Peter Beaumont: Babies Who Threaten to Topple Israel

Avraham Burg, former Speaker of the Israeli parliament, has been stirring up trouble. In August, he charged Israel with having failed in its historic mission to be a 'light unto nations' through its belligerence. He was promptly accused of encouraging 'the Jew hatred sweeping all of Europe'.

A few weeks ago, Burg was at it again, articulating the nightmare all Israelis fear: 'Between the Jordan [River] and the Mediterranean, somewhere between next year and two years' time, there will be born the first Palestinian ... of the Palestinian majority,' - the generation of Arabs who will outnumber Israelis.

Now figures released last week show that immigration - to a country beset by violence and a faltering economy - has collapsed to its lowest level in 15 years, dramatically cutting the population growth.

This is the Achilles heel of the security policies of Ariel Sharon and his Likud-led government. In three years, immigration has fallen by half, despite Sharon's avowed aim to attract a million immigrants in the next decade. According to Israel's state statistics office, the population is now 6.75 million - 81 per cent Jewish and 'other' nationalities' and 19 per cent Arab.

Crucially, however, the figures show that despite financial incentives for couples who have more children, the population rose last year by 116,000, or 1.7 per cent - its lowest increase since 1990.

In the Nineties, annual immigration ranged from 70,000 to 200,000 as around a million Jews from the former Soviet Union - many of them more loosely defined as Jewish than some religious authorities would prefer - flocked to Israel.

At the heart of all this is simple mathematics. Forecasts from the United States' Population Reference Bureau show Israel's population doubling in 45 years, that of the West Bank in 21 years and that of Gaza in 15 years. In other words, Palestinians in the West Bank, Gaza and East Jerusalem, and Israeli Arabs will outnumber the Jewish population by 2020.

This has led commentators such as David Landau, editor of the English-language edition of the newspaper Ha'aretz, to warn of a 'cataclysmic' demographic challenge if Israel is to retain its identity as a Jewish democratic state.

Landau told a symposium in San Francisco that he feared Palestinians would abandon calls for a two-state solution and insist on equal voting rights within a wider Israel - which would end the Zionist dream.

The growing sense of panic among Israelis over the demographic time bomb underscores the bitter divisions that are increasingly emerging in Israeli society.

Of all the cases for the future of Israel and the Occupied Territories, the argument of the hardliners that Jews should govern the entire 'historic' land of Israel is the one that would bring the moment of crisis closest.

An alternative would be a policy of expulsion or transfer of population that even many hardliners who advocate it realise would make Israel an international pariah.

This same logic would undermine any attempt to remain in the Occupied Territories. For without expulsion Israel is faced with the choice of delivering political rights to the burgeoning population or practising a form of political apartheid.

It is this calculation, as much as security, that is driving the construction of Sharon's wall and his threats of a unilateral separation within it.

Without massive immigration, Israel's survival in the way it was envisaged by its founders must rely ultimately on a two-state solution. For all its military might, it is the birth rate that is wounding Israel.