Israel’s Options in a Chaotic Middle East. By Yossi Klein Halevi.

Israel’s Options in a Chaotic Middle East. By Yossi Klein Halevi. Wall Street Journal, February 26, 2016.

Halevi:

Faced with a new Palestinian uprising, Israelis have shelved the idea of a two-state solution—and have found surprising new allies in a disintegrating Middle East.

One recent morning, a Palestinian teenager stabbed a security guard at the light rail station minutes from my home in Jerusalem. About an hour later, I drove past the station and was astonished to see—nothing. No increased police presence, not even police barricades. The guard had managed to shoot his attacker, and ambulances had taken both away. Commuters were waiting for the next train. As if nothing unusual had happened.

The ability to instantly resume the pretense of normalcy is one of the ways that Israelis are coping with the latest wave of Palestinian terrorism. For the last six months, Palestinians—some as young as 13—have attacked Jews with knives and hatchets and even scissors, or else driven their cars into Israeli crowds, killing over two dozen people. (About 90 Palestinians have been killed carrying out the attacks.) The violence was provoked by the unsubstantiated Palestinian claim—strongly denied by the government—that Israel intended to permit Jewish prayer on the Temple Mount in Jerusalem, a place sacred to both Muslims and Jews.

The almost daily attacks tend to blur together, though several have become emblematic—like the stabbing murder of a mother of six in her home while her teenage daughter ran to protect her siblings. Still, by Israeli standards, the violence so far has been manageable. Israelis recall that in the early 2000s, when suicide bombers were targeting buses and cafes, almost as many victims would die in a single attack as have been murdered in the current wave of terror.

Israelis have been here before. In 1992, a monthslong stabbing spree by Palestinian terrorists in Israel’s streets helped to catalyze one of the great upsets in Israeli politics, the election of Labor Party leader Yitzhak Rabin as prime minister, ending over a decade of rule by the right-wing Likud Party. The stabbings were the culmination of a four-year Palestinian revolt against Israel’s occupation in the West Bank and Gaza. This first intifada (“uprising” in Arabic), as it came to be known, forced the Israeli public to come to terms with Palestinian nationalism. It also convinced many Israelis that the Likud’s policy of incremental annexation of the West Bank and Gaza was simply not worth the price.

Until the first intifada, Israelis had tended to regard control of the territories won by Israel in the 1967 Six Day War as benign, bringing prosperity to the occupied as well as to the occupiers. As the intifada took hold, Israeli anger turned not only against the Palestinians but against the ruling Likud. There were antigovernment riots, and Likud Prime Minister Yitzhak Shamir was widely ridiculed for his passivity and lack of vision.

Today, too, there is widespread disaffection with a Likud government’s response to stabbings. Some 70% of Israelis say that the government has been ineffectual, and nearly as many say they feel personally unsafe. Yet, unlike 1992, there are no antigovernment demonstrations, and few calls for a resumption of the moribund peace process.

Indeed, a private poll recently commissioned by one of the parties in the coalition government reveals that only 4% of Israelis consider the peace process their highest priority—the lowest percentage for any major issue. Improbably, the Likud remains the most popular party. And what little support the Likud is losing isn’t to the left but further to its right, to parties advocating a tougher response to terror and the annexation of large parts of the West Bank.

One reason for the radically different responses in 1992 and 2016 is that Israelis are living in a very different Middle East. The Middle East of the early 1990s seemed a place of promise: An American-led coalition, including Arab states, had defeated Saddam Hussein in Kuwait, while the Soviet Union, sponsor of Arab radical regimes and the Palestinian cause, had vanished. Palestinian leaders seemed ready to negotiate an agreement with Israel, and a majority of Israelis, especially after the first intifada, were ready to try.

In today’s disintegrating Middle East, by contrast, Israelis question the viability of a Palestinian state. Which Arab state, Israelis ask, will be a likely model for Palestine: Syria? Iraq? Libya?

