It’s March 2, 2010, and Sari Nusseibeh, Prime Minister of the Israel/ Palestine Federation (IPF) and his deputy, Yossi Beilin, are in Washington to meet with President (Hillary) Clinton. The two are scheduled to exchange jobs in four months, when Beilin will occupy the Prime Minister’s office in the joint capital of Jerusalem, a transfer of power based on the September 2007 Brussels Accord, under which the states of Israel and Palestine agreed to share political control.

Ten years ago, at the height of the al-Quds Intifada, very few Israelis and Palestinians could have imagined the two peoples would opt to live together as citizens of the same state. In fact, at the start of the decade, much of the talk in Tel Aviv and Ramallah was about political divorce or “separation.” Palestinians wanted an end to the Israeli occupation of the West Bank and Gaza and the removal of the Jewish settlements that were established in “Judea and Samaria” after 1967. Israelis hoped that a security fence would help reduce the number of suicide bombers entering Israel. But instead of bringing an end to the vicious circle of violence, the fence only perpetuated Israeli control over the West Bank by protecting the expanding number of Jewish settlements without providing security. The Palestinians were confined to a series of isolated cantons, and contrary to Israeli hopes, terrorism continued to rise, with many of the suicide-terrorist acts committed by Palestinian citizens of Israel or those who resided in the neighborhoods of Arab East Jerusalem that had been formally annexed by Israelis. The conflict between the Israelis and the Palestinians was taking the form of a never-ending civil war that was devastating the two communities, where loss of lives and ruined economies, combined with a sense of hopelessness, resulted in the emigration of their best and brightest to safer and more prosperous destinations.In October 2005, just when it looked as though the Israelis and the Palestinians were marching hand-in-hand on the road to mutual self-destruction, a political earthquake shook the status quo. Nusseibeh, then president of al-Quds University in Jerusalem, and several other liberal Palestinian political activists and intellectuals held a press conference in Jerusalem and demanded that they be granted Israeli citizenship like the more than one million Arabs who are citizens of Israel. “We are pressing now for equal political and legal rights within a single, democratic Israel, and we are confident that our Israeli brothers and sisters will welcome us and that together we will build a free and democratic state in which Jews and Arabs will live together in peace,” Nusseibeh said.

“For two decades, all of us who gathered here were the leading proponents of the establishment of a Palestinian state to exist alongside Israel, the so-called two-state solution. But continued expansion of Jewish settlements has rendered the notion of an independent Palestinian homeland in the West Bank and Gaza unworkable, and the one-state solution looks more realistic,” he explained. “Some of the Palestinians—about 1.5 millions Arabs who live in Haifa, Lydia, Nazareth, and Um El Fahim—are Israeli citizens who elect candidates to the Knesset and enjoy other civil rights. Then there are about 250,000 Arabs in East Jerusalem who are residents of Israel but don’t have Israeli citizenship. And of course, there are close to 3.5 million Palestinians in the West Bank and Gaza, under military occupation, who need permits to visit family members in neighboring villages. While the 4.5 million Palestinian refugees in the Middle East and elsewhere cannot return to Jaffa or Haifa, if Woody Allen decided to immigrate to Israel tomorrow, he would enjoy full political and civil rights, and he could live anywhere in Israel or could join the 400,000 Jewish settlers who reside in communities in East Jerusalem, the West Bank, and Gaza.” Nusseibeh concluded, “The Americans portray Israel as the ‘only democracy in the Middle East,’ and we want them to help us win our basic civil rights as citizens of a democratic state.”

