, it is quickly diminishing. That means that in a few years, Israel must face the most dramatic consequence of its demographic trajectory: it cannot preserve the two central components of its national identity—being Jewish and democratic. If it remains in the territories, it will have to grant civil rights to the millions of Arabs who are bound to press for a change in the identity of Israel as a Jewish state. And if it refuses to permit the Gazans and the West Bankers to vote in Israeli elections, it will cease to be a democratic state, and would be transformed into a Middle Eastern version of apartheid-era South Africa.

Paradoxically, rising public support for withdrawing from the biblical lands in the West Bank following last year’s unilateral disengagement from the Gaza Strip, including the uprooting of 9,000 Jewish settlers, is taking place when Israel is under little international pressure to move in that direction. President George W. Bush has basically given Israel a free hand in responding to the second Palestinian Intifada. In fact, the decision by former Prime Minister Sharon to withdraw from Gaza was not received with much enthusiasm by policymakers in Washington, who expressed concern that the move would project an image of weakness on the part of Israel. Sharon and his successor Olmert, who have never had much confidence that bilateral negotiation between the Israelis and the Palestinians would produce a viable agreement. Both had hoped that with Washington’s blessing Israel could continue pursuing its unilateral strategy of withdrawing from the heavily Arab-populated areas of the West Bank while maintaining control over the large Jewish settlements there and over East Jerusalem and by building a security fence that would separate an Israel with a Jewish majority of 75 to 80 percent from the Palestinians in the occupied territories.

While the fence seems to have deterred Palestinian terrorists trying to enter Israel, it has certainly not helped pacify the Gazans and the West Bankers, whose economic conditions have worsened as a result of an economic embargo imposed on the Hamas-led Palestinian Authority and who struggle with restrictions on their movement as a consequence of the fence that separates them from Jerusalem. The launching of missiles from Gaza into Israel and the rising Israeli-Palestinian violence in the aftermath of last year’s kidnapping of an Israeli soldier have led many Israelis to conclude that only a formal agreement between Israel and the PA could create the conditions that would enable Israel to withdraw from the West Bank. The catch is that even if a moderate Palestinian government replaced Hamas any time soon, no Palestinian leader would ever agree to continuing Israeli control of the Jewish settlements in the West Bank and to exclusive Israeli control of Jerusalem. He would also be expected to demand that Israel agree to recognize the “right of return” of Palestinian refugees, which the political Right in Israel would not accept.

The conventional wisdom in Israel now is that no Israeli-Palestinian accord, and by extension, no Israeli withdrawal from the West Bank, could take place without a more activist diplomatic role by Washington, which will probably not happen before President Bush leaves office. The next president will likely launch a diplomatic campaign to restore American credibility in the world, the centerpiece of which would be an effort to resolve American problems in the Middle East by bringing an end to the occupation of Iraq, re-establishing diplomatic ties with Iran, and reviving the Israeli-Palestinian peace process.

But it is not clear that with so much blood shed by both sides since the start of the second Intifada in 2000, Israelis and Palestinians would be able to agree on the final status of the territories. An American envoy might be able to help work out a “cease-fire plus” agreement that would lead to the establishment of a stable Palestinian government, the end of the economic sanctions, the start of Israeli disengagement from some parts of the West Bank coupled with the complete cessation of the buildup of Jewish settlements, and the implementation of security arrangements backed by European troops. After a year of two of relative peace and after aid and investment starts to flow into the Palestinian territories and Israel is satisfied with the security arrangements, the two sides might be ready to confront the core issues that separate them: Jerusalem, the future of the Jewish settlements, and the “right of return” for Palestinian refugees.

One of the ideas discussed before and during the Camp David peace talks of 2000 was to exchange an Israeli territory—the so-called “triangle” around the Arab town of Umm-el-Fahm that is adjacent to the border with the West Bank and in which between 200,000 to 300,000 Arabs (who are Israeli citizens) reside—for the Palestinian territories in which a similar number of Jews have settled in recent years. The proposal would have made sense from an Israeli Jewish perspective since it would have reduced Israel’s Arab population by about 250,000 and would have allowed the Israelis to withdraw from the territories while retaining their control over the Jewish settlements there. But it was rejected by the Arab Israeli citizens who preferred to remain in the prosperous Israeli state instead of having their towns and villages integrated into a Third World state called Palestine.

