The issue of demography is at the top of the national agenda in Israel. It is forcing both the "right" and the "left" to grapple with the difficult dilemma at the heart of the Israel's character.

The "left" uses the spectre of demography to give validity to its call to end the occupation by means of separation through a peaceful settlement of the conflict. The "right" and the Jewish colonists argue that the demographic problem is so big that in any case it can't be solved by giving back territories or by building a fence; it can be solved through the "transfer" of Palestinians.

The fear of the demographic bomb is so great in Israel that the problem is being discussed thoroughly - but secretly - at all levels. It's being examined in academic institutions and universities, National Security Council and even at homes.

The American State Department and the CIA are also taking an interest. The Israeli obsession with demography demonstrates that Israel views the Palestinians existentially as a threat - they are a threat to the Zionist vision just by being there. All Israelis exhibit a deep-rooted fear of all Palestinians, regardless of age or political affiliation.

Indeed, Palestinians do have a very high birth rate. The Gaza Strip has the highest rate of natural population growth in the world (4.4 per cent). It is estimated that by 2020, Palestinians in the West Bank, Gaza Strip, East Jerusalem and Israel will outnumber Jews.

Demography so worries Israeli officials that Ehud Barak used it to justify a two-state solution. He wanted to give the Palestinians a limited, un-contiguous state, with all the trappings, in which they could practice their limited sovereignty in order to give Israel full security.

Thinking the impossible

The fear of demography or, to put it more bluntly, Palestinian numerical superiority, is forcing Israel to contemplate solutions that otherwise would have been impossible.

The new threat of demography is forcing many Israeli officials, even from the extreme right, to shift positions. Those who once advocated a greater Israel, one that includes the West Bank, Gaza Strip and possibly more are now content with less. Maintaining the Jewish character of Israel is actually the widely acknowledged goal of Israeli and American policies.

In 2003, immigration to Israel reached its lowest point since 1989, dropping by 31 per cent compared to 2002, according to official Israeli statistics. Fewer than 24,000 immigrants moved to the Jewish state last year, half of them from the former Soviet Union, according to the Jewish Agency.

Immigration from Russia is drying up. Immigration from Argentina (1,200), France (2,000) and the United States (2,500), which rose slightly in 2003 was not enough to reverse the general downward trend.

Almost 35,000 Jews immigrated to Israel in 2002, down from 44,000 in 2001 and 60,000 in 2002. Half of the 12,500 people who arrived from the former Soviet Union in 2003 and half of those who arrived in recent years are not considered Jews by the Jewish rabbinate. They nevertheless benefited from the "Law of Return" which grants them Israeli nationality because they have close relatives living in the Jewish state.

Experts say the reasons for the drop in immigration are the security situation in Israel, as the Intifada is still raging alongside the economic recession. There are no official statistics on emigration from Israel but the Israeli press has suggested that between 10,000 to 15,000 a year have been leaving Israel since the start of the Intifada.

The demographic threat has always been real since the advent of Zionism. According to Zalman Shoval, a former Israeli Ambassador to Washington and Sharon's adviser, "If Israel keeps control of West Bank Palestinians, it faces a demographic problem. Israel would lose its democratic character if Palestinians are kept under permanent occupation; if they are incorporated into Israel, the country ceases to be a Jewish state."

Sooner or later, Israel will have to make a tough choice between demography and democracy, either there is proper democracy (in which case the Palestinians will dominate) or Israel will be have to adopt apartheid-like rule.

Counter productive

Violence in Palestine shows no sign of abating. The policy of countering violence with counter violence has proved to be fruitless and, in fact, counter productive. Sharon believes that Israeli oppression will eventually force the Palestinians to call off the Intifada.

There is not a shred of evidence to support this view. Equally true, that continued violence cannot force the Israelis to give up all the territories occupied since 1967, given the prevailing circumstances.

This deadlock calls for international action. Both the Israelis and the Palestinians know that the only power on earth which can intervene effectively is the US. But since September 11, 2001, the US has pushed the Middle East peace process down its agenda at least for the foreseeable future.

In the absence of serious American intervention, there are no alternatives for the two adversaries, other than to sit down and discuss their innate mutual fears. Israel must realise that keeping the territories and maintaining complete security for its people are incompatible. Short of this, the area will remain engulfed in a bloody cycle of violence with no hope in sight.

Professor As'ad Abdul Rahman is the Chairman of the Palestinian Encyclopedia