Few Israelis believe that a Palestinian state would be a peaceful neighbor. In part that’s because the Palestinian national movement—in both its supposedly moderate nationalist wing and its radical Islamist branch—continues to deny the very legitimacy of Israel. The Palestinian media repeat an almost daily message: The Jews are not a real people, they have no roots in this land and their entire history is a lie, from biblical Israel to the Holocaust. The current wave of stabbings has been lauded not only by the Islamist Hamas but by the Palestinian Authority. “We bless every drop of blood that has been spilled for Jerusalem,” said Palestinian Authority head Mahmoud Abbas in September. “Every martyr will reach paradise.”

The result is profound disillusionment with the peace process across the Israeli political spectrum. Writing recently in the left-wing newspaper Haaretz, the political scientist Shlomo Avineri, long one of Israel’s leading voices against the occupation, lamented that the Palestinian national movement regards Israel “as an illegitimate entity, sooner or later doomed to disappear.” Labor Party leader Yitzhak Herzog, in a dramatic reversal of his rhetoric in last year’s election, recently conceded that there was no chance anytime soon for a deal with the Palestinians.

Most Israelis still support, at least in principle, a two-state solution. Many understand that the creation of a Palestinian state is an existential necessity for Israel, extricating it from a growing pariah status in the world at large, from the wrenching moral dilemmas of occupying another people, from a demographic threat that endangers Israel as both a Jewish and a democratic state. And they understand that the continuing expansion of settlements on the West Bank will only complicate Israel’s ability to withdraw eventually.

But a majority also regards a Palestinian state as an existential threat. They know that it would place Tel Aviv and Ben Gurion Airport, the country’s main link with the world, in easy range of rocket attacks. A Palestinian state also could result in a Hamas takeover of the West Bank and East Jerusalem.

Israelis sense that they have exhausted their political options toward the Palestinians. In the 1970s and ’80s, there was widespread enthusiasm for the expansion of Israeli settlements in the territories. Sooner or later, many Israelis believed, the Palestinians and the Arab world would accept this “Greater Israel”—a Jewish state including the West Bank and Gaza. But that dream was shattered in the first intifada of the late 1980s.

In its place, Rabin offered an alternative dream, promising (in a slogan of those days) “to take Gaza out of Tel Aviv and Tel Aviv out of Gaza.” In 1993 he launched the Oslo peace process, shaking hands with Palestinian leader Yasser Arafat on the White House lawn. But the dream of a negotiated solution also shattered, with the wave of suicide bombings that began in 2000 and became known as the second intifada. The violence followed Israeli offers to withdraw from most of the territories and to uproot dozens of settlements. Almost overnight, a once-vigorous Israeli left, which had assured the public that Israeli acceptance of a two-state solution would be reciprocated by Palestinian moderation, all but collapsed.

Finally, Israel tried a desperate third approach: unilateral withdrawal, dismantling Israel’s settlements and army bases from Gaza in 2005. Many Israelis saw that move as a test case for a future unilateral withdrawal in the West Bank. Ehud Olmert was elected prime minister in 2006 on the promise that he would do precisely that if there was no credible Palestinian partner.

But in the years following the withdrawal from Gaza, Hamas, which seized power there in 2007, fired thousands of rockets at Israeli communities along the southern border, all but destroying normal life there. Israel has since fought two wars in Gaza, trying to stop those attacks. The turmoil—and the vehement criticism around the world of Israel’s military actions, which Israelis overwhelmingly saw as self-defense—has convinced many unilateralists that repeating the process in the West Bank is simply too risky.

Today, Israelis have essentially embraced the status quo as the least terrifying option. The problem with the status quo, however, is that it isn’t static. The current terror campaign has, for the first time, included relatively large numbers of Palestinians from East Jerusalem who, unlike Palestinians in the West Bank, are able to freely travel in Israel. And radicalization is spreading even among Israel’s Arab citizens, a handful of whom have participated in terror attacks.

At the same time, settlement-building in the West Bank continues—though at a slower pace than in the past, according to the Peace Now Settlement Watch, an anti-occupation NGO. This did not deter the European Union from its recent decision to make a distinction in labeling between products made in settlements and those made in what it considers Israel proper—a move endorsed by the Obama administration.

