Commentators in Israel and elsewhere have noted the two major trends to emerge from the recent Israeli elections, namely the collapse of the Labour party and the left bloc, and the rise of the extreme right. But there is a more significant development. The Israeli assault on Gaza and the vehement opposition from the Palestinian citizens of Israel to it brought to the fore the tension inherent in the Zionist tenet of a state that is both Jewish and democratic.

The significance of these trends has been only partly noted. For example, the editors of the Israeli newspaper Haaretz wrote: "Israel's democracy is breaking daily records of degradation. The large parties, failing to win broad public support, are wooing a politician who conducted a racist campaign against the state's Arab citizens and is suspected of grave criminal acts."

This is unfair to Avigdor Lieberman, who rose to prominence with an anti-Arab discourse and now heads the third largest group in parliament, after Kadima and the Likud. To place all the blame for the "degradation" in Israel's democracy only on Liberman's shoulders ignores the profound similarities between Lieberman's ideology and that of the larger parties, including Labour, which viewed itself as leftist, and Kadima, which advertises itself as centrist.

All of them, Lieberman's Yisrael Beitenu Party (Israel our Home), Kadima and Labour share an ultimate and traditional Zionist goal, that is to acquire as much land as possible with as few Arabs as possible. They all support in theory the two-state solution but are dragging their feet while feverishly accelerating the pace of construction of colonies to acquire as much land as possible.

Lieberman, however, is consistent. He says openly what the leaders from the centre and from the left do not dare say publicly. A Jewish state, founded on the basic tenets of Zionism cannot forever ignore the tension between being Jewish and being a democracy.

Lieberman's solution is to emphasise the Jewishness of the state to the detriment of democracy. He advocates stripping the Palestinian citizens of Israel of their citizenship and confining them to the lower status of residents, subject to a test of loyalty to the state of Israel. Ultimately, he argues, the best solution is to transfer them to a Palestinian state in exchange for land occupied by Israeli colonists.

As recently as last month, the Israeli government announced a massive increase in West Bank colonies by declaring some 1,700 dunams (1.7 million square metres) in northern Efrat state land.

Confiscation of land, violation of human rights and the oppression of occupation led former US president Jimmy Carter to compare the occupation to Apartheid. But he defended Israel as a democracy, probably because he is unaware of the nature of its Zionist foundation and the contradictions it created.

Theodor Herzl, the father of political Zionism, envisioned a state that would resolve the tension of a "state that would be both Jewish and democratic; both a Jewish nation state and a state of all its citizens." But he was writing a utopian novel.

This tension between democracy and a state that is not the state of all its citizens led some prominent figures to advocate the establishment of one secular and democratic bi-national state.

Judah Magnes, president of the Hebrew University, was the leading Zionist proponent of such a solution in the 1940s. Along with the philosopher Martin Buber, they put their case in Palestine - Divided or United? The Case for a Bi-National Palestine before the United Nations.

Recently, Israeli politician and writer Meron Benvenisti argued that a bi-national state was only a matter of time. On the Palestinian side the late Yasser Arafat called, in the 1970s for the establishment of a secular and democratic state in all of Palestine - a position dismissed by the Israelis as tantamount to dismantling Zionism. The late Palestinian-American intellectual Edward Said argued that real peace could only come with the establishment of a bi-national Israeli-Palestinian state. Sari Nusseibeh, president of Al Quds University in Occupied Jerusalem, contended that a bi-national state was inevitable.

As recently as last year, Ahmad Qorei, chief Palestinian negotiator, in despair at the moribund peace process, warned that in the absence of a two-state solution, the Palestinians would press for annexation by Israel and demand equal rights in a bi-national state.

But it is precisely to vitiate such a demand and avoid the so-called demographic time bomb of a Palestinian population growing at a much faster rate than the Jewish population that Israeli leaders have not annexed the West Bank and Gaza.

The tension that erupted between Palestinian citizens of Israel and their government during the Israeli assault on Gaza was explosive. Lieberman's exploitation of that tension resonated with many Israelis. It also brought to the fore the latent and more fundamental tension in the basic Zionist tenet of a Jewish and democratic state that is not the state of all its citizens. It also put to rest the idealistic vision of one secular and democratic bi-national state.