November 29, 1947, was a watershed date in modern Jewish history. The family of nations, through the United Nations, decided in Resolution 181 to split Palestine, which was to be vacated by the British Mandate between an independent Jewish state and an independent Arab one.

The Jewish state was thus to become the national homeland of the Jewish people. The Jewish side, through the Jewish Agency, accepted the UN resolution with joy and realism. The Arab side, through the Arab League, refused with grim shortsightedness.

The British withdrew a few months later and Israel was declared an independent state on May 18, 1948. It was immediately attacked by the Arab armies that were ultimately defeated by the tremendous motivation of the reborn Israel.

This week marked the 64th anniversary of the UN vote, and we are still in conflict over the same question of Palestine.

The Palestinians are still stateless, and their leadership still refuses to recognize Israel as the homeland of the Jewish people.

While Israel has, since at least the 1967 war, committed every mistake possible on the issue of Palestine, if not worse, by being enamored with the corrupting occupation; by not achieving a realistic permanent-status agreement; and by being led by the settlers, who have become the biggest obstacle to a peaceful resolution. At the same time, the Palestinian side continues to suffer from historical myopia.

I often tell my Palestinian friends that it has never crossed my mind to ask their recognition of our Jewishness. This depends on us, not them. Yet once the issue has been raised by Prime Minister Binyamin Netanyahu, in one of his systematic alibi attempts aiming to show why peace is seemingly impossible, we have to say that the historical fact is, as it was stated in 1947, that Israel is the one and only historical homeland of the Jewish people. The Palestinians counter by raising the issues of Palestinian refugees and the Israelis Palestinians.

The issue of the refugees is a serious problem and tragedy which needs to be solved by the parties, including the Arab states which accepted the refugees, and by the international community. Israel should also shoulder some of the burden and responsibility when resolving the issue. Yet their historical homeland – internationally recognized today as the State of Palestine to be established hopefully in the year to come – should be the one to which there is a right of return, not Israel.

In the same manner that a Jewish family originally from Hebron has no right of return to the city of our ancestors, an Arab one from Jaffa has no right of return to theirs. Therein ultimately lies the historic compromise and the basis of a two-nation-state solution.

Regarding Israeli Palestinians – they indeed are treated as second-class citizens by us, in terms of income, employment, services, infrastructure in cities and villages, and the racist Israel Beiteinu legislation. They are an important minority group which must demand rights of equal citizenship, yet cannot expect to receive national rights within Israel.

Sixty-four years after 1947, the time has come for a new historic covenant between the Israeli and Palestinian leaderships, one which is based on mutual recognition of each other’s national rights.

The Palestinian side, led by Mahmoud Abbas and the PLO, should finally recognize Israel as the homeland of the Jewish people (even by referring to the November 29, 1947, resolution, which they have already admitted it was a mistake to reject). At the same time, asking for a contiguous state within the 1967 borders with mutually agreed land swaps; with the issue of Jerusalem solved along the lines of the “Clinton Formula” – Arab Muslim and Christian neighborhoods, and their holy sites as a Palestinian capital, and the Jewish ones as Israel’s internationally recognized capital.

The Palestinian refugee problem should be solved according to the Saudi peace plan – “a just solution to the refugee problem agreed upon by the parties.”

The Palestinians must recognize that their right of return is to sovereign Palestine. This will come with international compensation, family reunions and socioeconomic development support for refugees.

Given the recent meeting between Hamas’s Khaled Mashaal and Abbas, the Palestinians should come to the negotiating table as a united front. Hamas can no longer be overlooked. Yet the new Palestinian government will have to recognize Israel, honor previous agreements between the parties and declare an end to violence.

Abbas, as Hamas agrees, should lead the negotiations.

As for Israel, we too have historic decisions to make, preferably also out of national unity: No more “greater Israel”; no more occupation of another people; no more settlement expansion; and “yes” to a Palestinian state, the homeland of all Palestinian Arabs, as Israel is the homeland of all Jews, within the 1967 lines so that refugees can be absorbed in Palestine; with stringent security measures to prevent violence and terror; with full diplomatic and economic relations; a gradual withdrawal of the IDF and of the settlements into three settlement blocks, within the perimeters of mutually agreed land swaps.

Nothing short of major historic decisions on both sides and strategic recognition of historical and current demographic realities, will lead to a solution of this problem, which given the turmoil in the region is today more critical than ever.

Without a solution, the Palestinians might lose their opportunity for statehood and we might sacrifice our peace with Egypt and Jordan. The two sides would endanger their very identities – we as a Jewish-democratic state and the Palestinians taking the risk of not finding a place among the family of nations.

Only such an agreement would give the leaderships the necessary legitimacy with their constituencies. And only such an agreement will provide for the most important goal – the future of our states and peoples, and their well-being and security. Only with peace can society and economy develop; only in peace can there be social justice; only in peace can the young focus on education and employment; only in peace can one be part of globalization and reap its fruits; only in peace can we strengthen our regional national security against real regional threats; only with peace is there a horizon of hope; only with such decisions can the circle that was opened on November 29, 1947, be closed.

The alternative is for both sides to live in denial of historical realities, needs and rights. Today’s reality would be replaced by another one, one of conflict and violence, between Israel and the Palestinians, possibly with the support of Hezbollah. Within the region, the fundamentalist forces would be strengthened. Internationally, both sides would lose support. Iran would be delighted.

In such a scenario, a regional war is not out of the question. And after that, it could be 1947 all over again.

The writer is president of the Peres Center for Peace and served as Israel’s chief negotiator for the Oslo Accords.