The rest, as they say, is history. The new civil-rights movement transformed the shape of the Israeli-Palestinian conflict, winning the support of Israeli political activists and intellectuals and culminating in the June 2006 March on Jerusalem led by aging American Jewish and black civil-rights campaigners from the 1960s, demanding that Israel grant citizenship to its Arab residents in the West Bank and Gaza. Some of the speakers referred to the Federation of the Fertile Crescent (FFC) of Kurds and Arabs that was established in the former Iraq in 2004 as a model for peaceful co-existence. And now President Clinton welcomes the two in a ceremony on the South Lawn of the White House, where many Americans hear for the first time the national anthem of the IPF, “Sing My Beloved Holy Land,” which was composed by American-Israeli conductor and pianist Daniel Barneboim in memory of his late friend, the American-Palestinian scholar Edward Said. First Husband Bill Clinton, sitting in the audience, next to his old pals Yasser Arafat and Shimon Peres, could be seen shedding a tear. …… Yes, it’s the alarm clock ringing. You had another of those sweet, sweet dreams. Israeli and Palestinian intellectuals and their colleagues in the West may have embraced a new fad, One State for Two Peoples, the idea that Arabs and Jews could co-exist peacefully in a bi-national state in the area stretching from the Jordan to the Mediterranean Sea, Historical Palestine (the Arab view) or the Land of Israel (the Jewish perspective). If you buy into their predictions, Israelis and Palestinians are on their way to establishing a Middle Eastern Switzerland that would make Tom (“countries with McDonalds don’t go to war against each other”) Friedman and the other prophets of globalization proud. In the struggle between the “olive tree” (Friedman’s metaphor for outdated nationalism, ethnicity, and religion), and the Lexus (which stands for democracy, open markets, the free flow of information, people, and money), the Lexus has won. The new IPF proves it, as Friedman will probably be reporting from Tel Aviv and Ramallah in a few years. Young and hip Israelis and Palestinians are surfing the Internet, watching MTV, and making money in a new high-tech start-up in the IPF’s Silicon Wadi. It’s exactly what those trendy Arabs and Kurds are doing in Iraq in 2010, according to Kenan Makiyah, the Prime Minister of the FFC who recently addressed the graduating class of Cheney University in Baghdad, where Ambassador Richard Perle was in attendance. “We are all Iraqi neoconservatives now,” Makiyah stated, noting that in the new Iraq the “anachronistic identities” of ethnicity and religion have disappeared. (His entire speech will be available in the new Arabic supplement of Commentary.)Indeed, there is that twilight zone of Middle Eastern democratic fantasy where the Wilsonians on the Right and the Left find common ground. “In a world where nations and peoples increasingly intermingle and intermarry at will; where cultural and national impediments to communications have all but collapsed; where more and more of us have multiple elective identities and would feel falsely constrained if we had to answer to just one of them; in such a world Israel is truly an anachronism,” concludes leftist historian Tony Judt, who in a recent article in the New York Review of Books all but dismissed the idea of an Israeli-Jewish state and by extension its mirror-image, a Palestinian-Arab one, and joined the chorus of those advocating a bi-national state. As he sees it, the world is characterized today by a “clash of cultures” between “open, pluralist democracies and belligerently intolerant faith-driven ethno-states.” Israel, he warns, risks falling into the “wrong camp.” Again, if one assumes that an independent Arab Palestinian state would probably share the kind of radical Arab nationalism and militant Islam that pervades to one degree or another all the states in the Middle East, Palestine, like Israel, is also bound to become a dysfunctional anachronism.

So it’s good-bye anachronistic nation-state and hello borderless world, that is, less border between Israel and the West Bank and Gaza. Since most demographers expect that Jews in historic Palestine/Israel will fall to 50 percent by the end of the decade and to less than 40 percent by 2020, those who propose the granting of Israeli citizenship to Arabs in the occupied territories assume that a majority of the citizens of the new Israel would choose to change the exclusive Jewish character of the state. Hence, one way to square the circle of conflicting Jewish and Arab identities would to form a bi-national Israeli-Palestinian state. According to this arrangement, Israel and Palestine would each have their own institutions and elected representatives that, together, promote the interests of both nations within a central government. Alternatively, a union of states could provide another framework for co-existence, but with greater autonomy for the two nations. In this case, Palestinian Arabs and Israeli Jews would be citizens of respective states but may reside anywhere within the union. This would enable people to live and work freely, as prescribed by federal institutions, while electoral rights would be limited to respective national governments.

Trying to mobilize public support for the one-state solution, on Sept. 18, 2003, a group of Israeli and Palestinian academics and activists launched the Association for One Democratic State in Palestine/Israel. They note that the proposed solutions to the conflict in Palestine/Israel have failed because they were predicated upon a division of land that cannot be divided without creating further injustice. The association “is convinced that the creation of one democratic state is the only viable, long-term solution to the conflict.”

Establishing a bi-national state is actually not a new scheme but an intellectual relic of the past that has been excavated by Judt and company. It was first proposed by Judah Magnes, an American-born Zionist who immigrated to Palestine in 1922, where he was involved in the establishment of the Hebrew University and served as its president. Magnes advanced a model of a bi-national state in which all would share equal rights. This was the view promoted by the group Berit Shalom (Peace Union), which Magnes helped found in 1925. But while the concept of a bi-national state was backed by a few Zionist-Marxist groups (as well as the Communist parties in the Middle East), it was rejected by the leaders of both and Jewish and Arab communities in Palestine, with the majority of the groups in the Zionist movement adopting a platform based on the partition of the country between a Jewish and an Arab state.

