gourimoko
Fighting the good fight!
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I'd say that they know a single state solution will not happen, and that therefore, their attempts to make an "other" solution impossible is instead an attempt to make any solution period possible.
Wait.. say what?
The only other explanation is that they will use the additional settlements as eventual leverage/givebacks to get the most favorable two-state solution they can.
That may be how this is eventually resolved, albeit under a different government.
The other explanation is that they (the current government) have no intention of creating a viable Palestinian state, and instead, hope to reach a point where they will create semi-autonomous bantustans with which the Palestinians are to be corralled.
I would imagine the ultimate goal, other than a land grab, is the belief that you can enact some basic form of population control by confining any given group of people to an ever diminishing land area. This evidenced by the stark deviation in rate of population growth between the West Bank and Gaza.
Essentially, the plan to establish 'Eretz Israel,' or an Israeli state from the Mediterranean to the Jordan River, would likely result in the West Bank being broken up into pieces that would begin to resemble Gaza, more and more.