JERUSALEM -- With time running out on the U.S. George W. Bush administration and without a settlement of the Israeli-Palestinian dispute having been reached, as was hoped, the idea of a Palestinian-Israeli confederation is gradually replacing that of a two-state solution.

The notion has been floating around for several years now, in various forms. Josef Avesar, an Israeli-born attorney now based in California, is the founder of the Israeli Palestinian Confederation committee (IPC).

With the failure of successive governments on both sides to reach a final-status agreement, the organization has outlined a plan to create an Israeli-Palestinian confederation, which would complement existing governments on both sides, but not marginalize them.

Avesar envisions a confederation where Israelis and Palestinians would each retain independent sovereign governments with the same authority they had in the past, while a third government will be made up of Israelis and Palestinians together.

The IPC proposes that 300 people represent the population of the entire area of Israel, the West Bank and Gaza. The delegates will be either Israeli or Palestinian according to their proportion of the population.

In order to pass legislation, 55 percent of the Palestinian delegates and 55 percent of the Israeli delegates must vote in favor of a bill. The separate Palestinian and Israeli governments would be given veto power. If neither side uses the veto, the bill would become a law.

The confederation will have a national director and a vice director, one of whom will be Palestinian and the other Israeli. They will serve their term by rotating their offices.

This idea of a confederation is to create a separate track to the current negotiations between the Israelis and Palestinians.

But while the idea may look good in theory, it has plenty of critics.

Uri Dromi, a former Israeli government spokesman says this idea is not feasible.

"We always have to think out of the box because we're stuck at a dead end, but this idea is detached from reality," he says. "It will only create bureaucracy that will complicate things further.

"I'm for separating the Palestinians and the Israelis. I'm for helping the Palestinians create their viable Palestinian state, mainly economically and creating living conditions on the ground, but a confederation is unrealistic."

Ephraim Sneh, a former deputy defense minister in the Israeli government is not against a confederation, but he has his own views as to the structure of this framework.

First, Sneh says, a confederation should be the outcome of a peace agreement between Israelis and Palestinians, not a precursor. Secondly, it should be expanded to include neighboring Jordan. Once formed, it will be a framework for dialogue on joint issues such as trade, environment, energy and water.

"Israelis, Palestinians and Jordanians share the same defense interests," he says. "Where there is a joint interest there is a base for a framework and that can be a confederation."

The initial stage should include a Jordanian-Palestinian confederation and only later it should incorporate Israel, Sneh believes.

Hana Siniora, a member of the Palestinian National Council and co-CEO of the Israel-Palestinian Center for Research and Information organization, is also a proponent of the confederation idea.

But he says any warm working relationship between the parties depends on internal political developments on both sides.

"We have to watch the Israeli elections and we hope to see reconciliation between Fatah and Hamas, because the [current] situation isn't conducive to a political settlement," he told The Media Line.

One factor that was not taken into account when the idea was first conceived is that Gaza is currently governed by Hamas, which does not recognize Israel's existence.

Avesar, however, believes this should not hamper the idea of a confederation.

"The Hamas government is a government of the Palestinian people, especially in Gaza. The Hamas government may be recognized by the confederation, and they will be given veto power so the confederation will become a mediator between the Israeli government and the Palestinian government, or the Hamas government."

Avesar is well aware that his audience views his ideas as nothing more than an intellectual exercise.

The fact that the standard definition of a confederation does not gel with his vision is a minor challenge in his view. A frequently heard criticism is that a confederation can only be formed between two sovereign states, and the Palestinians do not have a state.

"We'll make it between two governments and the dictionary will change the definition rather than us changing reality," he says. "You work based on reality and the reality is that the Palestinians and the Israelis have been at each other's throats for a long time. We have to deal with this."

Some suggest that energy and environment should be the initial points of cooperation, which could then lead to bilateral and possible trilateral relations.

Proponents of the confederation view the European Union as a model that proves the idea can succeed.