No people mourn better than the Jewish people. For seven days after death, the family sits shiva, a vigil at home for loved ones to comfort one another and reflect on the life lost. During the following year and then beyond, the stages of mourning develop to allow next of kin to continue their lives while still remembering who is gone from them.

The process is successful for Jews, but it is failing the Jewish state. Six decades since the gravest of their tragedies, Jews have collectively yet to find a sustainable way of moving on without forgetting the Holocaust. The inability to do so poses dire consequences for Israel and the possibility for peace.

For Israel, the Holocaust didn't end in 1945, but reconstituted itself in the country's political and social cultures. It's no accident that Yad Vashem, Israel's Holocaust museum, is physically connected to Har Hertzl, Israel's national cemetery. The symbolism hits you over the head: Israel was born out of the Holocaust, and the price to protect the Jewish people from another one is steep. There is truth in that, but also danger. Binding too tightly the slaughter of Jewish civilians by Nazis and the deaths of Israeli soldiers by Arabs turns every threat to Israel into another Holocaust.

"Whenever someone is killed in a terror activity," says Israeli writer and former Knesset member Avrum Burg, "It is one victim on top of seven wars on top of 6 million on top of 2,000 years of problems." There are no isolated incidents in Israel; the past builds up until a whole way of life is buried by it.

Invoking the Holocaust is the way Israeli policymakers evade the difficult decisionmaking needed to shift the status quo; nothing else matters, and anything is justified, when everything is about surviving annihilation – a rationale that serves especially well in delaying the creation of a Palestinian state.

The two-state solution undoubtedly comes with significant security risks to Israel, requiring a trust and confidence that remain to be seen. Should the West Bank become what Gaza became following the 2005 evacuation of Jewish settlements, all of Israel would be vulnerable to rocket attack and Iranian influence.

Less discussed, however, are the moral, social, and security implications of doing nothing, allowing the occupation to fester, settlements to expand, and tensions to grow.

The situation, as it stands, strains Israel's awkward identity as both Jewish and democratic. Eventually, Israel will be forced to choose one or the other because it will become impossible to untangle itself from an unrealized Palestine.

To remain Jewish will require apartheid measures that ensure Jewish minority control over land that will soon have a Palestinian-Arab majority, or (and even more unthinkable) ethnic cleansing. To remain democratic will mean merging Israel proper and the occupied territories – the end of Israel as a Jewish state.

With these alternatives in mind, two states becomes a much more palatable option – not for Palestine's sake, but for Israel's, and that's how it needs to be sold to Israel and its supporters.

Absent occupation, Israel could allocate more money and attention to internal necessities, namely poverty, education, and environment. With the army out of the West Bank, the 1.2 million Palestinians who live as Israeli citizens might begin to feel more Israeli, no longer viewing their state as at war with their people. The world could finally see Israel the way many Jews have long seen it: tranquil and vibrant, with a brash but pensive culture; Zionism, at last disconnected from occupation, would again be understood as a positive force for justice and social welfare.

None of this can happen until Israel gets its mind out of the Warsaw ghetto and embraces its 21st century strengths. It would be a substantial sociological shift, but it could be hastened in the near term politically if the Netanyahu government agreed to truly unconditional talks about two states. Such a move would force the fractured Palestinian camp to decide whether it is more interested in forming its own state or destroying the Jewish one.

Israel risks little by talking because it holds the keys to a home for Palestinians. Palestinians are free to demand right of return, for example, but do so at their peril. Such nonstarters only serve the notion that they aren't serious enough to make the painful choices necessary to obtain a state, as Jews did in 1947 when they accepted an imperfect UN partition. Ultimately, Israel can walk away without affecting day-to-day life. The Palestinians don't have that luxury; the occupation consumes them.

Israel's founders, given only three years between Auschwitz and independence, didn't have time to process the trauma that had besieged their people, entwining the Holocaust into Israel's DNA. Those who today fill their shoes must find a way to remember the Holocaust without reliving it, lest Israel be forever haunted by memory and never see the power it now wields to make peace and save its moral core.