For several years now, and certainly since the second Intifada’s outbreak, Palestinian economist demanded in every forum that the Paris Agreement, which in 1994 created a uniform external border for Israel and Palestinian for the purpose of duty collection, be annulled. The Palestinians viewed this duty collection amalgamation as a tangible and irritating expression of Israeli occupation. Therefore, they demanded that a clear economic border be drawn between Israel and the Palestinian Authority (along the Green Line, of course) that would illustrate the separation and sovereignty of the Palestinian economy.

Yet this time around I was surprised to hear the Palestinians praising the joint duty arrangement and viewing it as the right approach. Their new demands now focus on the thorough and strict implementation of that same hated Paris Agreement: Free movement of goods, services, people, and capital between the territories and Israel. Just go ahead and remove the roadblocks, the Palestinians say, and everything will be alright. There is no need for any kind of separation fence, or wall, or economic border between you and us. For them, one economy is a step on the road to a bi-national state.

‘Apartheid’ replaces ‘occupation’  
One of the most blatant indications of the changing Arab approach is the shift from using the word “occupation” to define Israel’s actions in the territories to the word “apartheid.” An “occupation discourse” calls for liberation and withdrawal of the occupier back to its home country and own borders; meanwhile, an “apartheid discourse” calls for respecting the rights of all ethnic and national groups residing in the same country. An occupation regime ends when the country is partitioned; an apartheid regime ends without partition.

The Israeli public is imagining that a divorce agreement has already been achieved vis-à-vis the Palestinians: We left Gaza, we almost completed the fence, and we separated the economic systems. We do not see Palestinian laborers around here, and we see no Israelis in Jericho. The Jericho casino is locked up and rusting. Yet this is a case of self-deception; an illusion. We now see the emergence of a new reality of “two regimes in one state,” and the distance from there to a bi-national state is short.

World leaders understand this. They realize that there is only limited time left to salvage the idea of a separate Palestinian state alongside a Jewish state. This is the only explanation for the West’s willingness to contribute $7.5 billion to the rehabilitation and strengthening of the Palestinian economy as an economic entity that is separate from Israel. This money is supposed to be used for one objective: Preventing the “Partition Plan’s collapse” and accelerating the establishment of a Palestinian state alongside the State of Israel, before it is too late to do so. It may be too late already. The time left for reaching a two-state solution is running out.

Recent meetings I held with Palestinian and Arab thinkers and shapers of public opinion left me with the feeling that the camp espousing the establishment of an independent Palestinian state alongside Israel is rapidly declining. On the other hand, there are growing fears that the “two-state solution” conception is sinking, while the “bi-national state” conception is gaining strength.

Things that only a year ago appeared to Palestinians as incisive evidence of Israeli-Jewish colonialism now appear to be a (positive) leverage for establishing a joint national space. For example, look at the economic regime in the territories.