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The only nuance that I want to introduce is that many Israelis no longer believe there is even a possibility of peace
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I agree with pretty much everything you've said, although I'm not sure about this...
And if it is true, i put it down to being misled. And to the immediate understandable response to the rocketeering campaign.
There is no question that the rocketeering has a psychological toll, even if the reality is that they aren't particularly deadly. I suspect the roads in Israel offer a greater risk than being hit by a rocket.... (That's part of the logical disconnect many people make about many threats. Acts of terror in the west are rare, but the perception is that they are a continuing great risk.)
And certainly terrorists are a risk to Israelis, I'm not discounting that fact. Just that the perceived risk is greater than the actual risk.
Palestinians, indeed all of the Arab world offer no genuine risk to Israel militarily. They can only act out with their rockets and bombs.
The solution to ending rockets and bombs isn't really by striking out at the culprits. I'm, not saying you don't, its just that it won't end it. The end to terrorism will come, when enough Palestinians see a brighter future within a Palestine friends with their neighbor.
Without popular support the terrorists will wither .
What Netanyahu does now, is only a guarantee that the violence continues....
As the dominant player in the region, and the occupiers of Palestine .... Israel has a chance to change things.
I think we agree that Netanyahu cannot see this..... But I wonder why he expects anything different from what he does now? How does he expect Palestinians to react when he declares that more settlements will be built?