The United States and Israel fundamentally disagree about the need to establish a Palestinian state living side by side with Israel. President Obama is committed to a two-state solution, while Israel’s Prime Minister Netanyahu is opposed and has been for many years. To avoid a direct confrontation with Washington, Netanyahu will probably change his rhetoric and talk favorably about two states. But that will not affect Israel’s actions. The never-ending peace process will go on, Israel will continue building settlements, and the Palestinians will remain locked up in a handful of impoverished enclaves in the West Bank and Gaza. Anticipating this outcome, Obama has told Congress to expect a clash with Israel.

This is not a fight Obama is likely to win, even though the United States is more powerful than Israel and most Americans favor creating a Palestinian state and bringing the Israeli-Palestinian conflict to a close.

Look at the historical record. Since 1967, every American president has opposed settlement-building in the Occupied Territories. Yet no president has been able to put meaningful pressure on Israel to stop building settlements, much less dismantle them. Perhaps the best evidence of American impotence is what happened during the Oslo peace process in the 1990s. Israel confiscated 40,000 acres of Palestinian land, constructed 250 miles of connector and bypass roads, doubled the number of settlers, and built 30 new settlements. President Clinton did hardly anything to halt this expansion.

The main reason no president has been able to stop Israel from colonizing the Occupied Territories is the Israel lobby. It is an especially powerful interest group that has pushed the American government to establish a “special relationship” with Israel, which is, as Yitzhak Rabin once said, “beyond compare in modern history.”

The special relationship means Washington gives Israel consistent, almost unconditional diplomatic backing and more foreign aid than any other country. In other words, Israel gets this aid even when it does things that the United States opposes, like building settlements. Furthermore, Israel is rarely criticized by American officials and certainly not by anyone who aspires to high office. Recall what happened earlier this year to Charles Freeman, who was forced to withdraw as head of the National Intelligence Council because he had criticized certain Israeli policies and questioned the merits of the special relationship.

Many hope that Obama will be different from his predecessors and stand up to the lobby. The indications thus far are not encouraging. During the 2008 presidential campaign, Obama responded to charges that he was “soft” on Israel by pandering to the lobby and publicly praising the special relationship. He was silent during the recent Gaza War—when Israel was being criticized around the world for its brutal assault on that densely populated enclave—and he said nothing when Freeman was forced to quit his administration. Like his predecessors, Obama appears to be no match for the lobby.

Israel’s supporters in the United States often claim that the special relationship is not due to the lobby’s influence. The American people, they argue, identify closely with Israel and put significant pressure on their leaders to support it generously and unconditionally. But there is abundant evidence showing that this is not true. Recent polls indicate that over 70 percent of Americans think that the U.S. should not take sides in the Israeli-Palestinian conflict, and only 47 percent of Americans think that Israel’s influence in the world is “mainly positive.” Moreover, 60 percent of Americans have said that the United States should withhold aid to Israel if it resists pressure to reach a peace agreement with the Palestinians.

In short, a clear majority of Americans do not favor the special relationship and would back Obama if he leaned on Israel to accept a Palestinian state. The lobby, however, would surely side with Israel and pressure the White House to back off. Given the lobby’s track record—as well as Obama’s—it is difficult to imagine him not caving.

Israel’s supporters defend the special relationship because they believe it is an unalloyed good for both countries. In essence, they think that the two countries’ interests are synonymous, and whatever Israel deems good for Israel is good for the United States. From their perspective, there is no need for Israel to change its behavior on any major policy issue, especially on matters relating to the Palestinians.

But they are wrong. Israel’s interests, like any other country’s interests, are not always the same as America’s. Thus it makes little sense for Washington to back Israel no matter what it does because sometimes there will be circumstances in which the two countries’ interests clash. For example, it probably made good sense for Israel to acquire nuclear weapons in the 1960s, since it lives in a dangerous neighborhood and a nuclear arsenal is the ultimate deterrent. But a nuclear-armed Israel was not in the American national interest.

Both countries would be much better off if the Obama administration treated Israel the way it treats other democracies, such as Britain, France, Germany, and India. In practice, this would mean backing Israel when its actions are consistent with American interests. But when they are not, Washington would distance itself from Jerusalem and use its considerable leverage to change Israeli behavior.

The United States is in deep trouble in the Middle East and has a serious terrorism problem in good part because of its unconditional support for Israel’s policies in the Occupied Territories. Backing Israel at almost every turn also makes it harder for Washington to get open support from moderate Arab states, even when dealing with common threats like Iran.

