Benjamin Netanyahu certainly has remarkable tactical acumen, even though many question his long-term strategic wisdom. In addition he is lucky: he has now found unexpected allies who will make sure that he stays in power for at least another term: Islamic Jihadists in Gaza and Sinai. By the end of his next term, the two state solution will be discarded in the dustbin of history, as he has wished from the outset.

Sunday’s attack on Israel by a group of jihadists who first killed sixteen Egyptian policemen and then used an armored vehicle to attack Israel does not bode well for the future. Israel’s right has never trusted the Arab Spring, and so far the results are not encouraging in the short run: Islamists’ power seems to be increasing: jihadists seem to be all over Sinai, and they are involved in fighting Assad in Syria.

Never mind that the labels “jihadists” and “Al Qaeda” are very vague; never mind that it is, at this point, rather unclear to what extent Hamas supports or opposes the attacks on Israel. These events, along with jihadist infiltration of Syria strengthen Israel’s right-wingers in their claim that a peace process with the Palestinians is currently impossible.

Their arguments seem convincing: if jihadists are strong in Gaza now, who can guarantee that they will not play an important role in the West Bank if Israel relinquishes its control over Area C and the Jordan Valley? The truth is that nobody can. The situation is beyond fluid: it is chaotic, and any prediction about how things will play out in the long run is bound to be hazardous at least.

Under such conditions long-term strategic thinking is crucial. One strategy would be to assume that Palestinians have a higher potential to move directly towards liberal democracy than any other Arab country, at least in the long run. Even if you believe that it is currently too dangerous to cede security control over the West Bank to Palestinians completely, it would be a good idea to at least follow Netanyahu’s declared tactic of ‘economic peace’: to allow Palestinians to strengthen their economy, and thus to empower the Palestinian middle class that is largely opposed to Islamist extremism.

But, as Bernard Avishai has reported recently, Israel’s actual policies are quite the opposite of Netanyahu’s stated tactic of economic peace: Israel’s occupation forces cause Palestinian businesspeople tremendous problems in developing their ventures. Developers of mobile networks are denied sufficient bandwidth; real estate developers are denied access to their building sites. And all businesspeople (and Palestinians in general) are too limited in their mobility by roadblocks and lack of access to air-travel as to make entrepreneurship almost impossible, something I can confirm from personal encounters. Hence we need to conclude that Netanyahu’s speaking of economic peace is nothing but a ruse.

What, then, is Netanyahu’s real strategy? I think that Ron Pundak’s recent analysis is right on target, because it corresponds both to Netanyahu’s actions and to his published statements since the 1990s. Netanyahu believes that Israel must prevent the creation of a territorially contiguous Palestinian state. He therefore continues to approve, one by one, settlements that, ever more effectively, make such territorial contiguity possible.

His ultimate aim is to offer Palestinians something that can hardly be called a state, even if it will have a government and an anthem. Pundak estimates that Netanyahu intends to ultimately annex about forty percent of the West Bank, and that the Palestinian autonomy will be limited to population centers. This makes him look moderate compared to most of his own party and his coalition partners to the extreme right who are calling for wholesale annexation of the West Bank. But, as Pundak argues, both Palestinians and the Western World will nevertheless see it as an apartheid regime.

Why does Netanyahu think that he can get away with this? He has always believed that he understands the U.S. profoundly, and that its liberal elites do not represent America, which will stand by Israel no matter what. And he counts on Europe’s problematic history with Jews, particularly the Holocaust, to prevent major European countries from ever endorsing policies that might force Israel to withdraw from all of the West Bank. Hence he thinks that he just needs to hang on long enough, and that the world will get used to his vision of a Mini-Greater Land of Israel.

Matthew Gould, Britain’s first Jewish ambassador to Israel, thinks otherwise: he has predicted that public support for Israel is bound to erode throughout the Free World, and that Israel might find itself completely isolated in another decade. My impressions from travels in Europe and conversations with Western politicians and diplomats tend to confirm Gould’s prediction.

Netanyahu bets against this forecast. He counts on developments that might pull the West towards his hardline policies: if there will be more trouble from radical Islamists, Europe might well move further to the right. As a result Israel may gain the sympathies of political figures that share the worldview of France’s Marie Le Pen and of Geert Wilders, the Dutch anti-Muslim right-winger who is a great aficionado of Netanyahu. In this scenario Israel will come to be seen as the bulwark against radical Islam, and keep the West’s support, even though it will annex most of the West Bank.

Meanwhile Netanyahu can count on the Middle East’s Sunni jihadists and Iran’s Shiite clerical regime to keep him in power. Every jihadist attack, every anti-Israel statement by an Iranian official, and every regime that falls into Islamist hands make Israel’s electorate even more reticent to replace Netanyahu at the helm, particularly given the dearth of viable competitors for his job. Under these conditions he has no incentive whatsoever to change course. At least in the foreseeable future, his tactics seem to work.

His long-term strategy is bound to succeed as well: Netanyahu has bragged in the past that he effectively stopped the Oslo-Accords. He will soon take well-deserved credit for destroying the two state solution altogether.