Following the 1967 War and the Israeli occupation of the West Bank and Gaza, a few Israelis toyed with the idea of annexing the territories while providing the Palestinians with a form of political autonomy in separate cantons or as part of a “functional” system in which the Palestinians would be residents of Israel but citizens of Jordan. But these and other models still assumed that Israel would maintain its Jewish identity as a state with the Star of David national flag and a set of laws and regulations (including the Law of Return) that gave preference to the Jewish citizens of the state and promoted its “Judaization” by encouraging immigration of Jews to Israel. Similarly, when Yasser Arafat and the Palestine Liberation Organization (PLO) raised the proposal for a “secular and democratic state” in a Palestine, they were referring to an Arab state in which Jews would supposedly enjoy religious freedoms like the Christian Copts in Egypt or communal autonomy like the Christian Maronites in Lebanon and that would become part of the “Arab Nation” (and by extension, a member of the Arab League).

If some Israelis were offering the Palestinian-Arabs opportunity to join a Zionist Israel, Palestinians were suggesting that Israeli-Jews become part of an Arab Palestine. Those political marriage proposals were dismissed by the respective leaderships and publics on both sides, while the only two serious ideas considered were the establishment of a Jordanian-Palestinian federation (in the East and West Banks of the Jordan) or the creation of an independent Palestinian entity in the West Bank and Gaza. Israel could then form a customs union or perhaps an economic market with its neighbor to the east.

One of the leading peace activists in Israel, Uri Avnery, who immediately following the 1967 War called on Israel to encourage the Palestinian leadership to establish an independent state in the West Bank and Gaza with its capital in East Jerusalem, assumed that at some point an independent Palestine and Israel would take steps to form a federation of the two states or a looser confederation with a joint capital in Jerusalem. He argued that such realities as geography (the need to maintain a link between Gaza and the West Bank as well as between West and East Jerusalem), demography (the existence of a large Palestinian minority inside Israel), and economics (access to water resources, trade ties, labor movement) would make it impossible to separate the two states and that it would be in their mutual self-interest eventually to develop an economic and political union. But his underlying assumption was that a process towards political and economic integration would be evolutionary, and its pace would correlate with the level of “de-Zionization” of Israel and “de-Arabization” of Palestine. Israel would be transformed into a normal “post-Zionist” state based on secular Israeli identity that would de-emphasize its ethnic and religious ties to the Jews in the U.S. and elsewhere. At the same time, the notion of a united Arab Nation would be replaced with a sense of Egyptian, Iraqi, Syrian and, yes, Palestinian national identities, leading a new Middle East in which non-Arab entities such as Kurds and Israelis would be integrated. As that process accelerated on both sides, Israelis and Palestinians would be ready for a political marriage à la the English-speaking and French-speaking communities in Canada; the Flemish and the French populations in Belgium; and the French, Germans, and Italians in Switzerland.

Avnery and other members of the Israeli peace camp got it right with their proposal for an independent Palestinian state in the West Bank and Gaza, which by the end of the 1990s was adopted by the Israeli political establishment and the international community, including the United States. At the same time, against the backdrop of the disappearance of the multinational Soviet Union, the implosion of Yugoslavia, a divorce between Czechs and Slovaks, the disintegration of Indonesia, and the tensions created by the French-separatist movement in Quebec (not to mention the rise of secessionist and nationalist movements elsewhere—Basques in Spain, Kurds in Iraq, Chechens in Russia, Kosovars in Serbia), the concept of an Israel-Palestine federation sounded more and more anachronistic.

The era of globalization and the Oslo peace process may have strengthened the influence of “post-Zionist” trends in Israeli society, especially in academia and the media, with leading intellectuals calling for the “normalization” of Israel as a secular Western nation by separating synagogue and state, modifying the Law of Return, and integrating the Arabs citizens into Israeli society. But there was certainly no sign of the emergence of a “post-Arabist” movement on the Palestinian side. And in any case, the collapse of the Oslo peace process and the start of the second intifada only played into the hands of more radical forces in the Israeli and Palestinian camps, with violence in the territory between the Mediterranean Sea and the Jordan River resembling more the civil war in Yugoslavia than the era of peaceful co-existence under Marshal Tito.So some Palestinian intellectuals started to change the narrative, to apply another historical analogy: South Africa. In an article published in Egypt’s Al Ahram after the collapse of the Oslo peace process, Edward Said recalled his first visit to South Africa in May 1991, “[A] dark, wet, wintry period, when Apartheid still ruled,” although the African National Congress (ANC) and Nelson Mandela had been freed. “Ten years later I returned, this time to summer, in a democratic country in which Apartheid has been defeated, the ANC is in power, and a vigorous, contentious civil society is engaged in trying to complete the task of bringing equality and social justice to this still divided and economically troubled country,” Said wrote. A long-time opponent of Oslo, he urged the Palestinians to “counteract Zionist exclusivity” by proposing “a solution to the conflict that, in Mandela’s phrase, would assert our common humanity as Jews and Arabs.”

