OK, the posts have been interesting, but i think its played out, so I will keep my promise and post my long range theory about the inevitable future stable state.
First I have to say something that some folks might not like, but it has been said by many brilliant Jewish minds, it is nothing new with me.
Everything that has made Jewish culture (not religion) distinct in the West has come about as a result of unfortunate isolation of the Jews from the larger society as a result of anti-Semitism. Jewish culture, as beautiful as it is, has developed in shtetl and ghetto, and if Jews were living in the larger society they would have assimilated. And in the modern world, in the absence of institutionalized anti-Semitism, Jews would surely lose their identity in the west. Israel artificially creates a ghetto environment in the Middle East, which can preserve that identity for awhile longer. But I predict once peace comes, however it comes, even if Israel ends up stretching from the Mediterranean to the Tigris, the Israelis will trade and visit the surrounding countries, will marry with their inhabitants, will learn Arabic and in short will assimilate to the larger society just like the Palestinians did in centuries past, and the Jews will again become Arabs.
If you don't believe me, look at Central and South America. Two even more radically distinct cultures, native American and Spanish/Portuguese, have blended together entirely and created a synthesis. Those who feel they can trace their Spanish roots back to the Conquistadors may be a little haughty, but basically everyone is mestizo in some form or another. And it alll took less than 500 years.
And THAT's what is going to happen in the Middle East. It will be, as one thoughtful Jewish writer lamented, "The End of the Jewish People."