The Middle East peace process and its quest for a two-state solution to the Israel-Palestine conflict that got under way nearly 20 years ago with the Oslo accords has undergone two fundamental transformations. It is now on the brink of a third.

The first was the crossing of a threshold by Israel’s settlement project in the West Bank; there is no longer any prospect of its removal by this or any future Israeli government, which was the precise goal of the settlements’ relentless expansion all along. The previous prime minister, Ehud Olmert, who declared that a peace accord requires Israel to withdraw “from most, if not all” of the occupied territories, “including East Jerusalem,” was unable even to remove any of the 20 hilltop outposts Israel had solemnly promised to dismantle.

A two-state solution could therefore come about only if Israel were compelled to withdraw to the pre-1967 border by an outside power whose wishes an Israeli government could not defy – the US. The assumption has always been that at the point where Israel’s colonial ambitions collide with critical US national interests, an American president would draw on the massive credit the US has accumulated with Israel to insist it dismantle its illegal settlements, which successive US administrations held to be the main obstacle to a peace accord.

The second transformation resulted from the shattering of that assumption when President Barack Obama – who took a more forceful stand against Israel’s settlements than any of his predecessors, and did so at a time when the damage this unending conflict was causing American interests could not have been more obvious – backed off ignominiously in the face of Prime Minister Benjamin Netanyahu’s rejection of his demand. This left prospects for a two-state accord dead in the water.

The disappearance of the two-state solution is triggering a third transformation, which is turning Israel from a democracy into an apartheid state. The democracy Israel provides for its (mostly) Jewish citizens cannot hide its changed character. A democracy reserved for privileged citizens while all others are denied individual and national rights and kept behind checkpoints, barbed wire fences and separation walls manned by Israel’s military, is not democracy.

At first, the collapse of the assumptions on which hopes for a fair and just resolution of the Israel-Palestine conflict rested triggered much despair. But that despair has begun to turn to anger, and options for resolving the conflict, previously dismissed by the international community as unrealistic, are being looked at anew. That anger is also spawning a new global challenge to Israel’s legitimacy.

Anti-Semitic opponents of Israel will undoubtedly celebrate this emerging challenge to Israel’s incipient apartheid regime. But Israel will have only its own misguided policies to blame for its empowerment of this racist fringe. Such participation will no more detract from the inherent legitimacy of that challenge than Israel’s collaboration (on the development of atomic nuclear weapons) with a racist South African regime in the 1970s and 1980s provided democratic sanction for South Africa’s apartheid.

Mr Netanyahu’s government has hardly been indifferent to the seriousness of this challenge. A study by one of Israel’s leading policy institutes warning of this looming global threat to the country’s legitimacy was taken up by Israel’s cabinet, and described by its members as constituting as grave a danger to the country’s existence as the nuclear threat from Iran. Unfortunately – if predictably – the government’s response has been to mount a campaign to discredit critics as anti-Semitic enemies of Israel, rather than abandoning the policies that are transforming it into an apartheid state.

No country is as obsessed with the issue of its own legitimacy as Israel; ironically, that obsession may yet be its salvation. An international community angered and frustrated by Israel’s disenfranchisement of the Palestinian people, and determined to prevent their relegation to an apartheid existence, may well decide to have the United Nations General Assembly accept a Palestinian declaration of statehood within the pre-1967 borders, without the mutually agreed border changes that a peace accord might have produced. Nothing would challenge Israel’s legitimacy more than its defiance of such an international decision.

Prospects for such international action may serve as the only remaining inducement for Israel to accept a two-state solution. Not only its legitimacy but its survival as a Jewish and democratic state depends on it.

The writer is president of the US/Middle East Project and a visiting professor at the Sir Joseph Hotung Middle East Programme at London’s School of Oriental and African Studies