If we are to believe the pundits and partisans, relations between Israel and the United States have never been worse. US President Barack Obama’s administration appears to be taking the toughest tone of any in recent memory. Obama’s Cairo speech didn’t help, leaving an already vulnerable-feeling Israel with the sense that it was getting thrown under the bus.

A major division is settlements. Obama wants an immediate halt, while Israeli Prime Minister Benjamin Netanyahu will agree at most to a partial pause. Even left-leaning Israelis feel the American demand is too much too soon; a 35-year problem shouldn’t be hurried.

There are now more than 285,000 settlers in the occupied West Bank beyond East Jerusalem. Though many might be coaxed back to Israel proper following an agreement with the Palestinians, a menacing minority has made clear its intention of preventing peace at any price, while simultaneously claiming to be a non-issue. However this minority can become a non-issue if Israeli, Palestinian and international negotiators re-think the path to peace.

In every attempt, those involved in cutting deals between Israel and the Palestinians have always tried going through the settlers, a self-defeating tactic because doing so only gives them more power. A new approach is to outmaneuver them – set a border that’s defensible for Israel and functional for Palestine, and urge the settlers to either get behind that border, with government assistance, or become a Jewish minority in the Palestinian state.

That may seem unthinkable. Settlement expansion has been de facto Israeli policy for nearly as long as Israel has controlled Palestinian territories. To now hand them over to a Palestinian state would be to punish people for doing what their leaders encouraged them to do.

Except, while politicking postponed any clear decision-making on what should be done with land captured in 1967, the settlers were gaining numbers, and with numbers, strength which they use to promote interests detrimental to the whole. They demanded services at a huge expense to the treasury, they exposed soldiers to unnecessary danger and they defied court orders to cease and desist. The more extreme settlers used and use violence, leading a soldier-friend of mine to remark, “Hebron is the only place in the West Bank where a soldier feels safer around Palestinians than around Jews.” This is not behavior a democracy should tolerate, nor tacitly condone.

An ultimatum to settlers would force them to choose between the modern state of Israel and its biblical promise, possibly encouraging many to acquiesce without major incident. Those who remain could retain their Israeli citizenship, with an open invitation to return, but would become Palestinian citizens. Living no differently from other diaspora Jews, they would be subject to the laws and values of their state.

At first blush, a Palestinian Jew may sound like an oxymoron, but no more than Israeli Arabs; Palestinians living as Israeli citizens, who comprise more than 20 percent of the Jewish state’s population. Since Palestine would have to resemble a democracy, as Israel does, there is no reason minorities could not live there. In fact, it might help Palestine feel like a normal country.

The idea of withdrawing Israel but leaving Israelis has yet to go mainstream, but there have been hints. Palestinian Prime Minister Salam Fayyad said as much at the Aspen Ideas Festival last July, when he declared that Jews would be welcomed in a future Palestinian state.

Gershon Baskin, co-director of the Israel-Palestine Center for Research and Information, proposed in a recent Jerusalem Post column to “link the rights, privileges and obligations of Palestinians in Israel to those of Jews in Palestine … to close the gaps of discrimination against Palestinians in Israel and prevent the discrimination against Jews in Palestine.”

That’s a good idea, and should go further to require that Jewish holy sites that fall outside Israel be protected and accessible to non-Palestinians. This would ensure spiritual sovereignty over the land regardless of political jurisdiction.

The hard part would be getting the current Israeli government, which includes settler allies, to agree. But Netanyahu, though hawkish, is a pragmatist whose relationship to ideologues remains one of convenience. He already believes in building the Palestinian economy, something hard to do with Israel’s security apparatus stifling the flow of goods, services and labor.

Netanyahu will pursue the most politically and financially expedient course and will only go so far in alienating Israel from the US administration. Influential Foreign Minister Avigdor Lieberman, may have little compassion for Palestinians, but he cares deeply that Israel remains a Jewish state – more so than the particulars of the boundaries that come to define it.

Though a settler himself, Lieberman could be counted among those who might return to Israel under the right conditions, as evidenced by his decision to distance himself from the settlement issue when it became clear that it posed a conflict of interest.

Given their savvy, Netanyahu and Lieberman can find a way to circumvent the most ardent elements of the settler community, thereby minimizing their political weight. If Israelis can see a Palestinian state as beneficial to them as it is for Palestinians, the settlers would become exactly what they say they are: a non-issue.