Your argument is sound. What some see as a flaw in a two-state solution is that Israel, the product of both the Holocaust and the world's powers dividing up areas of influence in their global strategic interests, has developed symbiotically with its allies (Britain, U.S.). It has a class structure, and it has a military-industrial complex. It has military dominance due to it's alliance with the U.S. (25% of Foreign Aid in U.S. budget goes to Israel, etc.). Two states leaves much of the same problems. What about a democratic secular state shared by all?
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Hamas operative, 24, accused of attempting to attack soldiers on Gaza border (Haaretz)
from the article: Taking Israel’s fate beyond the tears of the Holocaust