Just over a week ago – two days before the discovery of the bodies of the three abducted Israeli teenagers and four days before the abduction and revenge killing of Muhammed Abu Khdeir — I sat in the family quarters of a young Palestinian shop owner in Jersusalem’s Old City sipping mint tea with two colleagues.  We met the young shop owner and his two cousins while bargaining over some textiles in the Muslim quarter of the Old City.  At the conclusion of the sale, they thanked us for a rigorous negotiation and invited us to their family quarters where they had a museum style display of textiles, rugs, and other artifacts that their family had collected in their 150+ years as shop owners in the Old City bazaar.

As we sat drinking our tea, we asked the young men about the political situation.

We had just spent the prior week meeting with Israeli and Palestinian officials in Jerusalem and Ramallah.  The gist of our conversations with Israeli officials was a general sense that the two-state solution was dying and that the status quo – continued occupation, limited and relatively stable Palestinian Authority (PA) governance in the West Bank, and gradual expansion of settlements – was both acceptable and sustainable.

Officially, the Israeli government is still committed to the two-state solution, but for all practical purposes, Netanyahu and the right wing have largely abandoned it.  With the continual expansion of settlements, it becomes harder and harder every day to imagine that any future Israeli government will be willing to drive anywhere from 100k to nearly a quarter of a million settlers out of the West Bank – even if the Palestinians accept territorial exchange for blocks of settlements. As of last week, the most immediate task for Netanyahu to preserve the status quo was to break the Palestinian unity government between the PA and Hamas that developed last month following the collapse of Kerry’s peace talks earlier this spring.  The IDF response in Hebron and elsewhere in the search for the missing teens was designed to find the boys and to wedge the PA from Hamas.

More broadly, prior to the escalation of violence in the last six days, life for most Israelis has been pretty easy.  The security situation has been relatively calm.  And, even though the entire Middle East is in turmoil, there is some sense that this has actually been to some benefit to Israel. Hezbollah and Iran both have their hands full in Lebanon and Syria with the recent actions of ISIS and other Sunni extremists.  The economy is doing well.  Indeed, a common lament up until the last few days in Tel Aviv is that the hardest thing about life there is getting a reservation at any one of the dozens of new upscale restaurants.

We also met with Dani Dayan, a leading figure in the settler movement.   A few weeks earlier, he had published a seemingly conciliatory op-ed in the New York Times in which he spoke about reconciliation with the Palestinians. But, when pressed deeper about the details – in particular, what exactly is the alternative if the two-state solution is dead, he said a one-state solution was untenable given the demographics in which Palestinians would soon constitute a majority.  Instead, he argued that a “normalized” status quo was both acceptable and sustainable.  He said the settlements should be allowed to continue with Israeli government support.  He noted that Israeli politics had increasingly turned and has much stronger settler representation than ever.  Even the IDF has changed and many of its officers come from the settler communities – they will never force Israelis off of their lands in Judea and Samaria.  In short, he argued that it was time to recognize the real situation and “normalize” the occupation.

To give us an example of this “normalization,” process, we were given a tour of a plastic factory in the Barkan Industrial Park.  We were told that this factory and other similar commercial activities were examples of the way in which hundreds of settlers and Palestinians work together on the shop floor and develop greater interactions and understanding.  Yet, as we were later told by a number of Israelis and Palestinians, there are problems with this scenario.  Among other things, there are no Palestinians in management and wages are below those in Israel. We were also told us that the factory is not subject to Israeli environmental or regulatory standards.

We also traveled to Ramallah and met with senior Palestinian officials and heard a much different story regarding the status quo.  They warned that the situation throughout the West Bank and Gaza was very tenuous.  In particular, the heavy IDF activities being conducted at the time in the West Bank in their search for the missing Israeli teens could very well trigger an escalation of violence.

I had been to Ramallah four years ago with another group and we had met with then Prime Minister Salam Fayyad.  Fayyad, a University of Texas educated economist who had worked on the staff at the Federal Reserve in St. Louis and later at the World Bank, brought his technocratic skills to the effort of building a Palestinian state.  His vision in 2010 was to create a new set of facts on the ground — a campaign he called “Two Years to Statehood.”  At the time, the Palestinian Authority had just unified the seven separate Palestinian security services into a single entity.  Fayyad and the PA initiated an effort to reform and professionalize the security services so they – and not the IDF – would be able to provide security in the West Bank.  Fayyad had also begun to implement a new banking law, a commercial law, and establish basic administrative procedures for municipal governance, budgets, and planning – all of the technical elements required of statehood.

Now, four years later, many of those initiatives have been successful.  While there are frequent and extensive obstacles stemming from the occupation and high levels of internal corruption and political infighting within the PA (Fayyad resigned/was pushed out in 2013 in a feud with Abbas over economic policy), the PA state institutions are generally functioning at a number of levels.  But, the Palestinian officials lamented that their successes have created a number of perverse effects.  They argued that their success in creating a unified Palestinian security service and other functioning institutions had essentially lowered the occupation costs for Israel.  Because of the general stability they’ve created in the West Bank, they argued, Israel now enjoys a “Five Star Occupation.”  And it is this stability that has led many Israeli leaders to move away from the two-state solution and to think that the status quo is acceptable and sustainable.

Coming back to sipping mint tea with the two young Palestinian shop owners, they expressed deep frustration with the status quo and with leadership on all sides. They told us that there is no dignity, no normalcy to life for Palestinians.  The settlements continue in East Jerusalem and the West Bank.  Gaza is an internment camp. Israel has a two-tiered system for people – one for Israelis and one for Arabs.  They told us that Abbas is corrupt and that he has abandoned the Palestinians by compromising with the Israelis – and that Arafat wouldn’t tolerate Abbas.  And, that Hamas is a group of corrupt radicals.

The young owner also told us that he was waiting for, and expecting, the third Intifada.  It’s close.  We mentioned that with his family owning more than 20 shops, he and his extended family seemed to be very successful merchants in the Old City and that they had a very long and established 160-year-old presence in the business community.  In short, didn’t he and the family have a lot to lose?

He repeated that life was not normal.  And, couldn’t be normal with the occupation.

We asked if he and his friends might consider a different tack – perhaps a non-violent approach.  He looked at us quizzically.  He then handed us his i-Phone 5 with Google Translate open.  He asked us to translate this question for him.  My colleague wrote something to the effect that the Israelis might fear massive non-violent civil resistance more than anything and asked whether or not he had read Martin Luther King or Gandhi.

He took the phone and read it.  He again looked quizzically before smiling and said,  “No.  This will not work here.”

He said that when the third Intifada comes, he’d gladly be on the front lines.  Throwing stones.

Given the rapid escalation of Hamas rocket fire and Israeli airstrikes over the past two days and the festering feelings on the ground, it looks like he won’t have to wait long.