The greatest danger to Israel comes not from without -- in the form of Palestinian intransigence -- but from within. The ongoing occupation of the territories is destroying Israel's values and viability. It breeds an aggressive, intolerant ethnic nationalism and causes political gridlock, empowering an ultrareligious underclass that refuses to contribute and lives off the state.
Peace negotiations between Israel and the Palestinians have failed miserably. The reason, write two senior Israeli government officials, is not disagreement over specific issues, such as settlements or Jerusalem, but something much more fundamental: the Palestinians' refusal to recognize Israel as a Jewish state.