America is talking to Iran, Egypt is talking to Iran, inevitabely Jordan and other "moderate" Arab states will follow. These moves are long overdue, as is the independent Palestinian state. They may even be related. It is not possible for Israel to expand in the west bank, pacify the Palestinians, hold on the the Golan, and nullify the threat of Iran, without making some major changes. It may not even be possible if these changes are made.
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Preliminary report: Shooting attack in East Jerusalem's Damascus Gate (Haaretz)
from the article: Iran and Egypt to hold talks on restoring full diplomatic ties