Sitting in a cafe on Shenkin street in Tel Aviv, reading the letters page of the Jerusalem Post, I much enjoyed an exchange between two American Zionist machers. M. J. Rosenberg, of the doveish Israel Policy Forum, opined that a true Zionist lives in Tel Aviv. The seafront city, he wrote, is the ‘embodiment of the Zionist accomplishment’ — as opposed to the settlers beyond the Green Line, the 1967 border, who spend their days harassing Palestinians, cutting down olive trees and so on.  That triggered a quick counterblast from Steven Goldberg, of the Zionist Organization of America. Mr Goldberg declared that all of Israel, ‘including Judea and Samaria’ represents the Zionist dream, and to argue otherwise is ‘toxic’ to Israel’s security.

Put aside the fact that Judea and Samaria are not part of Israel. Instead enjoy, once again, the old joke about the definition of Zionism — one Jew collecting money from another to give to a third to send a fourth to Israel. It is as apt as ever, for Mr Rosenberg wrote from Washington DC and Mr Goldberg from Los Angeles. At my Jewish school in North West London we learned that a true Zionist makes Aliyah and actually goes to live in Israel. In the United States, at least, it seems real Zionists are to be found not in the Judean Hills, but Beverly Hills.

Either way, Israel turns sixty next year. Were the Jewish state a person, she would be of pensionable age. But she is a country, with much longer lifespan. Looking ahead, at the future of Zionism, is a more productive line of discussion than the old left/right dispute. Zionism, or rather political Zionism, the establishment of a Jewish homeland, has been both a success and a failure. A success because Israel exists, which is still a kind of miracle. Back in 1896, when Theodor Herzl published Der Judenstaat, the idea that Jews should leave their comfortable homes in Berlin, or his native Budapest, to settle in a dusty, remote corner of the Ottoman empire was met with horror. Herzl was seen as a meshuggah. A year later, at the first Zionist Congress in Basel, he admitted as much to himself. He wrote in his diary: ‘The fact is — which I conceal from everyone — that I have only an army of schnorrers. I am in command only of youths, beggars and sensation mongers.’ But Herzl also knew that his time had come. ‘Were I to sum up the Basel Congress in a word — which I shall guard against pronouncing publicly — it would be this. At Basel I founded the Jewish state. If I said this out loud today I would be answered by universal laughter. Perhaps in five years, and certainly in fifty, everyone will know it.’

Herzl was out by just one year. Just three years after the liberation of Auschwitz, a nation of traumatised Holocaust survivors and squabbling Yishuvniks jammed into a sliver of land the size of Wales, beat off the combined armies of the neighbouring Arab states and established a state. Almost twenty years later, in 1967, again faced with the prospect of being wiped off the map, Israel won a stunning victory against Egypt, Jordan and Syria that reshaped the Middle East forever. Behind the Green Line the Jewish state has much to be proud of. It is the only real democracy in the Middle East, with a pugnacious free press and an independent judiciary. Hebrew, once the rarified language of prayer, has become a daily medium for commerce and communication, spawning a dazzling literature and culture. Israeli scientists lead the world in everything from game theory to nano-technology. (It is, of course, a very different story beyond the 1967 border, where the state and settlers continue to appropriate Palestinian lands at will and a web of checkpoints and restrictions further atomizes what is left of Palestinian society.)

So Israel exists, even thrives, but Zionism has also failed. By now the Zionist Organization of America should have worked itself out of existence. But only a tiny minority of western Jews have made Aliyah. The Jews of New York, London and Paris are still there. During the 1950s hundreds of thousands of Jews from the Middle East and North Africa were expelled or encouraged to leave. The elites of Baghdad, Cairo and Casablanca often moved to France, Britain or North America. The poor and uneducated were brought to Israel, causing a social crisis that is still ongoing.  A growing number of Israeli citizens are not even Jewish. Or, rather, not Jewish enough. During the 1990s vast numbers of Russian ‘Jews’ and their families were encouraged to immigrate. They could serve in the armed forces but could not marry or be buried on consecrated ground, even if they fell in battle defending the Jewish state. 

