Under prevailing circumstances, Palestinian Authority Prime Minister Salam Fayyad's unilateral state-building plan is the best option available for all those truly concerned with advancing a two-state solution that maintains Israel as a Jewish and democratic state. Not only must Fayyad succeed in the coming year, but the international community must endorse and recognize his achievement and encourage Israel to follow suit.

I say this with a heavy heart. It is not easy for an Israeli to encourage the world to ratify a unilateral Palestinian solution. But after nearly 20 years of trying, it should be clear that neither the Israeli nor the Palestinian leadership is capable of agreeing on a negotiated two-state solution. The current Netanyahu government in Israel, with its heavy right-wing bias and its focus on creating unilateral Israeli "facts on the ground", is almost certainly not a candidate for working productively with the Palestinians toward an independent Palestinian state. Perhaps most important, in view of growing frustration with the failure of negotiations, the Fayyad plan is the best non-negotiated solution we Israelis could conceivably ask for.

Fayyad's effort is the first Palestinian state-building success since the Oslo process began in 1993. For the first time, Palestinians are delivering on security, the creation of governing institutions and the systematic suppression of corruption. It is now clear that such an effort was impossible under the rule of the late Yasser Arafat, where violence was endemic and billions in aid funds went down the drain. It is also clear that Fayyad's effort is possible, despite the constraint of Israel's ongoing settlement-building, thanks to the cooperation of the Israeli security establishment and broad international financial and technical-professional support.

Fayyad, who has little or no grassroots political support, is clearly dependent on the backing of President Mahmoud Abbas to maintain the momentum of his efforts. We can only hope that the vicissitudes of Palestinian politics do not undermine them in the year-and-a-half remaining for the Fayyad plan to run its course. It is also critical that during this time Fayyad clarify for us what he intends to do with his unilateral state structure. Until recently he declared that, in the absence of Israeli-Palestinian agreement on a two-state solution by August 2011, the Palestinians would ask the United Nations Security Council to recognize the new state. But at the Herzliya Conference in Israel a little over a month ago, he told an Israeli and international audience that the fait accompli of a Palestinian state in the summer of 2011 would serve merely to pressure the parties to reach agreement.

Frankly, I prefer the first option of Security Council recognition. The second option is likely to prove as useless as all previous efforts to persuade the parties to make the necessary negotiating concessions. We saw with Abbas' rejection of PM Ehud Olmert's extraordinary 2008 peace offer that the Palestinian president is incapable of bending on the core issues. As for Netanyahu, his commitment to a two-state solution is belied by the coalition company he keeps and--even when he's more careful about the timing so as not to embarrass visiting American dignitaries--the settlements he builds. Meanwhile, time and international patience are running out.

Here's what the option of Security Council recognition of Fayyad's emerging creation appears to offer Israel: a Palestinian state within the 1967 borders, partially occupied by Israel. De facto, the new state does not control most of its territory; it exercises no control at all in the Gaza Strip. Israel is confronted by the entire international community with the demand to negotiate a phased, orderly withdrawal to the 1967 lines or equivalent borders--something recent Israeli governments have in any case agreed to do. It has to make space for a Palestinian capital in Jerusalem--a sine qua non for any viable agreement. It can condition its withdrawal on the implementation of reasonable security arrangements.

But Israel does not have to confront unacceptable Palestinian demands regarding the right of return and the Temple Mount and Holy Basin in Jerusalem in order for this Palestinian state to come into existence. Those issues are no longer preconditions; they will remain in contention--but between Israel and a sovereign Palestinian state that has to behave very differently from a liberation movement. Nor will Israel be held responsible for the divide between the new state in the West Bank and the land it claims from Hamas-ruled Gaza. Whether there are one or two Palestinian states becomes Palestinian business.

Make no mistake: the emergence of an internationally recognized Palestinian state in the West Bank will not officially end the conflict in the sense of resolving all claims. But it could create an entirely new and far more stable two-state reality based on Palestinian efforts, Israeli readiness to negotiate the territorial issue based on the 1967 border--but only the territorial issue--and international recognition.

True, international recognition of the Fayyad plan effectively ends the Oslo accords, which require that neither side take such unilateral measures. A truly irresponsible Israeli government could respond by annexing those areas of the West Bank, some 60 percent, that lie beyond the autonomy borders. That's why it behooves the international community to embrace this issue now and point out to Netanyahu that this is the best deal he will ever get.
Yossi Alpher is coeditor of the bitterlemons family of internet publications. He is former director of the Jaffee Center for Strategic Studies at Tel Aviv University.