In a nutshell, what I propose is that Palestinians in the so-called West Bank and Gaza Strip be given Israeli citizenship, but without the voting rights that regular Israeli citizens enjoy. Instead, the Palestinians will have their own government, very much like the Palestinian Authority of today. Since they will not have voting rights like other Israelis, however, they will not pay the same taxes that regular Israeli citizens do. Rather, they will pay all or at least the majority of their taxes to their own autonomous Palestinian government. This is the situation that currently exists between the United States and Puerto Rico. Puerto Ricans are American citizens, but have no elected representatives with voting rights in the U.S. government. Hence, they do not pay many of the federal taxes that other Americans have to pay and the bulk of their tax dollars go to the government of what is known as the Commonwealth of Puerto Rico, which is responsible for governing all internal affairs of the U.S. unincorporated territory.
To be more succinct, all the territory from Jordan River to the Mediterranean Sea will be one country known as the State of Israel, but Palestinians in the West Bank and Gaza Strip will govern their own internal affairs. The Israeli government will remain responsible for the external borders, customs, defense and monetary policy. The rest will be responsibility of the Palestinian government.
Borders, Immigration and "Settlements"
Under the plan that I envision, the Israeli government will be in charge of all external borders, including maritime borders. In other words, Israelis will determine who gets in and out of the country, including the autonomous region of Palestine. This will guarantee that people and goods dedicated to destruction of Israel do not enter its territory by using Palestine as a gateway.
The borders of the autonomous region of Palestine itself will consist of the entire Gaza Strip and most of the so-called West Bank. The borders will exclude the large Israeli communities inside of Judea and Samaria, which the international community and most of the media like to call the major "settlement blocs". These will be annexed to Israel proper. Palestinians that reside within these annexed territories will be given Israeli citizenship with full voting rights, in contrast to their countrymen in the new autonomous region of Palestine who will not have the right to vote in Israeli elections. Israeli communities not located in the major "settlement blocs" will remain under full Israeli sovereignty as enclaves within what becomes Palestine, but will not be able to expand their communities outside of borders mutually agreed upon by representatives of Israel and the Palestinians prior to implementation of this peace plan, unless the Palestinian government authorizes such expansion.
No Israelis will be allowed to work or reside in the autonomous territory without the consent of the Palestinian government. At the same time, no one will be able to enter Israel proper from Palestine without the consent of the Israeli government. Palestinian refugees will be allowed to reside in the new autonomous region and will be given the same type of Israeli citizenship as Palestinians of the region, allowing them to vote in Palestinian elections but not in Israeli elections. The Palestinian government will determine what constitutes a Palestinian refugee, but the Israeli government will reserve the right to refuse entry to any refugee that it considers a threat to its security. This arrangement will effectively ensure that Israel proper remains Jewish while the autonomous region of Palestine remains Palestinian.
Jerusalem will remain the capital of Israel in accordance with Israel's Basic Law: Jerusalem, which means that the Old City and the Israeli communities built in parts of the city after the 1967 war will not be part of the future autonomous region of Palestine. However, this does not discount the possibility of including some of Jerusalem's Arab neighborhoods or its Arab suburbs as part of the future Palestinian capital, to be known as Al-Quds. This is hardly a new idea. In fact, a similar arrangement was discussed during the failed Camp David summit in the year 2000.
Israel as Guarantor of Palestinian Democracy
I stated above that my plan envisions Palestinians running their own affairs with the exception of borders, external security and monetary policy over which Israel would maintain control. I also believe, however, that inasmuch as the Palestinians should have the right to govern themselves, Israel should have the responsibility of guaranteeing Palestine's nascent democracy so that events like the Hamas takeover of Gaza from the Palestinian Authority in 2007 do not happen again. I believe that only with Israel's help will the Palestinians be able to establish a strong, genuine democracy. Without Israeli supervision, any Palestinian-controlled entity, whether an independent state or not, will undoubtedly become a bastion of dictatorship, tyranny and terrorism.