IT is now clear beyond reasonable dispute that a two-state solution of the Israeli-Palestinian conflict has passed into the realm of fiction. The project - if it ever was a real project - is stone dead. Some Western politicians, US President George W Bush among them, continue to pay lip service to the notion of an independent and viable Palestinian state living side-by-side with Israel in peace and security. But their actions belie their words. There is today no effective pressure on Israel – either from the United States, or Europe, or indeed from the Arab states themselves – to end its occupation of Palestinian territories, halt its settlement expansion, or agree to the creation of a Palestinian state. In the absence of such pressure and it would have to be severe Israel will not comply. Ever since its emergence on the ruins of Arab Palestine six decades ago, Israel has sought to crush any resurgence of Palestinian nationalism. That determination is as real today as it was then. Israel continues to be driven by the belief that any concession to the Palestinians and any recognition of its responsibility for their dispossession would undermine Israel's own legitimacy. Mention of a ‘Palestinian state' is, therefore, a cruel charade whether the words are uttered by George W Bush, or France's President Nicolas Sarkozy, or any other leader. When Israel's Prime Minister Ehud Olmert utters the words, they are a blatant exercise in cynicism and hypocrisy. Already, forty percent of the West Bank has been eaten up by Israeli settlements, closed military areas, nature reserves, Israeli-only roads and the separation barrier, built deep inside Palestinian territory. The rest is fragmented by hundreds of checkpoints. Arab East Jerusalem, the heart of Arab Palestine, is now almost entirely cut off from what remains of the West Bank by a ring of Jewish settlements. When UNRWA (the UN Relief and Works Agency) first began operations in May 1950, it had some 900,000 destitute Palestinian refugees on its books. Today, there are around 4.5 million in Gaza, the West Bank, Jordan, Lebanon and Syria. The 1.5 million inhabitants of Gaza have been reduced by Israel's siege to begging for their bread. They are kept alive only by UNWRA food packets. How long can this outrage continue? Israel's oppression of the Palestinians is a gross violation of international humanitarian law, but the world looks the other way. It is easier to condemn China over Tibet. The current situation in the Palestinian territories raises two stark questions. The first is a question of finance. Can UNWRA raise the $750m it needs this year for its General Fund and its Emergency Appeal? The answer is probably yes. To ease its conscience, and to compensate for its inability to influence Israeli behavior, the international community is likely to pay up - if reluctantly and late. The second question is more thought-provoking. How long will the Palestinians endure their present horrific conditions of life - and the end of their dream of statehood before exploding? The polls point to a sharp radicalization of Palestinian society, as the realization sinks in that Israel will yield nothing by negotiation. Certainly, Olmert's desultory talks with Palestinian Authority President Mahmud Abbas have got nowhere - and will get nowhere. Some observers predict the outbreak of a third Intifada, more violent than the two previous ones, which erupted respectively in 1987 and 2000. Other observers believe, however, that there is little fight left in the Palestinians. They have been greatly - and deliberately -- enfeebled by unemployment, malnutrition, a collapsed economy, severe restrictions on movement, not to mention Israel's frequent raids, targeted assassinations, and the incarceration in harsh conditions of over 10,000 Palestinians. This repression may not, of course, be able to prevent all attacks on Israeli targets, whether inside Israel or abroad. But occasional outbursts of Palestinian violence will immediately be condemned as ‘terrorism', and will win Israel international sympathy. Some would even go so far as to argue that the occupied Palestinian territories are the Israeli equivalent of the rebellious banlieues on the outskirts of French cities. Just as these suburbs erupt angrily from time to time, and are put down, so Israel will not find it beyond its means to keep the territories reasonably quiet, even if it means killing a few hundred people each year. Hamas and Hezbollah, on Israel's Gaza and Lebanon borders, provide more of a challenge because they seek to acquire a deterrent capability by establishing a ‘balance of terror' with Israel. But they are essentially little more than self-defense resistance movements, profoundly irritating to the powerful Jewish state, but posing no existential threat to it. In any event, Israel's leaders seem to think that a little Arab violence and the constant security vigilance required to keep it within bounds are a price well worth paying for the control and gradual takeover of the whole of historic Palestine. David Ben-Gurion, Israel's first Prime Minister, is said to have shed bitter tears that the opportunity to seize the entire West Bank and expel the rest of its Arab population was missed in 1948, when the Arab states were routed. Evidently, his successors have by no means given up the goal. Not for nothing have Israel's borders remained undefined to this day. As the ultra-nationalist religious right steadily gains ground, holding the Israeli government hostage with its claim that the whole of the ‘Land of Israel' is God-given and cannot be surrendered, it is not surprising that Ehud Olmert has been unable to dismantle a single illegal outpost, in spite of his promise to George W Bush. When was the dream of a Palestinian state finally put to rest? Future historians will probably blame the seven years of neglect under George W. Bush, as well as the great influence on his administration of the pro-Israeli neocons, totally opposed to Palestinian statehood. Any role the European Union could have played to advance Arab-Israeli peace was abdicated when Tony Blair, Britain's former prime minister, split Europe by allying himself with the American neocons in the war against Iraq. In any event, the Israeli-Arab conflict is a subject which divides rather than unites Europe. Still atoning for its Nazi past, Germany cannot bring itself to put any pressure on Israel on behalf of the Palestinians. On her recent visit to Jerusalem, Germany's Angela Merkel scarcely mentioned the suffering Palestinians at all, except to condemn Hamas's ‘terror attacks.' Israel's security, she said, was Germany's responsibility. ‘Threats to you are threats to us.' As usual, the Palestinians have been their own worst enemies. They have been plagued by factionalism for most of their modern history, ever since they quarreled over how best to resist the flood of Jewish immigration into Palestine between the world wars. Today, the violent clash between Fatah and Hamas has come at just the wrong moment for Palestinian fortunes. If, under Yemeni mediation, they manage to patch up their quarrel and reform a National Palestinian Government, Israel will immediately seize on the inclusion of Hamas to suspend the peace talks. For those who do not want peace, any pretext will do. Little wonder, therefore, that the choice for the Palestinians is between abject surrender and armed resistance. Either way, the future is bleak. Palestinian statehood has become a mirage, fading away into the distance whenever it is approached. __