Israel finds itself in perhaps the most frightening time since the weeks before the Six-Day War, when Arab armies massed on its borders and Arab leaders threatened to destroy the Jewish state. Terror enclaves now exist on most of Israel’s borders—Hezbollah in southern Lebanon, Islamic State on the Golan Heights and in Sinai, Hamas in Gaza. Tens of thousands of missiles are aimed at Israeli cities and are capable of reaching any point in Israel. Iran is emerging as the region’s dominant power, even as it remains on the nuclear threshold. And a growing international movement to boycott the Jewish state has deepened Israelis’ sense of siege.

And yet—precisely because of the Iranian threat against the Sunni world and of regional instability generally—the Arab world is opening up to Israel in unprecedented ways. Even with the Palestinian issue festering, Saudi Arabia has all but acknowledged a security dialogue with Israel, and Israeli officials are now being interviewed in Saudi media, which not long ago referred to Israel as the “Zionist entity,” refusing even to name the Jewish state.

Security cooperation between Israel and Egypt, focusing on containing Hamas, hasn’t been so warm since the Egyptian-Israeli peace process in the late 1970s. Ironically, as the movement to boycott Israel spreads in Europe and on American campuses, Israel is gaining growing acceptance in the Arab world. Prime Minister Benjamin Netanyahu recently called on Arab leaders to publicly acknowledge that they now regard Israel not as a threat but as a strategic partner.

Beyond the Arab world, an increasingly embattled Turkey is negotiating a rapprochement with the Jewish state. Turkey’s rival, Greece, once among the most vociferous pro-Palestinian voices in the European Union, has become one of Israel’s leading European allies, deepening military and economic ties and opposing the EU’s decision to mark West Bank settlement products—and this under a left-wing government.

In this bewildering new world, Israelis sense not just unprecedented threats but also opportunity. Mr. Netanyahu has suggested the possibility of a regional agreement between Israel and Arab countries that would bypass a dysfunctional Palestinian leadership and create some form of Palestinian state, with security arrangements negotiated between Israel and Arab leaders. But that’s a scenario for an uncertain future at best.

In the absence of any peace process, there are steps Israel needs to take. A settlement freeze would send a much-needed signal that Israel’s long-term interests in the territories are confined to security needs, not to implementing historic claims. The government is debating granting work permits within Israel for tens of thousands of Palestinians, to ease an increasingly hard-pressed West Bank economy. Mr. Avineri, writing in Haaretz, called for replacing the Israeli blockade on Gaza, intended to prevent Iranian weaponry from reaching Hamas, with border controls supervised by Egypt and the EU. With Hamas trying to dig tunnels under the Israeli border and threatening to attack Israeli communities, that isn’t likely to happen soon. Still, Mr. Avineri concluded, Israel needs to begin a long-term process of ending the occupation and saving itself as a Jewish and democratic state.

Meanwhile, Israelis are debating how to balance moral and democratic norms with fighting terrorism. So far the government has resisted demands from the far right to adopt draconian measures, like expelling the families of terrorists to Gaza. When the army chief of staff, Gadi Eizenkot, recently told high-school students that he opposes trigger-happy responses to terrorism, he was attacked by some on the right. But he was publicly backed by the hard-line Defense Minister Moshe Ya’alon, who said, “We need to know how to win and still remain human.”

Boycotted and courted, threatened by genocidally-minded enemies and by a corrosive occupation, and facing the possibility of war at any time on any border, Israelis deal with reality one day at a time. A recent song by the local rock band, Blue Pill, summed up the Israeli way of coping: “We’ve taken some blows / taken a deep breath and moved on.”

Mr. Halevi, a senior fellow at the Shalom Hartman Institute in Jerusalem, is the author of “Like Dreamers: The Story of the Israeli Paratroopers Who Reunited Jerusalem and Divided a Nation.” He is writing a book about the future of the Palestinian-Israeli conflict.