The reason of course is demographics. peace with arabs may accelerate the decline in jewish population and promote arab migrant workers coming into Israeli cities. the status quo will be maintained only as long as American economic and military support continues. But US is in long term economic decline, so at some stage the aid to Israel and Egypt will decline and fortress Israel will become unsustainable. so the probable future is a small country which accepts economic decline in order to protect its ethnic identity, which will of course discourage jewish immigration to Israel. there may even be a net exodus from the country.
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