After renouncing Oslo Israel should annex all territory that it offered the Palestinians at Camp David in 2000. The next time negotiations start and fail Israel can annex any additional land that are on the west side of the separation barrier. At that point Israel can do a Gaza like unilateral separation and declare its borders unilaterally. For those that think that the renunciation of Oslo means Israel would have some kind of responsibility for Palestinians, that is a naive opinion. Israel is simply not going to reoccupy Palestinian areas in the West Bank and most certainly not Gaza. Make of the resulting political situation what you will but be aware that it is highly unlikely that any force will ever get Israel to give citizenship to the Palestinians residing in the West Bank or Gaza. If the Palestinians don't want to exercise sovereignty over those lands where they have autonomy they don't really have to but they shouldn't expect a return of Israeli military rule. it just isn't going to happen. The Palestinians can cry a river and they will still not be Israeli citizens and they still will not be living in areas which Israel will claim as its own. I dub this the 1.5 / .5 state solution. It is unfortunately the most likely outcome if the PLO doesn't become reasonable and agrees to continue negotiations. Time isn't actually on the side of the Palestinians.
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