I awoke one recent morning to the sound of Israeli jets flying low overhead — an unsettling way to start the day, but not nearly as menacing as it sounds. The jets were practising their manoeuvres for this week’s anniversary celebrations.

Israel is turning 60. And in this country, ever-divided, ever-controversial, the anniversary means different things to different people.

A youth waves an Israeli flag late Wednesday as fireworks explode in the sky over Rabin Square in Tel Aviv during a ceremony to mark the 60th anniversary of Israel. (Lefteris Pitarakis/Associated Press)

The flag-waving and fireworks stand in stark contradiction to the rallies and protests planned in the occupied West Bank, where Palestinians will commemorate the "nakba," or what they refer to as the Catastrophe.

The anniversary marks the creation of Israel in 1948. That day, David Ben-Gurion, Israel's first prime minister, declared independence, launched Israel as a Jewish, democratic state and changed this region forever.

The state was born out of the United Nations Partition Plan. The Partition Plan was the first official proposal of a two-state solution.

But through years of fighting, diplomacy and even landmark breakthroughs, that second state never emerged.

Settlements and Israeli military outposts have carved up the West Bank, which was captured during the Six-Day War in 1967. Gaza is under the control of Hamas, the Palestinian militant Islamist movement denounced by Canada and most of the West as a terrorist organization. The group, elected to power in 2006, is being excluded from peace negotiations. Despite all of the discussion of an agreement being reached by the end of this year, it seems the obstacles have rarely been so imposing.

Palestinian and Israeli negotiating teams met once again this week to discuss the latest effort at negotiating peace. Officials on both sides of the divide says the talks are tough, but pushing ahead and making progress. At street level, however, few Israelis or Palestinians have much hope this round of talks will be any different from the countless others over the years.

So, after 60 years, what next?

Many Palestinians believe that the elusive, second state is no longer attainable. Increasingly, among Palestinians, there is talk of a one-state solution.

"The two state solution has become impossible, so we have to look at other alternatives," says Asad Ghanem, an Arab-Israeli professor at Haifa University.

Ghanem was a strong supporter of the two-state solution for years, but he says it's just not viable any more. Any state the Palestinians could possibly get now would be a "state in name only."

So, the professor is now working with groups in Ramallah, Damascus and London, trying to promote the idea of a democratic bi-national state for both Jews and Arabs. They are trying to figure out how such a state would look and how it would function. They hope to have a formal proposal ready for the fall.

Their proposals are based on various power-sharing agreements. One includes separate parliaments for Palestinians and Israelis on some issues, and a common legislative body for federal or national issues.

The idea of a bi-national state is not new. (In fact, it was first proposed by one Jewish movement here in the late 1920s.) It’s been lingering in the shadows for years. But now, the idea appears to be gathering steam. Palestinian pollster Dr. Khalil Shikaki says the idea has now broken the 25-per-cent-support barrier.

That figure is significant unto itself. A quarter of the population is now looking at this is a real and viable solution. Historically, 25 per cent is considered a threshold of sorts, a threshold the one-state solution proposal has now crossed.

Supporters include mostly young people and left-wing intellectuals, but the idea is beginning to spread. One Palestinian militant I’ve come to know is reluctant to give up the dream of an independent state, but he says if the current round of negotiations collapses, there may be no other choice.

"We’re very close to the point where Abbas will say he got nothing from the negotiations," Haifa University’s Ghanem told me. "This will help us bring the proposal to the people."

The concept is horrifying to almost every Israeli. The very threat of a one-state solution has forced Israeli concessions in the past. The fear of demographics is at least partly credited with Ariel Sharon’s decision to pull all Israel’s settlers and soldiers out of the Gaza Strip in 2005.

There are almost as many Israeli Jews as there are Palestinians in Israel, the West Bank and Gaza combined. If a one-state solution actually came to be, Israel could either be Jewish or democratic, it could not be both.

Controversial options

As the latest round of negotiations began in Annapolis, Md., last year, Israeli Prime Minister Ehud Olmert told the liberal daily Haaretz: "If the day comes when the two-state solution collapses, and we face a South African-style struggle for equal voting rights then, as soon as that happens, the state of Israel is finished."

The irony here is that support for a negotiated, two-state solution has never been higher. Seventy per cent of Israelis recently surveyed support the idea of "two states for two peoples." Two-thirds of Palestinians, meanwhile, support two states … but an equal number believe the dream of a Palestinian state will never be realized.

This land has been plagued by conflict and division. Through years of wars, intifadas and seemingly endless negotiations, the conflict remains. Ghanem says it's time those on both sides take a step back and look at all the options. Maybe, he says, after all these years of trying to find a way to live apart, the answer is trying to find a way to live together.

As the morning’s jets moved on and wrapped up their exercises, I turned to the morning news. A colleague of mine, writing about the anniversary, said Israel is "the most-loved, most-hated, most-bewildering small country in the world."

Bewildering indeed.