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The stock market doesn't lie. The high tide in the stock market identifies a dramatic change for the better in Israel's situation - not only because of the positive changes Finance Minister Benjamin Netanyahu had made in the economy. The Tel Aviv financial market suddenly understood what columnists don't get - that in a certain way, our situation has never been better.

Iraq and Libya and maybe Pakistan leaving the circle of conflict may fundamentally change Israel's existential position. Therefore, as opposed to the sour bon ton fashionable among the country's intelligentsia, these days are actually good times - maybe even the best of times.

However, neither are the pessimists lying. In another sense, these are also bad days, maybe even the worst of times. It's not only because of the continuing occupation; not only because of the moral rot greedily eating away at the state. It's because the demographic clock is ticking; because the Jewish community in the Land of Israel is losing its position as the majority community; because many Israelis feel their nation state has no future.

So, at the start of 2004 Israel faces a challenge unlike any it has seen since the 1940s. On the one hand it is at the edge of a precipice. If it doesn't move quickly and with determination, to shape reality anew, it will find itself plunging into the abyss. Yet on the other side, historic circumstances have rolled into its hands that give it an unprecedented opportunity to move away from the edge with relative security.

It has been given the rare political opportunity to do something no less formative in its importance than the 1948 establishment itself. The option of a permanent status agreement tomorrow simply does not exist. The current Palestinian leadership is unable to finish the conflict once and for all. The road map framework is also useless. It leads the Israelis and Palestinians nowhere. So, if Israel wants to immediately shatter the status quo that is endangering it, the only thing it can really do is something Gazan. A total, absolute withdrawal from Gaza.

The Gaza First idea is not new. It came into the world in the 1980s and 1990s; the Oslo agreement made much rhetorical use of it. But in effect, it never was translated into a serious plan of action. No government put uprooting all the Israeli settlements from Gaza and turning all of Gaza into sovereign Palestinian territory the centerpiece of its platform.

A Gaza move won't end the occupation. But with one historical stroke it would reduce the size of the Palestinian people under occupation by 40 percent. The Gaza move won't end the conflict. It will give 1.2 million Palestinians national and political liberty they have never known.

Leaving Gaza has some risks. A Palestinian land that is entirely free could turn into chaos, a platform for violent action against Israel. Foreign troops could infiltrate from outside, extremist forces could take over from inside. However, since the Gaza Strip is a defined and fenced area that does not have topographic control over the center of the country, these are not fateful risks.

Thanks to Israel's strategic advantage in the entire region, those risks can be managed. They are also tiny compared to the chance to crate a significant change in the demographic and moral balance between Israel and Palestine. The risks are meaningless compared to the chance that after the withdrawal from Gaza Palestinian society will be fored to finally prove it is indeed a mature society, capable of behaving as a rational political subject responsible for its deeds.

To conduct the Gaza operation properly, Israel must add some complementary moves. It must demand explicit international recognition of its right to defend itself inside the Green Line; it must demand a clear American statement that there is no right of return of refugees to inside Israel proper; it must demand that the international community work with the Palestinian sovereign after the withdrawal to rehabilitate the refugees living in Gaza, where they live.

And Israel must demand the border between Gaza and Egypt be open. This year is critical. Never has Israel faced such a dramatic confluence of opportunities and risks. If Israel misses this year of grace, when it is over, the international community will deal with the rogue occupying state with brutal toughness. If the Israeli right still has any real patriots, they are supposed to understand this. They must understand that if Israel doesn't immediately start to leave Gaza, Gaza might never leave Israel. It will corrupt Israel and undermine it, until it falls from within.