It was a blow, in the sense that they failed to frighten off the government, and it was proven that it could be done. They are also facing a deep theological crisis, because their rabbinical leadership made very messianic and irresponsible promises about how it would not happen and were proven wrong. They've had a really lethal clash with reality.
They must move from a psychological state of victimization to a psychological state of accepting responsibility. The Palestinians must leave behind their revolutionary adolescence and demonstrate that they have reached political maturity.
The project of dividing the land is going to be Israel's central national enterprise in the coming decade. It will determine whether we have a future here. It will determine whether we will live or die.
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