JERUSALEM (AFP) - As negotiators begin indirect talks with the ultimate aim of creating a Palestinian state next to Israel, voices on both sides are warning that the opportunity for a two-state solution has already slipped away, or at best is fading fast.
"Definitely the fight for a two-state solution is obsolete," says Meron Benvenisti, a former deputy mayor of Jerusalem and veteran observer of Palestinian-Israeli relations.
"I don't think it's too late, but it's about to be," said Palestinian analyst and former cabinet minister Ghassan Khatib. "Time is our enemy."
Creating a sovereign Palestinian state living at peace alongside Israel has been the centrepiece of international diplomatic efforts for years, but swathes of Jewish settlement dissecting the West Bank have made that goal look increasingly unviable.
Complicating things even more, in 2007, the Islamist Hamas movement seized control of the Gaza Strip, leaving its inhabitants physically cut off from their West Bank brethren and internationally isolated.
Israeli Prime Minister Benjamin Netanyahu's right-wing Likud party dislikes the prospect of Palestinian statehood, but the premier conditionally endorsed the idea for the first time last June.
Many on the Israeli right fear Palestinian sovereignty could allow militant groups to take over the West Bank, while some on the left say that the Israeli occupation that began in the 1967 Middle East war has left Palestinian society too fragmented to form a viable independent state.
Benvenisti envisages some form of federation comprising Israel and the Palestinian territories.
"The only solution that can work in these conditions is powersharing and soft boundaries," he said at a recent briefing. "Meaning not sovereign borders, and the creation of a system of powersharing that would satisfy the ethnic demands of both sides."
To most Israelis, the idea of sharing a state with the Palestinians is a non-starter which would bring either unbearable insecurity or the stigma of undemocratic minority rule.
They see the purpose of the Jewish state as providing an unassailable refuge where Jews depend only on themselves for their security and set both the cultural and political agenda.
With the Palestinian birthrate much higher than that of Jewish Israelis, it is only a matter of time before the Jews would become a minority in a binational state.
It is that which drives the Israeli consensus, in which a Palestinian state which recognises Israel as Jewish is the only acceptable outcome.
"The raison d'etre of the state of Israel is a Jewish state, there is no room (in it) for the other side," says Ron Pundak, an architect of the 1993 Oslo agreement between Israel and the Palestinians.
"I still believe that the two-state solution is a practical solution," he told AFP. "I still believe that we haven't missed the train."
But Pundak has little faith that the fledgling indirect talks will bring Palestinian statehood and an end to the conflict any closer.
"It's an exercise in futility, a waste of time," he said.
Some on the right, including in the Likud, publicly advocate passing control of the West Bank and Gaza Strip back to Jordan and Egypt, which occupied them from 1948 until 1967.
That could defuse the demographic time bomb and relieve Israel of its Palestinian "problem," but Egypt and Jordan seem unlikely to oblige.
Jordan already has a sizeable Palestinian minority and fears that taking in any more could destabilise the Hashemite kingdom.
Egypt has its hands full with home-grown Islamic radicals and is unlikely to cheer at the prospect of absorbing the deeply conservative Gaza Strip with its strong Hamas and Islamic Jihad presence.
Arguing for an Israeli-Palestinian federal state, Benvenisti says the two-state plan can no longer meet the aspirations of what have over the years become separate Palestinian societies.
The West Bank and the Gaza Strip are separated by about 35 kilometres (22 miles) of Israeli territory and Israel maintains draconian restrictions on who may cross.
In east Jerusalem, occupied and annexed by Israel after the 1967 war, 270,000 Palestinians live in a limbo where they are classed as Israeli residents but are not citizens.
They are, however, entitled to Israeli health and welfare services and are wary of giving up what they have for an uncertain future in a Palestinian state.
In addition, there are nearly 1.3 million Palestinians who took Israeli citizenship after Israeli independence in 1948 - known as Arab Israelis - but complain they are treated as second class citizens.
"The Israeli Palestinians have nothing to do with (the two-state plan)," said Benvenisti. "Gazans refuse to be part of this, east Jerusalemites want to stay as they are."