The future of the West Bank and Gaza remains the single most crucial issue in the search for peace in the Middle East. Examining the entire range of possible outcomes, Mark Heller of the Center for Strategic Studies, Tel-Aviv University, argues that an independent Palestinian state in those territories, even one dominated by the PLO, could, under certain stringent conditions, be the preferred option for Israel. In the first comprehensive treatment of the political, social, economic, and military factors bearing on the disposition of the West Bank and Gaza, Mark Heller sets forth the possible alternatives--annexation by Israel, perpetuation of the status quo, federal or communal arrangements, and territorial compromise within the framework of the Jordanian option--and evaluates their implications for Israeli security. Heller outlines the conditions under which he believes the establishment of a Palestinian state could be the optimal solution. He also discusses the economic prospects of a Palestinian state and the future of Jerusalem. His analysis is the boldest attempt yet to come to grips with the Palestinian question and the future of Israel. No one interested in the pursuit of a peaceful settlement of the Israeli-Arab conflict can afford to ignore this book.