By Uriel Heilman 

Jerusalem—When Israel celebrated its unexpected and overwhelming victory over its Arab neighbors in the 1967 Six-Day War, Israelis across the political spectrum and Jews around the world greeted the Jewish state's capture of new territories with great enthusiasm and excitement. 

Finally, the West Bank and all of Jerusalem had come under Jewish control—as well as the Sinai Peninsula, Gaza Strip, and Golan Heights. At the time, few Israelis questioned the wisdom of holding onto these alluring lands, steeped in Jewish heritage and history.  

However, both the right and left wings of the Israeli political spectrum failed to foresee the demographic, ethical, and security challenges millions of Palestinians would pose, and Israelis failed to prepare for those hardships. 

Forty years later, as Israel prepares to celebrate its 60th anniversary, the West Bank and Gaza remain Israel's most vexing obsessions and enduring conundrums. 

The Palestinian-Israeli conflict dominates the country's political discourse. It's the sticking point in Israel's ties with governments around the world.  

It's the single greatest drain on the country's military and security resources, and, most years, it is the cause of the majority of Israel's military casualties. It affects the country's morale, economic health, and social cohesion. 

Many Israelis believe the Israeli-Palestinian conflict is unavoidable, and that it stems from Palestinians' lack of acceptance of Israel's existence. It's not just that the Palestinians want Jews out of the West Bank, they say, it's that they want the Jewish state out of the Middle East. The ideological underpinnings of Hamas reject the existence of the Jewish state. As evidence, Israelis cite the persistence of daily rocket fire at Israel from the Gaza Strip, from which Israel withdrew in August 2005. 

Even if most Palestinians were willing to live at peace with Israel, they note, there are enough militant spoilers out there to ensure that doesn't happen. 

Others say the conflict stems from Israel's restrictions on millions of Palestinians in the West Bank and Gaza, and that the key to resolving the conflict is handing those territories over to full Palestinian control.  

But even for this camp, the question is how, exactly, to accomplish that, given the current circumstances: a Gaza dominated by militant Palestinians under the aegis of Hamas; a politically weak, corrupt, and largely illegitimate Palestinian Authority government; nearly a quarter-million Jewish settlers living in the West Bank; and persistent concerns about the willingness and ability of the Palestinians' leadership to live peacefully alongside Israel.  

BBI Poll Shows Security Worries 

Reflecting Israelis' lack of faith in the possibility of peace with the Palestinians right now, 66 percent of respondents to a recent B'nai B'rith International survey said they oppose a peace deal that would have Israel return to its pre-1967 borders. The survey, of 500 Israelis in January, showed that only 26 percent support a return to 1967 borders. 

"The findings clearly demonstrate that Israelis are focused on the peace process," says Alan Schneider, director of the B'nai B'rith World Center in Israel. "While these views could change once an agreement is presented to the public, these results show Israelis right now are not comfortable in light of current security issues." 

At Israel's 60th birthday, there is still no solution in sight to the Israeli-Palestinian conflict.  

The vision of Greater Israel basically has been ceded, with even most of the movement's leadership admitting that holding onto the entire West Bank is unrealistic, for reasons of both security and demography. Aside from the security threat, Israel will not last long as a Jewish state if its population includes the approximately 2.5 million Palestinians in the West Bank, not to mention the 1.3 million in Gaza.  

For all but the far right, therefore, the argument today is over how much of the West Bank to hand over to the Palestinians, not whether to yield any of it.  

Likewise, the vision of peaceful coexistence with the Palestinians has been discredited by the collapse of the era of the Oslo Accords, resulting from the Palestinians' rejection of the 2000 Camp David peace deal, the launching of the second intifada, and the marginalization of moderate Palestinians.  

The victory by Hamas—a terrorist group sworn to Israel's destruction—over the relatively moderate Fatah faction in the most recent Palestinian legislative elections, in January 2006, underscored that transformation. Today, even the most dovish Israelis say the likelihood of a peace deal succeeding is seriously challenged by the political weakness of the Mahmoud Abbas-led Palestinian Authority. 

Another approach—unilateralism—has failed as well, Israeli analysts say. Israel's unilateral withdrawal from southern Lebanon in 2000 enabled Hezbollah to strengthen its grip over South Lebanon and build up the threat to Israel. That danger was realized in the summer of 2006, when Hezbollah fired more than 4,000 Katyusha rockets into northern Israel during its 34-day war with the Jewish state. 

Similarly, Israel's withdrawal from the Gaza Strip in August 2005 was followed by Hamas winning Palestinian legislative elections, Hamas routing Fatah from Gaza in June 2006, and a sharp rise in rocket attacks from Gaza on Israeli communities across the border. Most recently, Hamas' breach of the Gaza-Egypt border in January, foiling Israel's strategy of isolating the extremist Islamic regime, has made things only more difficult for Israel. 

At 60, Israel is at an impasse. 

"This is the first time in the history of the state where no one has any idea, truly, of how to move forward," says Yossi Klein Halevi, a senior fellow at the Shalem Center, a conservative think tank in Jerusalem. 

Resilient Despite Corrosive Conflict 

Every day of stalemate comes at a price: New rocket salvoes claim more Israeli lives and livelihoods; Palestinian militants smuggle additional arms into Gaza from Egypt; and Jewish and Palestinian settlements in the West Bank become more and more intertwined. 

Nevertheless, Israel's resiliency, despite the persistence of this corrosive conflict, is a testament to the strength of the country and its people. The army remains strong, terrorism-related deaths are down, and Israel is growing in nearly every respect. 

"There's been a tremendous resilience in Israel—being able to develop in other areas, while successive governments muddle through in the area of Israeli-Palestinian peace," Schneider says. "In the economic realm, technology, science, and even diplomacy, Israel's made tremendous strides in the last 15 years, despite this continuing strife with the Palestinians." 

Israelis still wait for the day when their neighbors are ready to live with them in peace, and remain hopeful that, one day, peace will come. But in the meantime, they're getting on with their lives. 

"Israelis believe in the country. Israelis believe in Israeli society," Halevi says. "People continue to be ready to give their lives for this country, which means that most of us believe it's still a privilege to be here."