Israel’s backers often maintain that American support for Israel had nothing to do with 9/11, but this claim is simply not true. Consider the motivations of Khalid Sheik Muhammed, whom the 9/11 Commission describes as the “principle architect of the attacks.” According to the commission, “KSM’s animus toward the United States stemmed not from his experiences there as a student, but rather from his violent disagreement with U.S. foreign policy favoring Israel.” Numerous independent accounts have also documented that Osama bin Laden has been deeply concerned about the Palestinian situation since he was young, and the 9/11 Commission reports that he wanted the attackers to strike Congress, which he saw as the most important source of support for Israel in the United States. The commission also tells us that bin Laden twice wanted to move the date of the attacks forward because of events involving Israel—even though doing so would have increased the risk of failure.

In short, there is little hope of ending America’s terrorism problem and improving its standing in the Middle East if the Israeli-Palestinian conflict is not resolved. That will only happen if there is a two-state solution, and that will only occur if the United States puts pressure on Israel.

The special relationship has become a liability for Israel as well. No country has ever pursued a flawless foreign policy, yet the lobby makes it impossible for American leaders to criticize Israel when it does something foolish. Think of the 2006 Lebanon War, when Washington backed Israel to the hilt while it employed a strategy that was, as most Israelis now recognize, boneheaded. The United States would have been a better friend had it pressured Israel to come up with a smarter response or pressed for a quick ceasefire. But that is not how the special relationship works. It is hard to see how this situation makes good sense for Israel.

So how should the Obama administration react to Netanyahu’s opposition to a Palestinian state? The key to understanding this vital issue is to consider two questions. First, what does Israel’s future look like in the absence of a two-state solution? In other words, where is Israel headed if Netanyahu gets his way? Second, what are the likely consequences for America, Israel, and the Palestinians?

Given present circumstances, there are three possible alternatives if the Palestinians do not get their own state, all of which involve creating a “greater Israel”—an Israel that effectively controls the West Bank and Gaza, or all of what was once called Mandatory Palestine.

In the first scenario, greater Israel would become a democratic binational state in which Palestinians and Jews enjoy equal political rights. This solution has been suggested by a handful of Jews and a growing number of Palestinians. It means abandoning the original Zionist vision of a Jewish state, however, since the Palestinians would eventually outnumber the Jews in greater Israel. Uri Avnery, a prominent Israeli journalist and peace activist, is surely correct when he says, “There is no chance at all that the Jewish public will agree, in this generation or the next, to live as a minority in a state dominated by an Arab majority.” Israel’s supporters in America would also have virtually no interest in this outcome.

Second, Israel could expel most of the Palestinians from greater Israel, thereby preserving its Jewish character through an overt act of ethnic cleansing. This seems unlikely, not just because it would be a crime against humanity, but also because there are about 5.5 million Palestinians between the Jordan River and the Mediterranean Sea, and they would put up fierce resistance if Israel tried to expel them from their homes.

Still, there are good reasons to worry that Israel might adopt this solution as the demographic balance shifts and concerns about the survival of the Jewish state intensifiy. It is apparent from public-opinion surveys and everyday discourse that many Israelis hold racist views about Palestinians, and the recent Gaza War made clear that they have few qualms about killing Palestinian civilians. A century of conflict and four decades of occupation will do that to a people. Furthermore, a substantial number of Israeli Jews—40 percent or more—believe that the Arab citizens of Israel should be “encouraged” to leave by the government. Indeed, former foreign minister Tzipi Livni recently said that if there were a two-state solution, she expected Israel’s Palestinian citizens to leave and settle in the new Palestinian state.

The final and most likely alternative is some form of apartheid, whereby Israel increases its control over the Occupied Territories, but allows the Palestinians limited autonomy in a set of disconnected and economically crippled enclaves. Israelis and their American supporters invariably bristle at the comparison to white rule in South Africa, but that is their future if they create a greater Israel while denying full political rights to an Arab population that will soon outnumber the Jewish population in the entirety of the land. Former prime minister Ehud Olmert said as much when he proclaimed that if “the two-state solution collapses,” Israel will “face a South-African-style struggle.” He went so far as to argue, “as soon as that happens, the state of Israel is finished.” Other Israelis, as well as Jimmy Carter and Bishop Desmond Tutu, have warned that continuing the occupation will turn Israel into an apartheid state.

These three outcomes are the only alternatives to a two-state solution, and each would be disastrous for the Jewish state. Apartheid is not a viable long-term solution because the Palestinians will continue to resist until they achieve independence. Their resistance will force Israel to escalate the same repressive policies that have already cost significant blood and treasure, encouraged political corruption, and badly tarnished the nation’s global image. More importantly, there would be little support and much opposition to an apartheid state in the West, especially in the United States, where democracy is venerated and segregation is condemned. This is why Olmert said that going down the apartheid road would be suicidal for Israel.

But bringing democracy to greater Israel would also mean the end of the Jewish state because the more numerous Palestinians would dominate its politics. That leaves ethnic cleansing, which would certainly keep Israel Jewish. That murderous strategy, however, would do enormous damage to Israel’s moral fabric, its relationship with Jews in the diaspora, and its international standing. Israel and its supporters would be treated harshly by history. No genuine friend of Israel could support such a heinous course of action.

