Until a decade ago, every Israeli government, left and right, was committed to a security doctrine that precluded the establishment of potential bases of terrorism on Israel’s borders.

That doctrine has since unraveled. In May 2000, Israel's unilateral withdrawal from southern Lebanon led to the formation of a Hezbollah-dominated region on Israel’s northern border. Then, in August 2005, Israel’s unilateral withdrawal from Gaza led to the rise of Hamas on Israel’s southern border.

As a result, two enclaves controlled by Islamist movements now possess the ability to launch missile attacks against any population center in Israel. And Iran, through its proxies, is now effectively pressing against Israel's borders.

For Israel's policymakers, the nightmare scenario of the recent Egyptian upheaval is that Islamists will eventually assume control -- either peacefully, as the Justice and Development Party (AKP) did in Turkey, or violently, as the clerics did in Iran. Such a turn of events would bring to power an anti-Semitic movement that is committed to ending Egypt’s peace treaty with the Jewish state. “This could be the beginning of a 1948 moment,” a senior Israeli official told me, meaning that Israel could eventually face a multifront war against overwhelming odds.

Until now, the Muslim Brotherhood has faced a sworn enemy in the Mubarak regime. But if it were to take control in Egypt, then Hamas, the Brotherhood's descendant within the Palestinian national movement, would suddenly have an ally in Cairo. Hamas has significance for the Arab world: it is the first Sunni Islamist movement to align with Shiite Iran. So far, Hamas has been an aberration in this regard. But it could be a harbinger of an Egyptian-Iranian alliance that would create an almost complete encirclement of Israel by Iranian allies or proxies.

Even a relatively more benign outcome -- such as the Turkish model of incremental Islamist control, with the government maintaining ties to the West -- would mean the end of Israel’s sense of security along its long southern border. And this uncertainty will certainly adversely affect the Israeli public’s willingness to relinquish the West Bank anytime soon.

The Israeli centrist majority views a Palestinian state with deep ambivalence. On the one hand, they see a Palestinian state as an existential necessity for Israel. An independent Palestine would save the Jewish state from the demographic threat of a Palestinian majority between the Jordan River and the Mediterranean Sea, forcing Israel to make an impossible choice between its two essential identities as a Jewish and a democratic state. It would ease the growing isolation of Israel internationally. And it would extricate Israel from the moral agony of prolonged occupation.

On the other hand, centrists see a Palestinian state as an existential threat to Israel. An unstable Palestinian state on the West Bank could fall to Hamas, just as Palestinian Authority–led Gaza did in 2007. Israel would then find itself “sharing” Jerusalem with an Islamist government, turning the city into a war zone. Israelis fear that, even if Palestinian Authority President Mahmoud Abbas' Fatah managed to remain in power, renegade bands of terrorists (whom Fatah would either be unable or unwilling to control) would fire rockets at greater Tel Aviv and Jerusalem from the West Bank hills. Even "primitive" rockets such as those fired by Hamas against southern Israel would, if aimed at the Israeli heartland, put an end to normal life in the country. And if the Israeli army then reinvaded the West Bank to end the attacks, Israel would find itself once again denounced by the international community as a war criminal -- and also as an aggressor against a UN member state.

In that balance between existential necessity and existential threat, Egypt’s unrest only heightens Israeli anxieties of a Palestinian state. The only border Israel can fully control today is the one with the West Bank. Given events in Egypt and Tunisia, Israelis will be especially wary of entrusting that border to the corrupt one-party rule of Abbas.

At the very least, Egypt’s instability will reinforce the urgency of Israeli demands for security guarantees as part of a deal on a Palestinian state. Those demands will include a demilitarized Palestine, Israel’s right to respond to terror attacks, and an Israeli military presence along the Jordan River. “Imagine if the Sinai were not demilitarized,” an Israeli official told me. “What would our strategic situation look like today?”

Nor will U.S. guarantees necessarily reassure Israelis. Contrary to much of the public reaction in other Western nations, President Barack Obama's instant abandonment of Egyptian President Hosni Mubarak, the United States’ closest ally in the Arab world, is being cited by Israeli commentators on the left and right as a warning against trusting the administration.

The Obama administration, along with much of the international community, has been motivated in its approach to the Middle East by two assumptions -- both of which have been proven wrong in recent days. The first is that the key to solving the Middle East's problems begins with solving the Palestinian problem. The second is that the key to solving the Palestinian problem is resolving the issues of the West Bank settlements and the status of Jerusalem.

The first premise was undone in the streets of Cairo. Demonstrators are not protesting the fate of Palestine but that of Egypt. Even if the Palestinian issue were to be somehow settled, the Arab world would still be caught in the shameful paradox of being one of the world's wealthiest regions and one of its least developed.

Moreover, as the WikiLeaks documents revealed, Arab leaders are far more concerned about the prospect of a nuclear Iran than about ending the Israeli occupation of the West Bank.

The second premise -- that settlements and Jerusalem are the main obstacles to an agremeent -- has been disproven by leaked documents from the Palestinian Authority published by Al Jazeera and The Guardian. Those documents reveal that on the future of Jerusalem's Jewish and Arab neighborhoods, Israeli and Palestinian negotiators were largely in agreement. Despite media claims, such consensus is hardly new. As for settlements, there, too, the outline of an agreement has long been clear and was confirmed by the “Palestine Papers.”

Instead, the main obstacle remains what it has been all along: the Palestinian insistence on the "right of return" -- that is, the mass immigration to the Jewish state of the descendants of Palestinian refugees. The leaked documents do reveal greater Palestinian understanding for Israel's opposition to a mass "return." But the gap between what the Palestinians had in mind on the refugee issue and what former Israeli Prime Minister Ehud Olmert was willing to offer was not just vast but unbridgeable. As Olmert reveals in his forthcoming memoirs, recently excerpted in the Israeli newspaper Yediot Ahronot, he offered to accept 5,000 descendants of refugees. Yet, as documents show, for all the Palestinians' understanding of Israel's predicament, Abbas and his negotiatiors seem to have expected Israel to absorb hundreds of thousands of refugees.

Olmert also rejected Palestinian demands that Israel accept blame for creating the refugee problem -- given that the 1948 war that led to the refugee tragedy was launched by Arab countries. And so Olmert's offer to withdraw from more than 99 percent of the territory was, in the end, a nonstarter, with the disagreements between the two sides about the refugee issue remaining irreconcilable.

All of which only underscores for Israelis the grim logic of developments in the region. With peace with Egypt suddenly in doubt -- a peace for which Israel withdrew from territory more than three times its size -- Israelis are wondering about the wisdom of risking further withdrawals for agreements that could be abrogated with a change of regime. Such a dilemma is all the more pressing when the territory in question borders Israel's population centers.

For Israelis, this is a time of watching and waiting. Despite conventional wisdom in the West that a Palestinian state needs to be created to contain the Islamist threat, Israelis believe the reverse to be true. Only in a Middle East able to contain the Iranian contagion can Israel afford to take the risk of entrusting its eastern border to a sovereign Palestine.

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  • YOSSI KLEIN HALEVI is a Fellow at the Shalom Hartman Institute, in Jerusalem, and a contributor to The New Republic.
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