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On a clear day, from a hilltop outside Ramallah, the de facto capital of the Palestinian Authority's quasi-autonomous territory in the West Bank and just about dead centre of all the land controlled by Israel, it is possible to look east and see the mountains of Jordan, another country, then turn around and see the smudged skyline of Tel Aviv and, a little farther on, the ocean.

One sweeping glance captures the boundaries of a conflict that has persisted for 60 years and whose foundations haven't changed. Israel's earliest advocates understood the challenge their dreamed-of homeland would face years before the Zionist project really got under way. Shortly after Theodor Herzl, the founder of political Zionism, published The Jewish State in 1896, two Viennese rabbis decided to travel to the Middle East to explore for themselves Herzl's idea of a home for the Jewish people in Palestine. Their visit resulted in a cable home in which the two rabbis wrote: "The bride is beautiful, but she is married to another man."

Since then, Herzl's dream of a Jewish state has been realized, although he never lived to see it. And Israel's success in its first 60 years has been staggering. It has created a home, and a nation, for Jews from all over the world who often shared little in common other than faith — and sometimes barely that. Hebrew, a once near-dead language, has been revived and is now used to write both poetry and computer programs. Most importantly, Israel has survived surrounded by people and countries that wish it didn't exist and have tried to erase it. And yet, as Israel prepares to celebrate its 60th anniversary, it is its refusal or inability to deal with this most fundamental reality — that Eretz Israel, the Land of Israel, has two suitors, Jews and Palestinian Arabs — that most threatens Israel's future as a Jewish democratic state.

The threat posed to Israel by Palestinians isn't military, or even necessarily violent. Roadside stabbings, suicide bombings, skirmishes, even rockets from Gaza hurt Israel. They will never destroy it. It is also true that Israel faces other serious, even existential, martial perils. Hezbollah, the Lebanese Shia guerrilla army, bloodied Israel two summers ago, and a nuclear-armed Iran would jeopardize its very future.

But Israel is ready to confront both these dangers. The Winograd commission, which examined the country's actions in the war against Hezbollah, has been scathing in its criticism of the Israel Defense Forces. The IDF will draw, and apply, the necessary lessons the next time it faces Hezbollah, which will likely be soon. The Iranian threat is more momentous and grim, but Israel will face it also. Eran Lerman, a former intelligence officer in the IDF, told Maclean's that Israel will not admit it is ready to use force to stop Iran from getting the bomb — in part because it doesn't want to give the international community an excuse to avoid tackling the issue itself. But, he said, Israel is absolutely committed to keeping nuclear weapons from the Iranian regime and will do what is necessary to prevent this from happening. Mark Regev, a spokesman for Israeli Prime Minister Ehud Olmert, confirmed that Israel is unwilling to rely on deterrence — the idea that fear of Iran's own destruction in a retaliatory strike would prevent Tehran from launching nuclear strikes against Israel.

Palestinian Arabs present a challenge to Israel that is at once more straightforward and infinitely more difficult to solve. Within one or two decades, the number of Muslim and Christian Arabs living under Israeli control (including in Gaza, the West Bank and Israel itself) will surpass the number of Israeli Jews. When that happens, if there is still no Palestinian state (and in the absence of large-scale ethnic cleansing), Israelis will be forced to choose between two futures. Their country will either be Jewish, but not democratic — in other words, a Jewish minority will control a land mostly inhabited by Palestinians — or Israel will be democratic, but not Jewish, because Arabs will form the majority in what will become a bi-national state.

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