On the surface, the Israeli-Palestinian conflict might appear as a fairly straightforward confrontation, between two clearly defined actors, based on clashing national aspirations. This is certainly how the international community (which, for the most part, sticks to the “two states for two peoples” mantra) prefers to look at it. However, reality is somewhat different and - to use a cliche - very complex.

Over the past month or so, I attempted to shed some light on the complexities of the peace process. I argued that the one-state solution, which has generated considerable speculation, is not really an obvious default option if the talks fail, and that the debates surrounding it primarily highlight internal splits, specifically on the Israeli side [1].

Subsequently, I explored how the brinkmanship both Israelis and

Palestinians are playing is not simply directed at each other, but also involves a collective effort to squeeze more out of the Barack Obama administration [2]. There are other hidden fault lines, which I hope to address as the developments in the negotiations expose them. One of these involves the position of Arab Israelis.

In an insightful recent opinion piece for Yedioth Ahronot, Israeli analyst Guy Bechor argues that Arab Israelis present a major challenge to the peace talks. He points out that despite paying lip-service to Palestinian national aspirations, in reality they strongly oppose the formation of a Palestinian state. ''Arab Israelis and the Palestinians hold opposite interests in respect to an Israeli-Palestinian agreement,'' he writes. ''The success of the Palestinians may prove to be disastrous for Arab Israelis.''

He gives two reasons for this: one, they are accused of betrayal and pressured by the rest of the Arab world into adopting a stance against Israel that is even more radical than that of the Palestinians. Two, Bechor argues, the creation of a Palestinian state would necessitate the evacuation of thousands of right-wing Israeli settlers - most likely ''to Arab population centers in Israel, at the Arabs' expense.''

It is important to backtrack a little to understand the precarious situation of Arab Israelis. The label refers primarily to Arabs who found themselves in the newly-formed state of Israel after the 1948 war, although later it was expanded to include some Palestinians from the territories annexed after 1967 (most importantly, East Jerusalem). The former were all granted Israeli citizenship, and despite widespread claims of discrimination they enjoy all the benefits (including free healthcare) extended to Jewish Israelis; the legal status of the latter is complicated, but even so most of them have many of the same privileges.

On the other hand, however, despite the relative prosperity of Israel (compared to the Palestinian territories and indeed the rest of the Levant), Arab-Israeli communities are some of the poorest in the country, with underdeveloped infrastructure and high crime rates. They are, moreover, culturally isolated from both Jewish Israelis and the larger Arab world (which generally regards them as traitors even as it claims to fight for their rights). Arab Israelis walk a fine line between seeking integration in Israeli society and keeping alive the connection to their Palestinian brethren in the occupied territories and abroad.

The identity crisis they experience is evident in their different responses to the Arab-Israeli conflict. Some see themselves as a kind of a bridge between the two communities and bitterly bemoan the intractable conflict. ''It is hopeless,'' one interlocutor said. ''I believe the only real solution is for the two peoples to live in the same state, but I don't see either as ready to do that.''

Others consider themselves militantly ''Palestinian'' and, as per their crucial role in the second Intifada and in the periodic subsequent Jerusalem riots, are prepared to rise up violently to fight Israel. Others still - a small though growing group - fully embrace their Israeli identity, and even seek to enroll in the army, from which they are normally exempt. For the story of one of the first Arab-Israeli officers in the Israel Defense Forces, see The lone Arab soldier, ynetnews.com, Oct 13, 2010).

Despite these differences, and often feeling abandoned by both Israelis and Palestinians, most Arab Israelis try to cling together and to put up a facade of unity. They accomplish this primarily by balancing out their Arab cultural identity with the fact that - in the absence of a Palestinian state - the only home they know is in Israel.

This is yet another reason - perhaps the most important one - why it is so difficult for them to accept a Palestinian state independent from Israel. Should a state of Palestine be established, they would be forced to make fateful choices. Either they abandon their lives and homes and move to an uncertain future in yet another Arab state (off the record, Arab states generally have a very poor reputation among Arabs themselves), or they sever all remaining ties with their cultural heritage and stay in Israel. If this moment arrives, the Arab-Israeli community will likely undergo a final convulsion and fracture: thus, Arab Israelis are likely to resist with a force that only true desperation can elicit.

The number of Arab Israelis is estimated at around 1.5 million - roughly the number of residents of the Gaza Strip, or 20% of Israel's population. This means that they cannot simply be disregarded. Depending on their actions, they could either undermine the Palestinian Authority's bargaining positions, or create trouble in Israel, or effect some combination of these possibilities. Unfortunately, this also means that they are attractive as a bargaining chip to be exploited and thrown around by both sides - something that is already happening.

Take, for example, right-wing Israeli Foreign Minister Avigdor Lieberman's recent suggestion to carry out a ''population exchange''. Reports that the Israeli army is secretly drilling to carry out such a scenario may not prove true [3], but even the mention of it serves an important purpose. In essence, Lieberman proposed to call the Arab bluff of unity, and to test Israeli-Arab allegiance toward the Palestinian Authority. It can be argued that, in the very hypothetical case that such a scenario materialized, he was banking on the hope that a great deal of Arab Israelis would choose Israel over Palestine, and thus the Jewish state would get to keep some territories without sacrificing anything.

Something eerily similar emerged when the Palestinian Authority announced that it was considering a "stone Intifada" in Jerusalem [4]. Palestinian National Authority President Mahmoud Abbas' administration threatened to drive a wedge between Arab Israelis against their Jewish compatriots, hoping perhaps to bolster its claim to certain disputed territories - in particular East Jerusalem, where its influence is strongest.

For now, nevertheless, neither Lieberman nor Abbas seem serious in their threats to unleash Arab Israelis on each other. In part, this is because neither is certain what exactly would happen - not least because the strongest Arab-Israeli interest seems to rest with preserving the status quo. It could also be that both sides are instinctively afraid of Arab Israelis, just as binary opposites often tend to silently team up against the middle. Regardless, it is crucial to watch carefully this population segment, as it may hold a key to the success - or, as is more likely, failure - of the negotiations.