Twenty years after the Madrid Peace conference, and 10 years after President Bill Clinton’s heroic efforts at Camp David failed to yield a settlement between Israelis and Palestinians, one cannot escape the conclusion that the Israeli-Palestinian peace process has become one of the most spectacular deceptions in modern diplomatic history.

The process fell victim to the parties’ inability to bridge the gap between what was politically feasible for them and what was required for a settlement. Trapped between the possible and the necessary, Israelis and Palestinians simply learned to live without a solution.

However obsessed international opinion may be with Gaza’s agony, to most Israelis the Palestinian “problem” seems to be happening on the dark side of the moon. The wall or fence in the West Bank and former Prime Minister Ariel Sharon’s disengagement from Gaza have practically done away with daily friction between Jews an Arabs. Absorbed by their booming economy, reassured by President Barack Obama’s recent commitment never to let Israel down, and convinced of their success in defeating Palestinian terrorism in the West Bank and deterring Hamas from venturing into another war, Israelis have lost any sense of urgency concerning the Palestinian problem.

Israelis also find satisfaction in the relative prosperity of the West Bank, where order and stability are being secured by well-trained security forces, in line with Palestinian Prime Minister’s Salam Fayyad’s meticulous bottom-up construction of Palestinian statehood. Moreover, massive inflows of international aid make Israel’s occupation one of the most convenient in world history; the Israelis control the land and its population without having to bear the financial burden of direct rule.

It is as if Moshe Dayan’s old existential political philosophy is being brought back to life. When asked in November 1970 to spell out his views of a possible peace deal with the Palestinians, Dayan’s answer was one that could easily be endorsed by most of the ministers in Netanyahu’s government. Dayan said: “The only peace negotiations are those where we settle the land and we build, and we settle, and from time to time we go to war.”

With peace plans and envoys coming and going, Israelis and Palestinians alike have finally become blasé about the chances of a final settlement. The two-state solution is rapidly losing its appeal.

For, if a two-state solution really is the future, a social and political earthquake of untold dimensions awaits Israelis: a massive evacuation of settlers and a desperate need for a difficult political realignment to deal with the threat of civil strife and perhaps even military disobedience. All this in order to go back to the 1967 borders, for which few Israelis feel nostalgic.

As for the Palestinians, the gap between the colossal tragedy of the Nakbah (the disastrous 1948 war) and the poverty of a territorial solution that sandwiches their demilitarized mini-state between Israel and Jordan – neither suffering from excessive love for Palestinian statehood – is bound to remain an open wound. And Palestinians would view any solution to the refugee problem that Israel might accept as a betrayal of the ethos of Palestinian nationalism, namely the “right of return.” The state of Palestine would lack legitimacy among Palestinians themselves.

True, Hamas has been indicating recently a readiness to contemplate a solution based on the 1967 borders, but it is doubtful that its leaders and members could live with the betrayal of the refugees. Then again, the idea of Palestinian statehood is not central to Hamas’ worldview, in which the strategic objective is the ultimate victory of Islam. For Hamas, Palestinian President Mahmoud Abbas is a “transitional figure,” to be swept away together with his secular PLO in the revolutionary drive to an Islamic society.

It is the resulting sense of paralysis that explains the proliferation of new political paradigms in both Israel and Jordan. Jordanians of the caliber of Former Prime Ministers Abdel-Salam al-Majali and Taher al-Masri, as well as a former adviser of King Hussein, Adnan Abu-Odeh, have been advancing schemes for a Jordanian-Palestinian solution. Their argument is essentially that the troubles of the peace process stem from its deviation from the original intention of the architects of the Madrid peace conference, where a Jordanian-Palestinian delegation sat representing the two peoples.

Conspicuously, notable figures on the Israeli right – among them the former defense and foreign minister, Moshe Arens, a political mentor of Netanyahu, and Knesset Speaker Rubi Rivlin – mirror the Jordanian position. Whereas the latter champion the concept of one political space that would include the two banks of the Jordan River, the Israelis respond with their own concept of one political space between the Mediterranean and the Jordan River. Never truly convinced of the viability of the two-state solution, and encouraged by the failure of the peace process so far, the Israeli right is going back to toying with the most dangerous scenario of all, the binational state.

As always, they want the best of all worlds: an emphatically Jewish state in which Palestinians would have citizenship rights, but no national rights whatsoever. That is not a bad formula for a state of permanent civil war.

Trapped in their contradictions and zero-sum national dreams, Israelis and Palestinians cannot expect a perfect solution. Their task is to embrace the least imperfect solution before they decline into Doomsday scenarios, such as a hostile Israeli unilateral disengagement or a one-state reality of unending conflict.