The Free Muslims Coalition, founded by Kamal Nawash, has reached nearly the same conclusions as ours. Their terminology is somehow different, proposing a "two states in one federal nation" solution, when we are speaking of a "two nations in one supranational federation" solution.
I'll simply copy/paste here their position:
No issue has the same global impact as the Palestinian/Israeli conflict. During the cold war, the United States and the Soviet Union twice raised their security alerts and aggressively challenged each other over this conflict. The oil embargo of the 1970s was inspired by the Palestinian/Israeli conflict. Numerous militants, terrorist groups and governments around the world which seek legitimacy place the Palestinian/Israeli conflict at the forefront of their agenda. And while the Palestinian/Israeli conflict is not the cause of terrorism, solving this conflict may transform the political landscape of the entire Middle East and expose the various agendas of numerous violent groups who leach on this conflict to win the hearts and minds of emotional and unsuspecting people.
Because of the global impact of this conflict, the entire world must do all it can to bring peace between the Palestinians and Israelis. Towards that end the Free Muslims propose the following:
Today there are three solutions to this conflict. The Israelis and Palestinians can kill each other; they can separate by creating two separate nations; or they can create one nation made up of two people. Presently, the only solution being discussed is a two state solution. This solution is based on separating both people into two separate and sovereign nations. While the Free Muslims support any solution that brings final peace to both Israelis and Palestinians, we believe there are serious problems with the two state solution that may not bring long term peace to both people.
During the Clinton administration, the Palestinians and Israelis spent nearly ten years trying to hammer out a deal based on the two state solution. That peace process ended in total failure. Immediately after the failure of that peace process, Israelis and Palestinians blamed each other for the failure; and the rest of the world took side with either the Palestinians or the Israelis.
However, neither the Palestinians nor the Israelis are to blame for the failure of the Clinton era peace talks which were based on the "Oslo agreement." What caused the failure of the peace talks maybe the solution it self rather than the parties. The consequences of creating two separate nations by dividing Israel and Palestine were and still are difficult pills to swallow for both Israelis and Palestinians. It is a fact that both Israelis and Palestinians have religious, historical and emotional attachments to every square inch of the land that includes Israel and Palestine. The sooner the Palestinians and Israelis understand this reality the sooner they can solve their conflict.
From the point of view of many Israelis, the two state solution is difficult because they would have to give up their religious and historical attachments to the West Bank and Gaza which they call Judea and Samaria. Many Israelis simply cannot fathom giving up the West Bank and Gaza and maybe they should not have to. From the point of view of the Palestinians, the two states solution is difficult because they have historical, religious and emotional attachments not only to the West Bank and Gaza but also to Israel which they call the lands of 1948 after the year they lost it to present day Israel. These are the facts and realities that the Palestinians and Israelis have to deal with to solve their conflict.
In light of these facts some may think that a solution to this conflict is impossible. Not true. The Palestinian/Israeli conflict can be solved like any other conflict as long as the parties think outside the box and as long as no one uses violence or terrorism to effect political change.
In light of the attachments that both parties have for the same territory, the solution is not in separating but in coming closer together. Many Israelis and Palestinians seem to agree that the land they call Israel/Palestine is indivisible. Thus, the solution lies in keeping the land that Israelis and Palestinians call home as one nation while at the same time providing each side with the security and the individuality the parties would have if they had their own separate nations.
What is being proposed here is a Two State-One Nation solution based on equality, freedom and civil rights for both Israelis and Palestinians. The idea behind this solution is that there will be two sovereign states similar to New York and New Jersey that together make one nation similar to the United States of America. However, rather than being a federation it would be a confederation. The main difference between a federation and a confederation is that the states in a confederacy have much more sovereignty than in a federation.
What is being proposed here is not entirely new. What is new about the two state-one nation solution is that it achieves the benefits of being one united nation while reserving for both Israelis and Palestinians the security and independence of being two separate nations.
To illustrate this point further, note that after occupying the West Bank and Gaza in 1967, Israel could have annexed and integrated those territories into Israel by providing the Palestinians with Israeli citizenship. However, Israel did not do this and instead chose to treat the West Bank and Gaza as if they were part of Israel physically without providing the Palestinians in those territories with citizenship, political rights or civilian rule. Among the reasons Israel did not integrate the Palestinians of the West Bank and Gaza into Israel is because Israelis were afraid of a demographic problem. The Israelis feared that if they gave the Palestinians equality, political and civil rights that the Palestinians may one day out number the Israelis and vote Israel out of existence. While we understand this concern by Israelis, those Israelis who fear giving the Palestinians equality and civil rights assume that they cannot give the Palestinians equality and at the same time have a Jewish state. This is a false assumption. The territory that includes Israel and Palestine can be one nation where the Palestinians have equality, political and civil rights and at the same time be a safe heaven for Jews from all over the world.
