Israel is going to get what it has long sought: permanent control of the West Bank (along with de facto control over Gaza). The Palestinian Authority is increasingly irrelevant and may soon collapse, General Keith Dayton's mission to train reliable and professional Palestinian security forces will end, and Israel will once again have full responsibility for some 5.2 million Palestinian Arabs under its control. And the issue will gradually shift from the creation of a viable Palestinian state -- which was the central idea behind the Oslo process and the subsequent "Road Map" -- to a struggle for civil and political rights within an Israel that controls all of mandate Palestine.I think Walt overlooks the possibility that the Israelis will try to unilaterally solve this problem by creating a de-facto border (as they have in essence done with the security wall) while consolidating its West Bank settlements into defensible pieces - pieces it was likely to keep in any land-swap with the Palestinians. There will be some tension when it comes time to evacuate those settlements that wouldn't fall within the defensible zone, but Israel has already proven a willingness to dislodge settlers in Gaza. Admittedly the West Bank would be a more contentious affair, but what alternative would they have?
The rump of what's left to the Palestinians will, like Gaza, be policed by Israel and ministered to by the United Nations and NGOs. That's clearly not an ideal outcome for either party, but I cannot for the life of me imagine that Israel is going to allow itself to be convulsed with the kind of "civil rights" struggle Walt eludes to.
This is, at root, a power struggle. And Israel has more power. When faced with the kind of scenario Walt describes above, they will either capitulate to American demands for concessions to advance a two state solution, or they will impose a solution that's in their perceived interest if one can't be worked out to their liking at the negotiating table. It's not pretty. But it was never going to be. And America has proven time and again that it cannot bring this situation to a peaceful conclusion.