Given this grim situation, it is not surprising that a significant number of Israelis have moved abroad and many others would leave if they could. There are somewhere between 700,000 and 1 million Israeli Jews living outside the country, many of whom are unlikely to return. Since 2007, emigration has been outpacing immigration in Israel. According to scholars John Mueller and Ian Lustick, “a recent survey indicates that only 69 percent of Jewish Israelis say they want to stay in the country, and a 2007 poll finds that one-quarter of Israelis are considering leaving, including almost half of all young people.” They report, “in another survey, 44 percent of Israelis say they would be ready to leave if they could find a better standard of living elsewhere,” and “over 100,000 Israelis have acquired European passports.” These figures are a bad omen for Israel.

This discussion of where Israel is heading raises the obvious question: would it not be in Israel’s best interests for President Obama to put significant pressure on both Israel and the Palestinians to agree to a two-state solution? In fact, would it not have been better for Israel if the United States had long ago stopped it from building settlements and instead helped create a Palestinian state? One wonders what future the opponents of a two-state solution envision for greater Israel, for it is hard to see a favorable outcome if the Palestinians do not get their own state. This is not to say that two states living side by side represents an ideal outcome for either side; it is simply better than the alternatives.

Finally, denying the Palestinians their own state is not in the lobby’s interest, and not just because of the consequences for Israel. Over the past two decades, the case for backing Israel—no matter what it does—has become a tough sell in the United States, especially on college campuses. Younger Jews appear to be more willing to criticize Israel than their elders. Americans of all persuasions are becoming increasingly aware of what Israel did to the Palestinians in 1948 and what it has been doing in the Occupied Territories since 1967. Consequently, Israel no longer looks like the victim; it looks like the victimizer, and a ruthless one at that. This situation is sure to get worse if Israel turns itself into an apartheid state in full view of the world.

Because Israel’s treatment of the Palestinians will be increasingly hard to defend, the lobby will have to rely more than ever on threats and intimidation. Facts and reason are not effective weapons when trying to justify an apartheid state. Given the growing awareness of the lobby’s activities—thanks mainly to the Internet—its actions are already being scrutinized in ways they were not in the past. In other words, it has become difficult for the lobby to wield its influence without leaving fingerprints, and greater recognition of its role is likely to trigger greater resentment. Its torpedoing of the Freeman appointment, which was widely discussed in the blogosphere and eventually by the mainstream media, is a case in point. The lobby’s behavior will become more heavy-handed and transparent, which runs the risk of angering large numbers of Americans, including many Jews. It would be much easier for the lobby to defend Israel if it lived alongside a Palestinian state.

President Obama would like to change the situation because he understands that a two-state solution would be good for America, good for Israel, and good for the Palestinians. But Netanyahu seems determined to thwart his efforts. Who is likely to win this fight?

As things stand, Obama has little chance of prevailing, mainly because the lobby’s key institutions will side with Israel, and the American president shows little sign of being willing to take on the lobby. Other factors also weigh against him. There are about 480,000 settlers and a huge infrastructure of roads and settlements in the West Bank. Given that the political center of gravity in Israel has shifted sharply to the right over time, it is hard to imagine any Israeli government having the political will, much less the ability, to dismantle a substantial portion of that enormous enterprise. Consider that a February 2009 poll found that 59 percent of Israelis opposed a Palestinian state; only 32 percent supported it.

Nor is there much sympathy for the two-state solution in the American Jewish community. A 2007 survey found that only 46 percent of Jews in this county favored the establishment of a Palestinian state, probably because 82 percent of those surveyed believed that “the goal of the Arabs is not the return of occupied territories but rather the destruction of Israel.” A 2008 J Street poll showed more support for the two-state solution (78 percent) but also revealed substantial opposition to dismantling Israeli settlements and making East Jerusalem part of Palestine. Those reservations, coupled with deep-seated fears of Palestinian motives, will help the lobby’s hardliners make their case. Of course, Christian Zionists will adamantly oppose the two-state solution: they want Israel to control every square millimeter of Palestine because they believe that will facilitate Christ’s Second Coming.

Obama’s only hope—and it is a slim one—is that a substantial part of the American Jewish community will come to understand Olmert’s warning that Israel will become like white-ruled South Africa if there is no two-state solution. More American Jews need to understand that Israel is in serious peril and that the situation is likely to get worse, not better. Obama would be acting as Israel’s friend if he put pressure on both sides to reach a settlement. If there is no agreement, Israel faces a grim future, and it will become very difficult to defend Israel. In short, more Jewish-Americans need to recognize that it is in their interest to champion the two-state solution.

If that does not happen, Obama will be unable to get tough with Israel. There will be even more trouble ahead for Israel, the United States, and especially the Palestinians.