Settlement of the land was at the heart of the Zionist enterprise from its start in the 1880s. New settlements enabled the "New Jew" to reforge a bond with the ancestral soil and to mark out the territory of the Jewish state-to-be. The settlement clusters more or less defined the contours of the Jewish state that emerged in 1948.

Then came the June 1967 Six-Day War and Israel's conquest of the West Bank and East Jerusalem (and the Golan Heights, Gaza Strip and the Sinai Peninsula). The Arabs, humiliated and outraged by their new defeat, refused to make peace (the "Three Nos" of Khartoum) and the Jews were faced, as they saw it, with a vacuum, a vacuum that politics abhors.

The leaders, Labour Party men, wanted to secure the West Bank high ground and the Jordan Valley, to assure Israel's future security. But the right-wing Messianists spawned by the miraculous victory wanted more, far more, and soon coerced the government, by hook and by crook, into planting settlements in the West Bank's hilly spine, to assure perpetual Jewish sovereignty over the historic, God-given patrimony. And some Cabinet ministers (Moshe Dayan, Israel Galili, and to an extent Yigal Allon and Golda Meir) were seduced or willingly coerced, themselves keenly aware that the West Bank was biblical Judea and Samaria, the crucible of Jewish nationhood, religion and culture. It belonged to Jews—and should not be given back to hostile Gentiles—much as Americans would never willingly cede Philadelphia to strangers.

But the paradox is that incorporating the historic Jewish heartland means incorporating millions of additional Arabs—meaning that the Jewish state will in short or long order cease to be Jewish and become an Arab-majority state. Which is why most Israelis, not just left-wingers, are willing to give up the West Bank—as they very willingly gave up and evacuated the Gaza Strip in 2005.

But the Palestinian leadership prefers that the Israelis remain pinioned on the horns of this dilemma, neither able to digest nor vomit the West Bank. Which is why Abbas and company, like Arafat before them, has consistently avoided accepting a "two-states-for-two-peoples" solution. Why allow the Israelis to get out of the West Bank? Why agree to a small Palestinian Arab state alongside a Jewish state when, over time, the Jewishness of Israel will be trumped by Arab birthrates (the high birthrates of Israel's own Arab citizenry and of the Arabs in the territories) and, as they persist in demanding, a refugee return?

Stupidly, Netanyahu and company have decided to stand and fight over the wrong issue. The West, including many favorably inclined to Israel and its continued welfare, oppose Israeli cooption of the West Bank and, hence, oppose Israeli settlements in most of the territory, and demand a settlement freeze while Israeli-Palestinian talks proceed. President Obama may have made a severe tactical error at the start of his administration when he demanded a blanket settlement freeze. But once that demand was tabled, and the Palestinian leadership latched on to it (why not? It was a win-win situation for them), a settlement freeze was unavoidable.

Netanyahu, subduing his right-wing coalition partners, should have accepted a settlement freeze and postponed the inevitable crisis in the negotiations until the refugee issue was encountered, like a North Atlantic iceberg. Then, with the Palestinians, backed by the ever-zealous Arab states, demanding Israeli acceptance of the "Right of Return," the West—certainly the US—would have backed Netanyahu and chastized the Palestinians for unreasonableness. After all, one can’t both espouse a two-states-for-two-peoples solution and the mechanism for its subversion, a Palestinian refugee return to Israel. A refugee return means Israel's demise. Abbas understands that—which is why he demands it; Obama understands that—which is why, like President Clinton before him, he will oppose it. That is where Netanyahu (and Barak) should have made their stand. Instead, we now have an Israeli-American rift and bad blood, and rejoicing Palestinians. They are now, they believe, one more inch closer to getting what they want, which is all of Palestine.