The current problem is this: more and more countries are recognizing the Palestinian state. Israel's government is in chaos, and relations with its key ally, the US are deteriorating. "Liberal" Jews everywhere are sympathizing with the suffering of the Palestinians, and withdrawing support from Israel, which is seen as a cruel aggressor. Even "neutral" Christians, eg the American Friends Service Committee, are calling for a boycott of some Israeli goods. With the international community turning against it, Israel's focus becomes survival. The precedent of pre-emptive war was set in 1967.
Any workable solution is going to have to address fundamental concerns for both parties--Israelis and Palestinians alike. But for this article, the focus will be on Israel's perceptions. This understanding should help all concerned, everyone on the planet, to turn the current crisis around with a peaceful outcome.
What are Israel's choices?
1) The two state solution- Pressure is being put on Israel, from inside and outside the country, to accept the Palestinian state and work with the new situation. This option is unacceptable to Israel, since Hamas, a key political party of Palestine, wants all Jews out of the area, and wants the state of Israel to disappear. The two state solution also leaves the area of Jerusalem which is holiest to Jews, the site of the second Temple, under the control of people who have been their enemy, and denied them the right to worship there in the past.
With European and other nations shifting to support Palestine, how can Israel trust any outside nation to guarantee its security, especially in light of past painful history? Without trustworthy external guarantees, Israel will have to monitor the West Bank itself, continuing to act as an occupation army. It's a formula for endless war.
2) The one state solution- The two states would merge, with full citizenship for both Israelis and Palestinians. This option is also unacceptable to Israel, as Jews would be outnumbered, and might find themselves outvoted and at the mercy of their enemies.
In order to understand why these two options are ruled out by most Israelis, it's helpful to recall some history.
Israel was founded in 1948, in the wake of the Nazi Holocaust, as a homeland for the Jews. Their ancestors had been expelled from the Holy Land by the Romans 1800 years earlier, and scattered in the Diaspora, but Jews never stopped praying to return to Jerusalem.
Over the ensuing centuries, the Diaspora Jews often experienced ongoing persecution from Muslims and Christians alike. They were not allowed to own land, sometimes they had to wear yellow robes or stars, and time after time they were expelled from many countries, and their assets confiscated. The Inquisition forced them to recant Judaism or else be burned at the stake.
Hitler's ethnic cleansing was the culmination of two millenia of implacable anti-semitism. Not only did Hitler attempt to systematically exterminate every Jew in each nation he conquered, but those who escaped found themselves rebuffed by the free nations of Europe. Some made it to the US, South Africa, South America; many went back to the Holy Land, for which they had been yearning during the long Diaspora.
The centuries of persecution built into the Jewish psyche a strong sense of tribal identity, and a suspiciousness of non-Jews. "NEVER AGAIN" was the cry of the Jews who finally reclaimed their own nation in 1948.