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Judt puts it this way: If there is no negotiated two-state solution, Israel may well have to choose between being a Jewish state or a democracy.
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The way things are going, I don't even see democracy as feasible. It requires the majority of people support democracy, and we have NO assurances that Palestinians want this. And they haven't exactly developed a democracy within their self-governed zone.
And I just want to say that having an average of 8 children per woman is a very short-sighted way of waging war. How many people can a desert support?