From National Review Online, May 11, 2010, by Daniel Pipes:
When a major Arab state would finally sign a peace treaty with Israel, it was long assumed, the Arab-Israeli conflict would end. The Egypt-Israel peace treaty of 1979, however, buried that expectation; it had the perverse effect of making other states and also the Egyptian populace more anti-Zionist.
The 1980s gave birth to a hope that, instead, Palestinian recognition of Israel would close the conflict. The total failure of the 1993 Declaration of Principles (also known as the Oslo Accords) then buried that expectation...
...Starting about 2007, a new focus has emerged, of winning acceptance of Israel as a sovereign Jewish state. Israel's former prime minister Ehud Olmert set the terms: "I do not intend to compromise in any way over the issue of the Jewish state. This will be a condition for our recognition of a Palestinian state."
...Arab-Israeli diplomacy has dealt with a myriad of subsidiary issues while tiptoeing around the conflict's central issue: "Should there be a Jewish state?" Disagreement over this answer – rather than over Israel's boundaries, its exercise of self defense, its control of the Temple Mount, its water consumption, its housing construction in West Bank towns, diplomatic relations with Egypt, or the existence of a Palestinian state – is the key issue.
Palestinian leaders responded, with howls of outrage, declaring that they "absolutely refused" to accept Israel as a Jewish state. They even pretended to be shocked at the notion of a state defined by religion, although their own "Constitution of the State of Palestine," third draft, states that "Arabic and Islam are the official Palestinian language and religion." Olmert's efforts went nowhere.
On taking over the prime ministry in early 2009, Binyamin Netanyahu reiterated Olmert's point in his diplomacy. Regrettably, the Obama administration endorsed the Palestinian position, again sidelining the Israeli demand. (Instead, it focuses on housing for Jews in Jerusalem. Talk about the heart of the issue.)
If Palestinian politicians reject Israel's Jewish nature, what about the Palestinian and the broader Arab and Muslim publics? Polls and other evidence suggest a long-term average of 20 percent acceptance of Israel, whether in the Mandatory period or now, whether Muslims in Canada or Palestinians in Lebanon.
...Although 20 percent constitutes a small minority, its consistency over time and place offers encouragement. That one-fifth of Muslims, Arabs, and even Palestinians accept Israel as a Jewish state suggests that, despite a near-century of indoctrination and intimidation, a base for resolving the Arab-Israeli conflict does exist.
Would-be peacemakers must direct their attention to increasing the size of this moderate cohort. Getting from 20 percent to, say, 60 percent would fundamentally shift the politics of the Middle East, displacing Israel from its exaggerated role and releasing the peoples of this blighted region to address their real challenges. Not Zionism but such, oh, minor problems as autocracy, brutality, cruelty, conspiracism, religious intolerance, apocalypticism, political extremism, misogyny, slavery, economic backwardness, brain drain, capital flight, corruption, and drought.
May 11, 2010 update: United Nations General Assembly Resolution 181 of Nov. 29, 1947, which called for the partition of the British-ruled Palestine Mandate into two states, uses the term "Jewish State," notes a reader, Geoff D. Bloch of Melbourne, Australia. Indeed, the resolution refers thirty times to an as-yet-unnamed "Jewish State." For example:
Independent Arab and Jewish States and the Special International Regime for the City of Jerusalem, set forth in Part III of this Plan, shall come into existence in Palestine two months after the evacuation of the armed forces of the mandatory Power has been completed but in any case not later than 1 October 1948.
Comments: (1) Being a "Jewish state" is not just an Israeli whim but the legal reason for this polity coming into existence. (2) The unnamed "Arab State" is just that - Arab, not Muslim. Hamas has different ideas.