This can be done by creating a confederation of two states united by a federal type government with limited powers. The country can be called the United States of Israel and Palestine. While both states should have the right to limit immigration and migration within their borders, the principles of the nation should be based on the free movement of labor and people. To the extent that Israelis move to Palestine and Palestinians to Israel, we can avoid the demographic consequences of the migration by having their votes count in their respective state regardless of where they live. This approach will totally avoid the demographic fear that Israelis have by making certain that migration of people does not dilute the political power of Jews or Palestinians in their local and state politics.
As to the national government, Israel and Palestine shall each contribute 50% to the national parliament regardless of their populations. With this solution, the Israelis do not have to fear political dilution from potential demographic changes and the Palestinians do not have to fear political dilution from the Israelis.
As to the President or Prime Minister of the national government of the United States of Israel and Palestine, they should be elected by the national parliament. Being that the parliament is divided 50/50 no Palestinian or Israeli can win without support from parliamentarians of the other side. This will guarantee that no Palestinian or Israeli extremist can become president of the United States of Israel and Palestine.
Initially, the national government should have limited powers similar to the United States government in the early days of the Union. As time progresses and both Israelis and Palestinians feel more comfortable with each other, they may chose to give the confederation more authority. In essence the early days of the national government of the United States of Israel and Palestine should resemble an entity more like the European Union than the U.S. federal government.
On economic matters, Israel and Palestine shall act as one nation with no exception. They shall have the same currency, no tariffs and complete free trade. The early days of the national government or confederation shall be to bring jobs and economic prosperity to both Israelis and Palestinians. This should be an easy task. A peaceful Israel and Palestine acting as one nation would be a gold mine the likes of which the world has never seen. A nation that is the birth place of western civilization and immensely revered by Jews, Christians and Muslims, religious tourism alone will guarantee a healthy economy in perpetuity.
However, the economy will have more than tourism to secure its prosperity. A nation of Palestinians and Israelis at peace with their neighbors shall have unlimited opportunities. The technical know-how of Israel, the available capital in the Arab world and a geography that is at the intersection of three continents can produce an economic power house that is second to none on a per capita basis. Moreover, a peaceful nation made up of Palestine and Israel at peace with their neighbors will not only bring economic prosperity to that nation but also to the entire Middle East.
This solution may not be perfect. However, this proposed solution may be the only solution that will give the Palestinians and Israelis most of what they want while at the same time allows both people to keep their individual identity and live as one nation. Moreover, with this solution, Jerusalem becomes a non-issue and borders become less relevant. This solution will basically take Israelis and Palestinians back to the time before the first intifada (uprising) began in 1987 with the only difference being that the Palestinians will have rights and equality that they never had under the occupation. As proof that this solution can work is the fact that Israel has one million Palestinians with Israeli citizenship and they are not demonstrating, throwing rocks or blowing themselves up. Why is this? The only difference between Palestinians who are citizens of Israel and Palestinians in the West Bank and Gaza is that one group has freedom, political and civil rights while the other has nothing. Israel did not recognize the Palestinians of the West Bank and Gaza as citizens. They were put under military rule, and they were segregated in everyway.
To summarize, the Free Muslims are asking the Palestinians to reach out to their Israeli and Jewish partners and say the following:
"We understand why the state of Israel is important to you. We are fully aware of the persecution that Jews suffered throughout history and the necessity of having a safe heaven for Jews. We also understand that Jews have historical and religious ties to Israel/Palestine. We believe that every Jew shall have the right to move to Israel and become a citizen immediately. We also welcome Jews to visit and to reside in the West Bank and Gaza. We want the Palestinians and Israelis to live together as neighbors, friends and countrymen. In return, what we want is freedom, liberty and equality for the Palestinians. Will you meet us half way?"
The Free Muslims are also asking Israelis and Jews to reach out to their Palestinians Partners and say the following:
"We understand why Palestine is important to you. We are fully aware of the suffering the Palestinians have experience over the last 100 years and the necessity of having a safe heaven for Palestinians. We also understand that Palestinians have historical and religious ties to Israel/Palestine. We believe that every Palestinian shall have the right to move to Palestine and become a citizen immediately. We also welcome the Palestinians to visit and to reside in Israel. We want the Palestinians and Israelis to live together as neighbors, friends and countrymen. In return, what we want is permanent security, liberty, equality and the total freedom to be Jews. Will you meet us half way?"