Israeli Prime Minister Benjamin Netanyahu is contemplating an important policy change on the Palestinian issue. From his 2009 Bar Ilan speech to the peace talks led by US Secretary of State John Kerry, the leader of the Israeli right has supported a two-state solution. The revisionist Zionist leader Zeev Jabotinsky surely turned in his grave, while Netanyahu's ideological partners in the Likud could hardly believe their ears. The US administration, not to mention the Palestinians, was also initially suspicious of his intensions.

Yet during recent secret talks with Kerry, Netanyahu showed surprising flexibility on the issue of the borders of a future Palestinian state. According to senior sources at the State Department, the Likud leader agreed that the borders would be based on the 1967 lines, with mutually agreed land swaps. Netanyahu indeed sought progress toward a two-state solution, although with unrealistic conditions in regard to the size of the settlement blocs and on the future of Jerusalem.

Officials who have the prime minister's ear today, however, speak of the two-state solution approach in the past tense. Netanyahu will, according to them, talk of a two-state solution at most as lip service to his more moderate coalition partners and in his shaky dialogue with Washington. The prime minister is expected to resume his focus on a defensive policy argument, presenting a dangerous "Hamas-stan" both in the Gaza Strip and in the West Bank. He will also ask the international community for a gradual demilitarization of Gaza and make the case for "Israel-only" supervision of the future demilitarization of the West Bank, which for all intents and purposes means the continuation of the occupation. Settlements will be expanded with less fanfare and more vigor.

Senior sources in the Likud close to the settler movement claim that they are developing concrete plans for the alternative to a two-state solution. Palestinian citizens will have citizenship in an autonomous Palestinian area, which will comprise 40-50% of the West Bank. Only 50,000 Palestinians living today in Area C will be offered Israeli citizenship. Israel, according to these right-wing political circles, will assist Palestinian autonomy to develop economically in what is called "economic peace." The prime minister is aware of these plans, yet in typical fashion, he will not adhere to them or to the two-state solution.