Israeli Jews and Palestinian Arabs are locked in Sartre’s vision of hell, that of “other people.” But there is escape. The solution, according to Said, was “Two people in one land. Or, equality for all. Or, one person one vote. Or, a common humanity asserted in a bi-national state.” Following the publication of the article, several Palestinian intellectuals called on their compatriots to adopt the one-state solution as a policy.

“One cannot unscramble an egg,” Diana Buttu, a legal adviser to the Palestinian Liberation Organization, said in an October 2002 interview, referring to the way the Israeli and the Palestinian populations are intermingled. The Palestinian leaders, she said, should give up their quest for an independent state and push instead for equal citizenship in Israel and “an antiapartheid campaign along the same lines as South Africa.”

Even more intriguing, was the way the bi-national idea was raising its head in some Israeli left-wing circles. In an article published in the liberal Israeli daily Ha’aretz titled, “Cry, the Beloved Two-State Solution,” prominent Israeli figures, who have struggled for the better part of their lives to establish a fully sovereign Palestinian state alongside the state of Israel, expressed doubt about the feasibility and the morality of this solution. “Neither Oslo nor the separation fence nor talk about a Palestinian state can change the status quo,” said Meron Benvenisti, a former deputy mayor of Jerusalem. “What we have to do is adapt our thinking and our concepts to this reality, to look for a new model that will fit this reality, and to ask right questions, even if they give the impression of a betrayal of Zionism; even if they give the feeling that one is abandoning the dream of establishing a Jewish nation-state in the Land of Israel.”

While the Israeli Benvenisti and the Palestinian Buttu each frame their support for a one-state solution as realism in its most basic form, the two seem to be taking part in an escape from reality. It’s not only a reality in which bi-national and multinational arrangements are collapsing everywhere, it’s also a reality in which, after 100 years of a clash between Zionism and Arab nationalism, there are no signs that the ideological forces of these two movements have been exhausted. If anything, those two secular nationalist movements seem to be taking more radical and atavistic forms that reflect their ethnic and religious sources. As Avnery suggests, the Zionist thrust—expansion, occupation, and settlement—“is in full, offensive swing, while on the Palestinian side, nationalism (including the Islamic version) is deepening and growing from martyr to martyr.” It takes real faith to believe that these two nationalistic peoples “will give up the essence of their hopes and turn from total enmity to total peace, giving up their national narratives and being ready to live together as supra-national citizens,” says Avnery, who is still committed to the two-state solution and regards the one-state idea as “utopia that is based on the vision that there is a perfect human being or that human beings can be perfected.”

There is certainly no chance that the present Israeli generation, or its successor, will accept this solution, which conflicts absolutely with the ethos of Israel as it exists today. Nor are there any signs that Arab-Palestinians are ready for such an experiment, especially if one takes into consideration that the only example of bi-nationalism in the Arab world, Lebanon, proved to be a total and bloody disaster.

In fact, a bi-national state would only produce an explosive situation in which Jews would dominate the economy and most other aspects of the new state, creating a reality of exploitation. At that point in time, a bi-national state would be a new form of occupation that would only set the conflict on a more violent track.

Indeed, it is this scenario that demonstrates why the attempt to apply the analogy of Apartheid South Africa is so misplaced. After all, unlike the Jews of Israel, the members of the Afrikaner tribe lacked the powerful base of support that American Jews will continue to provide Israel. And in contrast to the Afrikaners, Israeli Jews will continue to benefit from the sense of guilt among Western elites that the Holocaust has produced.

There is no doubt that the Israeli repression of Palestinians will erode support for Israel among liberal and left-leaning activists in Europe and the U.S. and will polarize Israeli society. But the political power of American Jews, the memories of the Holocaust, and the rising anti-Arab sentiments in the West would allow even a diminishing majority of Jews to dominate the one state, to continue expanding Jewish settlements, and eventually to overpower the Palestinians. To put it differently, the South African conflict ended with the surrender of power by the defeated Afrikaners. There are no signs that Israeli-Jews are about the follow their example.

It’s the Palestinians, unlike the blacks of South Africa who would become the main losers in this utopian scheme. “In the end,” Averny writes, “we shall reach the objective: to live together in peace, side by side. … But today the propaganda for this utopia diverts attention from the practical, immediate objective, at a time when the whole world has accepted the idea of ‘two states for two peoples.’”

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Leon Hadar is a Cato Institute research fellow in foreign-policy studies and the author of Quagmire: America in the Middle East.