The three member group led by former High Court justice Edmund Levy charged with investigating the legal status of unauthorized settlements in the West Bank issued its report yesterday, and its consequences cannot be overstated. The Levy Report found, in a nutshell, that the occupation of the West Bank is not actually an occupation because Israel’s presence there has spanned decades and is thus unique in modern history, and it therefore follows that settlements are not illegal as they are not being built in occupied territory. The report also states that because unauthorized settlement construction took place with the tacit agreement and implied support of successive governments, the unauthorized settlements can be retroactively legalized. So basically, for those following along at home, if you do something that is illegal for long enough, you can just call it legal later on down the road, and if the government decides to ignore the rule of law, that somehow changes the meaning of rule of law. In what can only be described as the most extreme of self parodies, Yesha head Dani Dayan praised the committee’s “impartial first rate jurists” and said that “it is clear that deep, basic and serious legal work was done.”

The report itself is bad enough, but more worrisome is the reaction from cabinet members, who are literally falling all over themselves to see who can be the one to most effusively praise the committee’s findings. The politics are such that there appears to be zero downside to pretending that Israel is not militarily occupying the West Bank because this occupation does not look like other occupations, and that is bound to create pressure for the government to formally endorse the committee’s findings. The fact that I haven’t seen any statements at all from people such as Benny Begin or Dan Meridor (and if they have issued statements or given interviews, please email me or post in the comments section) is even more worrisome yet, since their silence on this means that they either agree (unlikely) or are too cowed by the settler movement to speak out against it. Even Tzipi Livni, who is not a huge settlement advocate and who is not even formally in politics at the moment, said that “it is possible and necessary to use the Levy Report for matters of international law, while considering the current reality and continue negotiations on settlement blocs.”

Israel has reached a dangerous point, and I do not say that lightly. For years, Israel and Diaspora Jews railed against the idea of a one state solution, which was viewed – quite correctly – as a backdoor way of dismantling the Jewish state. With the Levy Report, Israel’s right wing has come up with its own one state solution, but the problem is that this one smashes any pretense Israel will have to being a democratic state unless it enfranchises all of the Palestinians living in the West Bank. Somehow, I don’t think that this is what Edmund Levy, Avigdor Lieberman, or Dani Dayan have in mind. If this happens, Israel can kiss any international support that it has goodbye, and that includes the U.S. I painstakingly made the case once before that U.S. support for Israel stems from the fact that it is a democracy and that should not be taken lightly. Israel does not want to live in a world in which it is forced to make common cause with China and Russia, and Jews of all stripes – Israeli and American, religious and secular – do not want to have to defend an Israel that openly annexes the West Bank while permanently and legally relegating the Palestinians to official second class status.

I refuse to believe, or perhaps just hope, that Netanyahu is stupid enough to take the Levy Report to its fullest logical conclusion. He is a smart guy and is well attuned to the challenges Israel faces, both military and otherwise, and he knows that what amounts to an annexation of the West Bank without corresponding political rights for all of its residents – in essence, the dreaded one state solution –  would be suicidal. This is more than maintaining the status quo, in which Israel and the Palestinians negotiate on and off, the big settlement blocs that Israel is expected to maintain in a deal continue to grow, and Israel accepts that it is an occupying force that does not intend on remaining in the West Bank forever. The Levy Report represents a revolutionary and radical change, in which the occupation does not exist, the peace process is over, and the two state solution is finally dead and buried. There is no going back from this, since once the Israeli government declares that it is not occupying anything, it will be impossible to reign in the settlers if the government ever comes to its sense and changes its mind. The implementation of the Levy Report would make Israel a true pariah state on the world stage, and implementing it and then walking it back would mean civil war. Netanyahu knows all this, and he isn’t going to drive Israel into a ditch.

So, what happens next? I have been arguing again and again and again, and then one more time for good measure, that Likud is a party busting apart at the seams and destined to split. I think that this might be the final crack that splinters the party, depending on what Netanyahu does. The pressure from the settlers’ wing, triumphant in this gift that they have been handed, is such that Netanyahu cannot just blow them off or even water down the Levy Report. If he wants to keep them in the fold, he needs to implement the report, or else he is going to have a full blown rebellion on his hands and will be denounced up and down for betraying the settlers’ cause. If, on the other hand, he grasps the full enormity of what accepting the Levy Report means, then he is going to have split Likud in two. I stand by my prediction that he is going to choose keeping Israel in one piece and fracturing his party rather than the other way around, but if he doesn’t, then Israel is in for some dark days ahead.