There is yet another ingredient in this volatile mix: the twenty per cent or so of Israel’s population who are Arab Muslims, Christians and Druze. To be an Israeli Arab, or ‘Palestinian citizen of Israel’, as many now define themselves, is to live a contradiction, as non-Jews in a Jewish state. Discrimination is systematic and institutionalized. Israeli Arabs suffer higher levels of poverty, unemployment and ill health. More than one hundred ‘unrecognised’ Arab villages lack proper water, electricity or sewerage systems. It is almost impossible for an Israeli Arab to buy state-owned land. The civil rights group Sikkuy compared ten similar Arab and Jewish municipalities. The total  2004 welfare budget for the Jewish municipalities was 220.8 million shekels, with only half that, 107.4 million, for their Arab counterparts.

So with perhaps a quarter of its population not Jewish, a restive Arab minority and a growing number of guest workers from Asia and the developing world, many of whom also seek citizenship, what does it mean to be Israeli in 2007? There is much talk now of ‘Post-Zionism’, an idea which is slowly moving from the fringes of the Israeli left to mainstream politics. Post-Zionism argues that the work of Zionism is done, as Israel exists. The question is what kind of Israel? For there will always be a contradiction between the demands of equal rights for all and the special privileges Israel bestows on its Jewish citizens. What was right and necessary in 1948, in the shadow of the Holocaust, is perhaps not so vital sixty years later.

Some argue that Israel should become a state of all its citizens. This means, essentially, the de-Zionization of Israel, the removal of the privileges given to Jews, such as the Law of Return that guarantees automatic Israeli citizenship and the restrictions that prevent Arabs from buying land owned or administered by the state. The theory posits that Israel would keep its strong bonds with diaspora Jewry, but would no longer be a Jewish state. Instead it would evolve into a ‘normal’, or ‘Israeli-Hebrew’, state in which all its citizens, whether Jewish, Christian or Muslim, would enjoy full equal rights. Israel would not become Palestine, and would continue to exist, but Israeli identity would be based not on being Jewish, but the bonds of shared experience: living on a common territory, sharing modern Hebrew and — eventually — Arabic culture and language, and cultural and commercial  connections. Once the Arab minority felt sufficiently connected to this Israel, with a real stake in society, they too would serve in the army.

To some extent this is already happening. Researching my book City of Oranges, which recounts the lives of Jews and Arabs in Jaffa, I did not meet a single Israeli Arab who would rather live in the Palestinian territories. From radical nationalists to retired accountants, they all want to stay in Israel. As one Muslim Jaffa businessman told me: ‘Here if I have a problem with my premises, the Tel Aviv municipality sends someone to fix it the next day. There, in Palestine, there is nothing, just chaos.’ Druze and Bedouin already serve in the armed forces. Arab Knesset members may demand that Israel revoke all the privileges granted to Jews and become a secular state, even as it pays their salaries and those of the bodyguards protecting them from Jewish extremists. Arabic is an official language used on public street signs. An Arab middle class is emerging: there are Arab university professors and television anchors, army officers and diplomats, even an Arab Muslim cabinet minister, Raleb Majadele, in charge of science, culture and sports. But the psychic disconnect between their national identity and their citizenship endures. Mr Majadele caused uproar earlier this year when he announced that he would stand for, but not sing, Hatikvah, the Israeli anthem, whose lyrics eulogize a ‘Jewish soul’. There is no simple formula for solving this contradiction, although meaningful efforts to equalize state-provided services would be a significant first step.     

So should Israel be a Jewish state, a state of all its citizens, or something in between, a state of the Jews? All this (admittedly very Jewish) agonizing may anyway soon prove unnecessary. Zionism also sought to ‘normalize’ Jews within their own country. David Ben-Gurion famously said that Israel would be a normal country when it had its own prostitutes and criminals — any visitor to some of the rougher parts of Tel Aviv can testify that Tel Aviv is now very normal indeed. Ironically, the slow warming of relations between Israel and its Arab neighbours will also likely make Israel more Israeli and less Jewish. Israeli in the sense that an Israel at peace with its neighbours will have less need of a protective Jewish lobby. It will inevitably focus more on its political, diplomatic and economic interests, at the expense of its role as protector of international Jewry. This will inevitably loosen Israel’s links with the diaspora. The much heralded July visit by the Egyptian and Jordanian foreign ministers to Jerusalem was hailed as a new breakthrough in the stop-start peace process. It may or may not be, but the long-term dynamic, however grudging, is towards peace between Israel and the Arab world and for some unexpected reasons.

