ISRAEL At 40: the Dream Confronts Palestinian Fury

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kind of surrender.'' But Israel over the years has hardened into the style of its region. ''Security'' in the Israeli lexicon is an emotionally charged absolute. Soon after Golda Meir took office in 1969, the Israeli psychology began to shift away from the old predisposition to negotiate. A British governor of Jerusalem, Sir Ronald Storrs, once referred to the ''mystic, the almost frightening, metallic clang of Zionism.'' With the election of Menachem Begin in 1977, the strain of biblical nationalism, the manifest destiny of Abraham's covenant, came parading through the Israeli mind. It was a triumphal Messianism that now justified the occupation, making it not only permissible but also inevitable. The West Bank became, to Begin and his supporters, the biblical lands of Judea and Samaria. Arabs or no, God meant the Jews to have that land. Before 1948, some ultra-Orthodox Jews vehemently opposed the very idea of a Jewish state. It was to them a blasphemy. There could be no state of Israel until the arrival of the Messiah. But since the advent of Beginism, Jewish religion and nationalism have mixed in a new way. ''We have come back to our homeland, and we are not going to leave forever,'' vows Rabbi Shlomo Goren, the former chief rabbi of the Israel Defense Forces. To such Jews, the West Bank is not ''occupied'' but ''liberated'' territory. ''When you begin to doubt our moral right to Judea and Samaria,'' says Joseph Ben-Shlomo, a leader of the right-wing settlers' movement Gush Emunim, ''you doubt the very justice of Israel's right to be.'' To further intimidate any doubters, Israel has for the past 21 years established what it calls ''facts on the ground,'' settlements that have changed the face of the West Bank and Gaza. Some 67,000 settlers have moved into well over 100 new compounds. The settlements are almost always built on high ground, in order to command the surrounding countryside, and part of the rationale for the settlements was that they increased the country's security by providing an early-warning system of any Arab military movement. For more than two decades, Israel has persuaded itself that the occupation is not so terrible. It has, in fact, brought the nation many benefits: cheap labor, captive markets, surplus taxes from the inhabitants and, of course, land for settlement. But Israel is paying a high price for its policy. The Arab stones are not injuring Israel so much as its own self-delusions are. By occupying the territories, and continuing to occupy them, it may be internalizing the most serious threat to its existence. Other Israelis believe that their country may be inviting its destruction by leaving the territories. The two positions are poles of the national debate. Still, Americans might find it difficult to live with 100 million Russians inhabiting Arizona, New Mexico, Colorado and Utah. By the year 2010, the Arab population of Israel, plus the territories, will have risen to rough parity with the Jewish population. Herein lies Israel's biggest dilemma. When the virtues of Israel are enumerated, almost the first to be mentioned by Israelis and their supporters is the fact that it is the only democracy in the Middle East. But when it comes to the Palestinians who live in the occupied territories, the Israelis are anything but democratic; Arabs have been denied fundamental civil and political rights. If present trends continue, Israel will have to choose between its democratic principles -- which would