Israel has gradually come to realize that the Palestinians are neither a partner for peace nor capable of establishing a viable state. Therefore, Israel's recent governments have adopted a de facto conflict-management approach, rather than a conflict-resolution strategy. This prompts several questions. Should Israel speak explicitly about the dim prospects of a two-state solution, or play along with the illusory preferences and pretensions of the international community? Should Israel apply more “stick” than “carrot” to the hostile Palestinian Authority? Would the collapse of the Palestinian Authority serve Israel's interests? And how diplomatically active should Israel be on the Palestinian issue?