The vast majority of people in Israel think that the best solution to the ongoing conflict with the Palestinians is to establish a separate Palestinian state alongside Israel, according to a poll by Market Watch. 74 per cent of respondents share this view, while 14 per cent think the best way to solve the problem is by creating a bi-national state including both Israelis and Palestinians.

However, 62 per cent of respondents do not believe it will be possible to reach a final agreement with the Palestinians.

The former British mandate of Palestine was instituted at the end of World War I, to oversee a territory in the Middle East that formerly belonged to the Ottoman Empire. After the end of World War II and the Nazi holocaust, the Zionist movement succeeded in establishing an internationally recognized homeland. In November 1947, the United Nations (UN) General Assembly passed a resolution calling for the formation of a Jewish state.

In 1948, the British government withdrew from the mandate and the state of Israel was created in roughly 15,000 square kilometres of the mandate’s land, with the remaining areas split under the control of Egypt and Transjordan. Since then, the region has seen constant disagreement between Israel and the Palestinians, represented for decades by the Palestinian Liberation Organization (PLO). Wars broke out in the region in the second half of the 20th Century, involving Lebanon, Syria, Jordan and Egypt.

Around 750,000 Palestinians fled or were forced to leave their territory during the 1948 Arab-Israeli war. The "right of return"—under which Palestinians aim to re-occupy their homes in Israel—has always been a questionable point in peace negotiations. Hundreds of thousands of refugees from the war and their descendants still live in shantytown camps run by the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), next to Gaza cities and towns.

During the six-day war in 1967, Israel gained control of the Sinai Peninsula, the Gaza Strip, the West Bank, eastern Jerusalem, and the Golan Heights.

Fatah leader Mahmoud Abbas is currently heading the Palestinian Authority from the West Bank, endorsed by Israel and most of the Western international community. Ismail Haniyeh of Hamas has become the de-facto leader in the Gaza Strip.

In November 2007, Abbas and leaders from the United States, Israel and several Arab countries attended an international conference on Middle East affairs in Annapolis, Maryland. The meeting was brokered by United States president George W. Bush. On Nov. 27, Abbas and Israeli prime minister Ehud Olmert announced they would work towards having a peace treaty signed by the end of 2008, which would include the creation of a Palestinian state.

On Aug. 21, Israeli foreign minister Tzipi Livni—who is also a candidate to succeed Olmert this fall—warned that international pressure to reach a peace deal with the Palestinians by the end of this year could have negative consequences, saying, "I believe we need to learn from past experience. Any attempt to try and bridge gaps that maybe it’s premature to bridge because of the international pressure (...) can lead to clashes, this can lead to misunderstandings and to violence."

Polling Data:

Which situation do you view as preferable?

The establishment of a Palestinian state alongside Israel, meaning two states for two peoples .... 74%

The establishment of a bi-national state, meaning one state for two peoples....14%

Neither....9%

Undecided....3%

Do you or do you not believe a permanent status agreement can be reached with the Palestinians to end the conflict?

Believe....34%

Don’t believe....62%

Undecided....4%

Source: Market Watch
Methodology: Interviews with 600 Israelis, conducted on Jul. 25, 2007. Margin of error is 4 per cent.