A former Israeli intelligence chief says that direct peace talks with the Palestinians are doomed to fail at the moment, so Israel’s leaders need to begin moving unilaterally to a two-state solution.

In an interview with The Washington Times, Ami Ayalon - former head of the Shin Bet, Israel’s FBI equivalent - said that only by separating itself from the 2.5 million Palestinians in the West Bank could Israel remain both a democracy and a Jewish state.

Mr. Ayalon and other prominent Israelis recently launched the “Blue White Future” initiative, which calls for Israel to drop claims to territory east of its West Bank security barrier and impose a freeze on building Jewish settlements there, as well as in Arab neighborhoods in East Jerusalem.

The initiative - named for the colors of Israel’s flag - also calls for the Jewish state to set up a compensation scheme that encourages settlers to move to Israel proper or adjacent settlement blocs.

“The paradigm of direct negotiations that was a cornerstone of the [peace] process during the last 20 years is over,” Mr. Ayalon said. “It does not work, and it will not work unless we change something.”

Under the Blue White Future plan, Jewish settlers would leave voluntarily and military forces would remain pending a final-status deal with the Palestinians, unlike Israel’s withdrawal from the Gaza Strip in 2005.

Mr. Ayalon said these steps would improve Israel’s international image, convince Palestinians that Israel is serious about Palestinian statehood, and encourage settlers to prepare for a future in Israeli territory.

Direct Israeli-Palestinian negotiations have been mostly frozen since December 2008. Talks conducted during former Prime Minister Ehud Olmert’s administration yielded some progress but failed to produce an agreement.

Mr. Ayalon said he and other Blue White Future founders became convinced a deal is impossible in the near future after the subsequent election of the hawkish Benjamin Netanyahu as Israeli premier.

“It was clear that what Ehud Olmert offered was not enough, and it was clear to us that Bibi Netanyhau will offer less,” he said.

This month, Mr. Netanyahu brought the centrist Kadima Party into his governing coalition, diluting the influence of right-wing parties that had argued against far-reaching gestures to the Palestinians, like the 10-month freeze he imposed on West Bank settlements in 2009.

“The new coalition creates a new situation,” Mr. Ayalon said. “There is no danger to [Mr. Netanyahu‘s] political survival. In this coalition, he can pass all details of this plan.”

Mr. Ayalon also challenged the unqualified pessimism of most Israelis regarding the Arab Spring.

He said the region’s democratization brings many risks to Israel but also “many opportunities,” including its moderating impact on Islamist groups like Egypt’s Muslim Brotherhood.

“If you would have asked me three years ago whether I can imagine a scenario where the leadership of the Muslim Brothers would accept the idea of democracy, accept the idea of a constitution which is not the Shariah, I would tell you that you are crazy,” Mr. Ayalon said.

“I don’t want to paint the Middle East in pink and to tell you that we are getting closer to paradise,” he said. “I have been a member of the security community of Israel for 39 years of my life, so I just have to choose whether I analyze and emphasize the opportunities or the risks.”

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