Good news. Some of the more conservative American Jewish institutions are coming around to acceptance of the two-state solution, ending the occupation, and sharing Jerusalem.

It’s about time. The overwhelming majority of Israelis and Jewish Americans favor those positions and eventually the more status quo-oriented organizations had to catch up—especially now that the Israeli government asserts that it finally has a genuine Palestinian partner.

Today’s New York Jewish Week provides tangible evidence of a seismic shift. The Jewish Week is the largest circulation Jewish paper in the United States. It is the official voice of the New York Jewish community.

Its publisher, Gary Rosenblatt, is an important figure in New York. A respected journalist, and a right-of-center Orthodox Jew, he is a key member of the New York Jewish establishment.

Accordingly, I can’t overstate the significance of an editorial he published in this week’s paper in which he tells Jews to essentially “get real” about Israel, its borders, the future of Jerusalem, the occupation, and the Palestinians.

Rosenblatt writes:

“Now is a good time for diaspora Jews to start thinking about the differences between the ideal Israel and the real Israel. The ideal Israel may indeed have the holy city of Jerusalem as its eternal and undivided capital. But if there is to be a peace agreement—at the end of next year or at the end of this century—it may well call for formalizing the kind of division within Jerusalem that we have seen for decades, with much of East Jerusalem under the sovereignty of a Palestinian government. . . .”

“And we diaspora Jews who have listened so long to Israeli leaders tell us about the state’s absolute red lines must realize that the rhetoric and realities are changing. Otherwise we will be of little help in supporting our brothers and sisters in Israel, the majority of whom have come to believe that an end to wars and bloodshed is worth real sacrifice. They will have to decide if the risks are worthwhile because they already live in the real Israel.”

Rosenblatt’s editorial appeared the same week as Israel Policy Forum’s annual event at a Manhattan hotel. The first thing that struck me about the IPF event was that on each table in the grand ballroom was a centerpiece made up of the American, Israeli, and Palestinian flags. The second was the list of speakers: keynote speaker Haim Ramon, vice prime minister of Israel; Ephraim Sneh, former Israeli deputy defense minister and current MK General; Prince Zeid al-Hussein, Jordanian Ambassador to the United States Prince Zeid al-Hussein; and Afif Safieh, head of the PLO mission to the United States.

Just a week after Annapolis, the IPF event resembled similar events during Oslo’s best days. Clearly, the seven year dormant peace process is back.

But not back at square one.

During Oslo, representatives of Israel, Jordan, and the PLO would have set forth clearly different views of what a future agreement between Israelis and Palestinians would look like. No more.

Although the 2000 Camp David summit failed, it is quite clear that the agreement nearly reached at Taba in 2001 (an agreement that almost surely would have been signed had President Bill Clinton and Prime Minister Ehud Barak remained in office) is alive and is now accepted by both sides as the basis of a final status agreement.

That became obvious in Vice Prime Minister Ramon’s speech in which he made clear that the position of the Israeli government on all the major final status issues is in line with both Taba and the Geneva Initiative.

On the occupation:

“We have to understand that the occupation is a threat to the existence of the state of Israel. . . . If we don’t bring an end to the occupation, the occupation will bring the end to the state of Israel. . . . This is not about giving something to Palestinians. It is rather about trying to secure the Jewish state.”

On Jerusalem:

“It is clear and in the interest of both sides that East Jerusalem will be the capital of the Palestinian state and that its Arab neighborhoods will be under Palestinian sovereignty. It is also clear that the Jewish neighborhoods, including the neighborhoods beyond the 1967 Green Line, will be under Israeli sovereignty.”

On borders:

“It is clear to everyone that territory on the east side of the fence will not remain under Israeli sovereignty. It is even clear to those Israelis currently living east of the fence; they have demonstrated that with their efforts to be included on the west side.”

“Under the Geneva Initiative, the Palestinians recognized that about 2½ percent of the West Bank would be included under Israeli sovereignty. The gap between the two sides is between 2½ and 8 percent. It’s not easy to bridge this gap. It is agreed, however, that between our position of 8 percent and the Palestinian position of 2½ percent there will be a land swap. Where the swap will be and how it will happen is something that we have to negotiate. But the principle is accepted. So let’s formalize it.”

On refugees:

“The Palestinian leadership knows that the refugees will not return to the state of Israel [but to an independent Palestinian state]. They know that the idea of Palestinian refugees having a right to return to the state of Israel contradicts the two-state solution [which they support]. So what will happen with the refugees? What can happen is the creation of an international fund to deal with compensation as well as the humanitarian problems of the refugees. And maybe, if because of humanitarian reasons, and only because of humanitarian reasons, Israel will decide that some of the refugees will return [to Israel], Israel will discuss it.”

On Israeli security:

“The principle that the Palestinian state will be demilitarized is clear. The meaning of demilitarization has to be discussed, but the principle is agreed upon.”

Ramon covered all of the key areas which must be resolved in negotiations. He knows that reaching an agreement will not be easy. Keeping everything west of the security barrier as part of Israel is, in itself, very difficult. Unless parts of the security wall are moved west, the Palestinian state will not be viable and too many Palestinians will be included in Israel against their will and Israel’s demographic interests.

The refugee issue remains problematic. Although the refugees would return to the state of Palestine and not to the state of Israel, the Israeli government will likely have to acknowledge responsibility for creating the refugee problem and offer at least symbolic reparations. Palestinians, for their part, could reciprocate by acknowledging responsibility for the terror Israel has endured for so much of its history. Such statements of empathy cost nothing but, as has been demonstrated repeatedly in situations of conflict, acknowledging the pain one side has inflicted on the other is essential if peace is to be achieved.

Clearly there are hurdles that have to be overcome. Ramon not only believes that they can be, but that a deal can be reached in 2008.

Former deputy minister of defense, and current MK General Ephraim Sneh, agrees. I joined him on a number of visits to Capitol Hill this week and his message was the same as Ramon’s, but with a twist.

Like his mentor and friend, Yitzhak Rabin, Sneh believes that finally ending the occupation and establishing a viable contiguous Palestinian state is not only the right thing to do, but that it will help neutralize real threats to Israel from the likes of Iran and its terrorist clients (i.e., Hezbollah and Hamas).

“Israel must strike a deal as soon as possible with the Palestinians,” Sneh said. “Peace with the Palestinians is crucial for Israel to defeat not only Hamas but Iran and Hezbollah as well. The conflict with the Palestinians is eroding the country’s military strength, while undermining its friendships and alliances in the region and around the world.

“If Israel starts the process of solving the conflict with the Palestinians, it will be easier for the moderates in the Arab world to ally with the Jewish state against extremists like Iran. It is a mistake for people to say that because the government is weak it can’t negotiate. A government that negotiates will be a strong government. If the government does nothing, it will be weak.”

Nothing, Sneh believes, pleases the mullahs and Ahmadinejad more than the perpetuation of the status quo.

So why should that same status quo also please the pro-Israel establishment in the United States? It shouldn’t and, perhaps, at long last, it doesn’t.

The year 2008 will be one of decision. For Israelis, Palestinians, and for the rest of us, too.

MJ Rosenberg is the Director of Israel Policy Forum's Washington Policy Center.