For a decade the Labor Party had a solution to Israel's biggest problem: land for peace. It would give back much of the land conquered in the 1967 war and get a peace agreement in return. But the assumption that underlay it -- that you could make a deal with Arafat -- is now exploding. As a result, Israel has few doves left; in a poll taken before yesterday's suicide bombing, some 70 percent of the population supported Ariel Sharon's tough strategy of reprisals and preemptive attacks.

But once you get past the rhetoric, it becomes clear that the Israeli right has no solutions either. The right in Israel held three core positions: first, that there could never be a Palestinian state (Jordan was the true Palestinian state). Second, that Arafat and the PLO were not legitimate representatives of the Palestinian people and could never be negotiating partners. And, finally, that the Jewish settlements in Gaza and on the West Bank would expand indefinitely. Palestinians in these areas might gain autonomy but never independence. Remember these mantras? Virtually no Likud politician -- not Bibi Netanyahu, not Ariel Sharon -- espouses them today.

Sharon has a solution -- counterterrorism -- to address the crisis of the moment. But this is a tactic, not a strategy. What next? Some speak of a "big bang": reoccupying Gaza and the West Bank. But do Israelis really want to rule, day to day, more than 3 million seething Palestinians? It would make their current tensions seem trivial.

Sharon offers, in effect, the status quo, with the hope of reduced violence. The current approach assumes that eventually the Palestinians will crack, that time is on Israel's side. It isn't.

Two weeks ago one of Israel's leading demographers, Arnon Sofer of Haifa University, published a monograph that has received much attention in Israel. Sofer predicts that by 2020 the area comprising Israel and the occupied territories will be 58 percent Arab. For Israel, the Palestinian problem is going to get more difficult with each passing year. Arafat well understands this, which is why he has often said that his strongest weapon is "the womb of the Arab woman."

Sofer embraces a solution that is increasingly being discussed in Israel: unilateral separation. It has the support, most prominently, of Ehud Barak but also of several other senior Israeli politicians, on both the right and the left. Sofer told me that he has briefed Sharon on the topic several times, most recently two weeks ago. The prime minister asked whether he could keep Sofer's maps.

Unilateral separation would mean walls. Israel would finally define its borders. The Palestinian Authority would get most of the West Bank and Gaza and could declare an independent state. Israel would have relations with it, but in the guarded way it does with its other Arab neighbors.

Obviously such a solution has technical problems -- what to do about Jerusalem? -- but the real obstacle is that it has political costs. For Sharon, it means that the dream of "Greater Israel" is dead. Drawing defensible borders for Israel would require that about 30,000 Jewish settlers in the West Bank move. For Shimon Peres and many Laborites, separation accepts the idea that peace will remain a tense, armed truce, not a genuine reconciliation built on economic interdependence. No new Middle Eastern order.

"It's a counsel of despair," admits Shlomo Avineri, a distinguished Israeli academic who was one of the first to float the idea. "But the current situation is awful. We remain in a neocolonial relationship with the Palestinians, which forces us to do things that are incompatible with being a democracy. It coarsens Israeli life, making us all racists. Every time we see an Arab, we assume he's a terrorist. And it is utterly demeaning for the Palestinians, who are lined up and searched like cattle every day. We need to get out of each other's hair."

Separation would also address the real danger to Israel's democracy: its relationship with its Arab citizens. Israel's biggest problem is actually not the Arabs in the occupied territories. It is the 1.2 million Arabs within Israel. Having been treated as third-class citizens for decades -- they face discrimination in housing, employment, health care and education -- they bear a deep grudge against the Israeli state. But until recently they were reasonably loyal Israeli citizens. Over the past few years the intifada and Israel's response to it have radicalized them on behalf of the Palestinian cause. And by Sofer's calculations, they will constitute 32 percent of Israel in 2020, most of them of voting age.

Separation would help cut the cord between Israeli Arabs and the Palestinian cause. One of their chief reasons for radicalization would end: Israel would no longer be occupying Arabs against their will. The other -- their miserable treatment -- is also something that the Israeli government should end. It may not be enough, but Israel cannot afford to do less, morally or politically.

If Israel cannot produce normality in its own Arab population, whatever it does with the Palestinians will be irrelevant. It will find itself having to choose between being Jewish and being a democracy. This is the real time bomb ticking within the borders of Israel.