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In Israel proper the fertility rates are converging.

Ironically, that's a problem too. It's mainly due to the high birthrate of the ultra-Orthodox, most of whom do not work.

The fertility rate in Gaza is much higher.

Which is one reason why Sharon shut down the settlement project in Gaza. The idea of ever absorbing Gaza into Israel was insane-squared.

The end game now probably looks something like this: A tiny Palestinian "statelet" in Gaza, if they ever come to their senses and stop shelling Israel. Palestinian "bantustans" (or whatever the Hebrew and Arab words are for bantustans) scattered across the West Bank, more or less surrounded by Jews-only Israeli settlements. The Israelis will maintain overall political control by granting Palestinian cities, towns and villages some degree of local autonomy without giving them equal political rights within the state.

Clearly a one-state solution is the only viable and ethical solution.

But it is politically impossible.
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