Benny Morris is one of today's most serious and disturbing pessimists about peace in the Middle East, because he used to be a card-carrying leftist and has been instrumental in uncovering Israel's role in the creation of the Palestinian refugee problem in 1948. He reaffirms his pessimism in a recent article in the Guardian, and says Barack Obama is taking on mission impossible; that his attempt at renewing the peace process is doomed to failure.

The title of his recent book One State, Two States: Resolving the Israel/Palestine Conflict is misleading, because its thesis is that the conflict cannot be resolved. He believes that Palestinians in particular and Arabs in general have never accepted Israel's existence, and that they will not do so for a long time.

Morris, in an interview with Ari Shavit, says he continues to be man of the left, because he continues to favour the two-state solution in principle. He just doesn't believe it's feasible. Morris's state of mind is reflected in the left's disappearance in the Knesset – Israel's citizens are not willing to vote for principles, if they see no realistic hope for peace.

While I respect Morris's intellectual integrity and status as a great historian, I think he is wrong, because his assessment of the present situation is strongly influenced by the trauma of the failure of Camp David 2000, notions about the clash of civilisation and the nature of Islam. I believe that there are good empirical reasons to believe that peace is possible, and that the left needs a new, pragmatic vision to regain the public's support.

Neither Palestinian nor Arab rejectionism are immutable laws of nature. Morris is not relating to a sea-change in the Arab world, because this change is not a sudden love for Israel. Arab leaders know that the days of their oil-based economies are limited, and many of them are attempting to modernise their countries.

They also know that political Islam threatens their own regimes, and that only economic development and a positive horizon of a future for their disaffected youth will prevent an Islamic takeover. They know that such modernisation requires close ties to the west. This is reflected in the Arab League's peace initiative – which Morris, like all Israel's governments, simply chooses to disregard.

Morris is also inattentive to ongoing changes in the West Bank. General Dayton has documented the increasing effectiveness, transparency and accountability of the Palestinian security forces he is training. It is surprising how little attention Morris pays to the revolution that Fatah has undergone and the rise of a younger, much more pragmatic leadership and the deserved respect Palestinian prime minister Salam Fayyad is gaining for his unflinching sense of justice and pragmatic efficiency.

There are deep reasons for Morris's disillusionment. Like most Israelis, he is traumatised by the shattered hopes of 2000, when the failure of Camp David was followed by the second intifada. Like most Israelis, he mistakes the end of the dream of Peace Now for the end of the hope for a gradual process towards peace.

My response to Morris is that we need to awaken from the trauma of 2000. A credible vision for the left requires sticking to our moral principles, but to take a much more pragmatic approach to peace-making. No Israeli government will be able to move out of all of the West Bank tomorrow before the security situation is cleared up. But the settlements and roadblocks in the heartland of Palestine must be dismantled immediately to increase Palestinians' quality of life, to make economic development possible to give hope to Palestinian youth.

This is a realistic opportunity: there are many business people willing to invest in Palestine's economy and to create genuine synergies between Israel and Palestine, and it will speed up the road towards establishing a Palestinian state, even with temporary borders, as Fayaad has suggested.

I expect the following objection: "Aren't you selling out to Netanyahu's ploy of 'economic peace'? Aren't you abandoning the basics of the left's vision?"

The answer is a clear no. I have no idea what Netanyahu's vision for the future is – and sometimes I doubt that he has one. My vision is very clear: a retreat to the 1967 borders and unequivocal assertion of the Palestinians' right to their own state.

We need to stick to our ideals, and yet be pragmatic in creating a blueprint for the details of the peace process. That's hope we can believe in.