Israel’s greatest diplomatic ally, albeit unintentional, is probably President Ahmadinejad of Iran, the Holocaust denying leader who would like to see Israel erased from the map. Doubtless many Arab leaders desire the same, but not with a newly empowered Iran doing the dirty work. The Arab states and Iran are ancient enemies. The bitter divide is rooted partly in the theological split at the birth of Islam between Sunni and Shia factions. Iran, the Arabs’ ancient enemy, is the powerhouse of the Shia world. The rise of Shia military might — evinced in last summer’s war between Israel and Hezbollah, the Lebanese Shia militia sponsored by Iran — has sent shockwaves through the Sunni-dominated Middle East. The prospect of a Shia crescent stretching from Iran and southern Iraq through to Lebanon, combined with a nuclear Iran, has convinced even the sclerotic monarchies of the Gulf that between Tel Aviv and Tehran, the former is the lesser evil.

When a comprehensive peace treaty is finally signed, beyond the details of the political settlement, a whole new range of challenges and opportunities will arise, which will also reshape Israel’s relations with the diaspora. First will be questions of trade and business. Would a Kuwaiti Sheikh be allowed to buy land on the Tel Aviv sea front to build a six-star hotel? How will Israel cope with would-be migrant workers from Syria, Egypt or Sudan? At the moment only a tiny trickle of visitors come from Egypt or Jordan, even though the border is open. But there may be a flood, once it is politically acceptable to visit Israel. How will the border police process Arab businessmen, let alone plane and bus loads of tourists without lengthy, intrusive questioning from security officials?  Hopefully these questions will be answered one step at a time, through slow and steady confidence building measures. These could include trade delegations, press trips for leading journalists and opinion makers and setting up joint Israeli–Arab companies.

All this will alter the priorities of Israeli diplomacy. With the Arab threat to the country’s existence neutralized, world Jewry’s need to defend every action — whether right or wrong — of the Israeli government will weaken. The more secure Israel is, the less Jewish it will be. In one way, the ultimate success of Zionism will be that Zionism is no longer needed. Israel will stand on its own. The Zionist Organisation of America will no longer extol the virtues of building Jewish houses on appropriated Arab land, as ‘Judea and Samaria’ will be part of a free and independent Palestine. The Israeli embassies in Damascus and Beirut will become as important as those in Paris or London. Israel’s ties to diaspora Jewry will remain strong but will evolve, perhaps focusing more on cultural and religious links than political lobbying.

As trade and business opportunities open up in Syria and Sudan, Israelis will choose to learn Arabic as well as English. This will be less an innovation than a return to the era before 1948, when the borders were open and trains left Jaffa for Cairo and taxis for Beirut. The older generation of Yishuvniks were often proud of their knowledge of Arabic language and culture. City of Oranges opens in 1920 with the story of Julia Chelouche, a young Jewish woman preparing for her wedding. The Chelouches came to Jaffa from North Africa in the early 19th century. They spoke Arabic, not Hebrew, at home. They were friends with the Arab elite, worked and did business together. The old Sephardi families such as the Chelouches despaired of the arrogant Ashkenazim from Eastern Europe, who had little interest in the culture of the Middle East. Julia’s daughter, Edith Krygier, told me: ‘My grandmother said to me that they had a better life in Palestine before all the people came from Europe who did not understand the language of the Middle East. You cannot come here and not speak Arabic and have any kind of relationship with the Arabs.’

Israel’s new links with its neighbours will unavoidably bring social change. Free trade sounds innocuous enough, but also triggers political changes, as China proves. As Israelis and Arabs travel, do business and socialize together, there will be an inevitable process of cultural ‘Levantization’, as Israel is, after all, in the very epicentre of the Levant. With the Palestinian question finally solved, a young Israeli businessman in Rehovot may find himself looking for business partners in Riyadh. I think many Israelis and Arabs will be amazed at quite how similar they are. Here, once again, Jaffa could show the way. The Arab-owned Abulafia bakery shuts for Pesach, out of respect for its Jewish customers. The Books and Coffee cafe, on Yefet street, is a rare example of a joint Jewish–Arab venture, popular with both groups, with a good selections of works in both Hebrew and Arabic.

Perhaps a new hybrid culture will emerge, blending Israel’s can-do spirit of American entrepreneurs with a modernizing of the Middle East. There may eventually be open borders, even some kind of Middle Eastern trade federation, modelled on the European Union. From today’s perspective, with Hamas’s victory in Gaza and Iran’s nuclear ambitions, cynics may dismiss this vision of a self-sufficient Israel living in peace with its neighbours as a fantasy. I hope they are wrong, for it is a vision perhaps only as unlikely as Herzl’s dream of a Jewish state more than a century ago. And as Herzl himself said, ‘If you will it, it is no dream.’