But Avigdor Lieberman, an immigrant from Russia who is the leader of the nationalist Yisrael Beytenu Party and who has joined the current ruling coalition as minister of strategic affairs and as a deputy prime minister, insists that Israel would have no choice but to force these Israeli Arabs to join their Palestinian compatriots in their new state. Lieberman, who lives in one of the Jewish settlements in the West Bank, represents the political power that the nationalist-religious bloc still retains in Israel and that, together with the fundamentalists of Hamas, would make it difficult for the most competent American negotiator to help the two sides reach a sustainable ceasefire, not to mention an accord on the final status of the territories. Moreover, the election of a foreign-policy clone of George W. Bush—a John McCain or a Rudy Giuliani—would make it even less likely that Washington would consider jumping into the cold water of Israel-Palestinian negotiations and, if anything, would place the issue on the policy backburner as the new president continues to emphasize the role Israel supposedly plays in the war against “Islamofascism.”

Under that scenario, Israel, led by, say, the neocons’ favorite politician, Benjamin Netanyahu, could take steps to consolidate and expand the Jewish settlements in the territories while continuing to erect the security fence. It would be only a matter of time before the boiling anger and resentment in the territories exploded into a third and more violent Intifadah. A Palestinian terrorist attack à la 9/11 in Tel Aviv or an attempt by Israeli right-wingers to blow up the Islamic holy sites in Jerusalem could produce a major escalation that would turn into an all-out civil war, leading to ethnic cleansing in Israel and the occupied territories and igniting civil unrest among Muslims worldwide. Pressure, including threats of oil embargoes by Saudi Arabia and Indonesia, would mount on the Europeans and the Americans to “do something,” resulting in the deployment of NATO troops to the Holy Land to separate the two warring sides and the convening of a Dayton-style international conference that imposes an agreement on the Israelis and the Palestinians.

But even under scenarios that conclude with eventual Israeli disengagement from the Arab occupied territories, the Jewish state in which 1.4 million Arab citizens constitute more than 20 percent of the population could still face a major challenge to its identity.

Arab Israelis have long complained of being shortchanged in government allocations for public services, education, and health and social benefits. In recent years, leaders in the community have been proposing that the Arabs in Israel start campaigning not only for civil rights but also for collective rights as a national-cultural community, not unlike what the Basques in Spain, the Scots in Britain, or the Kurds in Iraq, have been trying to achieve. Leading figures, including members of the Knesset, lawyers, and academics have published a manifesto rejecting the idea of Israel as a Jewish state and demanding that Israel become “a state for all its citizens” and not only for its Jews. They have asked that both the Israeli flag and the national anthem be changed to represent non-Zionist themes. Other Arab opinion-makers who recognize that the Israeli public would reject such demands have proposed that the Arabs in Israel demand political and cultural autonomy in part of Galilee, the “triangle,” and the Negev, which could be seen as a first step towards seceding from Israel and uniting with the Palestinian state, leaving the Jewish state with a smaller territory.

Israelis who are worried about the ticking demographic bomb warn that without Israeli withdrawal from the Arab territories and the establishment of a Palestinian state—the “two-state solution”—Israel would eventually have to accede to the demands of the Arabs who will make up at least 50 percent of the population of the entire Holy Land and grant them civil and political rights. This is the basis for the “one-state solution” that Palestinian-American Ali Abunimah describes in his book, One Country: A Bold Proposal to End the Israeli-Palestinian Impasse, in which Jews and Arabs would share power on the national, regional, and local levels—rather as the Flemish and Walloons live together in Belgium.

The problem is that many of the experiments with binational and multinational states have led to either violent (Yugoslavia) or peaceful (Czechoslovakia) divorces, and Belgium, like Canada, is not a binational but merely a bilingual state. It’s difficult to imagine that Jews and Arabs, each representing an ancient civilization that has been traumatized by history and are now in the midst of complex and sometimes violent changes, are going to live happily ever after in one state. Moreover, since each community is divided among many subgroups—secular Jews, Haredim, modern Orthodox, and Hebrew-speaking Christians on the Israeli side, secular Muslims, Christians, Muslim fundamentalists, Druze, Circesians, Beduines, and Armenians on the Arab side—the political model that could evolve in Israel-Palestine would probably resemble the multi-ethnic and multi-religious system that exists in Lebanon today.

The “Lebanonization” of the Holy Land would clearly be the worst-case scenario, unleashing even more violence and full-blown civil war. Perhaps when it ends the two sides won’t have any other choice but to divide the land into, yes, two states. 

Leon Hadar is a Cato Institute research fellow in foreign-policy studies and author, most recently, of Sandstorm: Policy Failure in the Middle East.