The history of Arab-Jewish relations in Israel and majority-minority relations around the world leads us to conclude that Israel's future depends on how it treats its Palestinian minority and more generally on the type of majority-minority relations it develops. Whereas many analysts tend to concentrate on Israel's “external Palestinian problem” – its relationship with the Palestinian population in the territories taken in the 1967 war – we believe that its “internal Palestinian problem” is equally serious. The goal of this chapter is to offer a comprehensive agenda for improving the way in which the internal Palestinian problem is managed.

This chapter provides a systematic program for transforming the relationship between the Jewish majority and the Palestinian minority in Israel, and through this transformation enhancing the quality of Israel's democracy and its long-term political stability. It argues that in order to significantly repair the deteriorating majority-minority relations within it, Israel needs to create a political structure and establish patterns of political behavior that are significantly more congruent with the actual nature of its society.