On the seventh day, the Kremlin regretted its gamble: it had provoked the war to improve its regional standing but its Arab client-states ended up being humiliated. The alliance between Israel and France was over, but it is with French fighter jets that Israel annihilated the Egyptian air force.  Whether or not Israel had weighed the nuclear option, that option had been made possible by France too. De Gaulle had warned Israel to hold its horses but, having been ignored, he lashed out at “the Jews” castigating them as “elitist, self-assured and domineering.”

Israel eventually ceded the Sinai Peninsula for a Realpolitik bargain originally concocted by Henry Kissinger. Egypt traded its Soviet alliance for a territory delivered by American arm-twisting on a dependent Israel. To his former Arab partners, Anwar Sadat was a traitor. But the outcome of the Yom Kippur War had convinced him that Sinai would be recovered only through diplomacy and not by force. Hafez al-Assad remained steadfastly loyal to the Soviets, thus guaranteeing Israel’s control of the Golan Heights.

With the West Bank (“Cis-Jordan” as it was called then), things were more complicated. It was the cradle of Jewish history, but it was also densely populated by Arabs. “We like the dowry but not the bride” was Levi Eshkol’s spot-on characterization of Israel’s indecisiveness. Then there was the inter-Arab feud about property rights: King Hussein wanted to recover the territory he had controlled since 1949, but Arafat wanted to “liberate Palestine.” The two clashed bloodily in September 1970. Far from sharing Sadat’s conclusions from the Yom Kippur War, Arafat drew his inspiration from America’s defeat in Vietnam (which also occurred in 1973): if the communist guerillas could defeat the US, couldn’t the PLO defeat Israel?  The brilliant Võ Nguyên Giáp explained to Arafat how to combine guerilla warfare, propaganda, and gradualism. Hence did the PLO adopt its “phased plan” in 1974.

Arafat, however, was a serial mis-calculator. After King Hussein waived his claims over the West Bank in 1988, the Reagan Administration engaged in a dialogue with the PLO (despite Israel’s protests). Yet when Saddam Hussein invaded Kuwait two years later, Arafat threw his weight behind him. The US wrote him off, and Saudi Arabia (which had been threatened by Saddam Hussein) ceased to fund him. Bankrupt and isolated, Arafat helplessly watched from Tunis the collapse of his allies (Iraq and the Soviet Union) and the massive immigration of Soviet Jews to Israel (which temporarily tilted the demographic balance to Israel’s advantage). Israel offered him a Faustian bargain: we’ll rescue you if you accept our terms.  Hence did Arafat sign the Oslo Accords. Edward Said cried foul, accusing Arafat of capitulating.

Said was only partly right, for Arafat’s capitulation was tactical and temporary. He said so himself in Johannesburg on May 24, 1994: Oslo was a mere reenactment of the Hudaybiyyah Treaty signed in 628 a.d. between the Prophet Mohamed and the Quraysh tribe. Signed for lack of better options, the treaty was torn up and the enemy beaten once Mohamed improved his position. By unleashing his Trojan Horse in September 2000, Arafat dealt a fatal blow to the Israeli left and to the prospect of Palestinian statehood. Ariel Sharon knew that Arafat could not be trusted, but he also knew that the status quo was demographically untenable (incidentally, he also realized that his premiership was at risk due to criminal investigations). Hence his decision to implement unilateralism, which in effect renounced both territory and peace for the sake of demography.

Unilateralism, however, soon proved its dreadful limits as Hamas bypassed Israel’s fortification from above (with missiles) and from below (with tunnels).  Israel had hit a Catch-22 dead-end: peace was unreachable, the status-quo untenable, and unilateralism unmanageable. The two-state solution keeps working in theory and failing in practice, but none of its alternatives make sense. Full annexation would turn Israel into a binational state (or a nearly binational one if Gaza were to be excluded from the scheme). As for the annexation of Area C, it would merely entrench the current logistical quagmire with no tangible benefits: Israel controls Area C anyway, and formally annexing it would do nothing to replace the archipelago of some 30 separated Palestinian enclaves.

Eventually, however, Israel will have to choose between annexation and separation. Given that Israel is a success story, a military powerhouse and an economic wonder surrounded by failed states, it certainly has some leeway for calculated risk. The metaphorical iron wall advocated by Jabotinsky in 1923 has been completed beyond anything that Jabotinsky could have imagined. This unprecedented power is welcome and should be cleverly, and carefully, leveraged.