The easiest solution would just be to allow the Palestinian people to integrate into Israeli society. They'd have access to (probably) the best healthcare, education, and social services in the Middle East. Many of the Palestinians (100,000's) actually travel from their enclaves into Israel 'proper' to work during the day, then leave at night. Why not just have the two populations merge, and create a heterogenous society. I think that the Palestinians would still object (rightly) to any presence by Israelis, but I believe if they had a real political voice (the right to vote in Israeli elections) that might go a long way to changing their form of representation in the conflict from suicide bombers to opposition parties. It worked somewhat decently in the Irish conflict, and both those sides were intractable as well.
There's a simple reason why this proposal won't work. Jews dont' want to be a minority, and if they allow all the Palestinians who are in 'Israel' to become citizens, demographic studies show that within a couple decades the Jews would probably be a minority. This is unacceptable, because the Jews want a racially homogenous state (more or less, they DO import some foreign labour for menial tasks).
Does this make the Israeli-Jews racist? I guess it really depends on how you define racism. While I agree that a heterogenously populated country isn't a bad thing, I might be slightly uncomfortable to be a recognizable minority in a country, for reasons that have probably been socially conditioned within me.
Fun debate, agree with the above statement, if we who have no stake in the argument get so heated, imagine how difficult it is for those actually involved. Scary.
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