The withdrawal to 67 borders with the settlers becoming citizens of Palestine isn't gonna happen.
This would be the most workable solution:
Dr. Epsilon A. Delta's Middle East Peace Initiative
Borders
- The land ratio of historic Palestine remains the same - 78% for Israel, 22% for Palestine (a sad and unfair reality, but the reality nonetheless).
- Israel gets to annex the settlements as established in the 2001 Taba Summit, which Palestinians accepted. An equivalent amount of Israel's land is allocated to Palestine, probably around the northern WB, the Negev, and padding around Gaza for a potential bridge between it and the WB.
Refugees
- All Palestinian refugees can settle in the new Palestinian state, or work out arrangements with current host countries and third countries with massive financial support of the international community.
- As much as it would be fair for Israel to at least take a tiny, symbolic amount of refugees, it's obvious this is never going to happen, and I'm pretty sure the Palestinians know this. =\
Jerusalem
- A divided Jerusalem as capital of both states, both connected to their respective territories, with Israeli sovereignty over Jewish neighborhoods (and the Western Wall) and Palestinian sovereignty over Arab neighbors, under a framework of an open city (as per Taba). The Temple Mount would be ruled jointly by both sides equally.
Security
- International observers deployed along the new border for a temporary amount of time (~5 years).
- Palestine will control it's own borders, air space, Gaza's coast, and underground (including water) resources within it's territory.
- Israel keeps 3 early warning stations in Palestine (as per Taba), with about 12-18 months to withdraw from the rest of the West Bank.
- On the Subject of a Palestinian Military: I totally reject the idea that Israel or anyone else demand that Palestine be a demilitarized state, but nonetheless I strongly back the idea that Palestinians themselves should opt for a de-militarized state as the most effective way to ensure its security (I know that sounds ironic to most people, but it's not). Thankfully, they did accede to this idea, and have agreed to be classified as a "state with limited arms" along with Costa Rica, Panama, Iceland and others.
Mutual Recognition
- Both states should diplomatically recognize the other as the sovereign entity that rules over the territory within the agreed boundaries and absolutely nothing more, just like virtually every other state in the world. The idea that Israel has to recognize Palestine as a "Muslim Arab State" or that Palestine has to recognize Israel as a "Jewish State" is moronic. Whether Israel wants to consider itself a Jewish state or not is entirely for itself to decide, not for anybody else. When the Islamic Republic was declared in Iran, nobody was forced to recognize it as a "Muslim Persian State" - it simply was recognized as the entity exercising sovereignty over this particular piece of land, and it happened to be populated and ruled by Muslim Persian people. When the US declared independence, nobody was forced to recognize it as the "State of the Protestant White immigrant community in the Americas" or as the "State of the Anglo-Saxon, German, and other European descendants" or "a multicultural state with equal protection" - it was simply recognized as a country, whatever its internal configuration being entirely irrelevant for international recognition, squarely handled internally, and with absolutely no need for validation by anybody.
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So that's my plan, virtually the same as the Taba plan which both parties agreed was "the closest they've ever come to reach a final agreement" before it was abandon by Israel after Barak was unceremoniously ousted by Sharon in the Israeli elections and Clinton gave way to Bush. It's not perfect but it's workable and reasonable people on both sides could agree to this. This would not be my first or even second choice, though. In a better parallel universe, there is no question that Palestine should be exactly on the '67 borders and with the right of return, but this will never happen, so whatever.
In an even more ideal world, by far the best solution would be a single bi-national, secular state from river to sea, with full integration between Arabs and Jews under equal citizenship and equal protection and equal rights under the law. That'd be quite something, wouldn't it? Well, ain't gonna happen. Sometimes we gotta go for second or third best. The only certain thing is that the status quo is going to result in the decimation of the Palestinian people, and that cannot occur - for humanity's sake.