I intend to further explore these issues by focusing on one at a time. The most common argument against the bi-national state solution is that the supposed ingrained Palestinian hatred of Jews would lead them to exert "legal genocide" against them in the framework of a shared political system - ie, "vote Jews into the sea." This critique argues that Palestinians and Jews can never live side by side as neighbors.
shorthand definitions: Ps = Palestinians, Js = Israeli Jews
First, there is a definite asymmetry in these arguments. The Palestinian populace as a whole is assumed to be implacably anti-Semitic - but this assumption is completely disassociated from why they would be. Do Js assume that Ps hate them for hatred's sake (as did Hitler) ? Or is there tacit acknowledgement that the occupation is the reason for the Ps anger?
Likewise, is there any acknowledgement of Js anger and hatred towards Ps? After all, from the Js perspective, you have a seething mass of pure anti-Semites who are sending waves of murderers at them. Wouldn't Ps be at equal risk of being voted into the (Red) Sea by a more powerful political bloc of Js in any theoretical federal system?
The truth is that if Js and Ps entered into a common framework of government, there woudl be as much incentive for Js to commit electoral genocide upon Ps as vice versa. If the basic assumption of ingrained hatred is correct, it must cut both ways. But this hatred does not exist, not in the sense that Js fear. The hatred is only as deep as the occupation.
The next argument here is that due to their numerical advantage, Ps would have an unfair power over Js. But from what we see of the American system, electoral genocide is simply not possible. The US Constitution was designed expressly to prevent the tyranny of the majority and the tyranny of the minority - to achieve balance. It survived the anger of the Loyalists, the resentment of the South, the political awakening of blacks, and a thousand other ethnic and religious challenges that strove to divide Americans from within. And it has been succcessfully applied elsewhere - notably South Africa, where the cruel legacy of apartheid has been overcome. The reason for its strength is because it amplifies the power of those who work within the system, and enables all to achieve the self-determination that is the basic human desire. As long as that desire is frustrated, there will always be strife.
Our Constitution is the embodiment of this principle: if you desire peace, work for justice.
Critics of the binational state invoke the image of neighboring houses, of Ps and Js, peeking out their windows in mutual distrust. However, the binational state does not advocate forced desegregation, busing, mixed neighborhoods, etc. It simply overlays a federalist govt over the existing regions of Israel-Palestine, and opens up pathways for proportional representation according to the American model. If you analyse the Proposal, you see that the states of the federal union are drawn largely upon existing demographic boundaries. Tel Aviv would not be annexed into Gaza State.
Nor would the "right of return" have any meaning in the sense it is currently viewed. This problem would be addressed by rebuilding destroyed villages in designated areas, as is outlined in this map of proposed boundaries and discussed in the section "Regional Description", especially the sub-sections Al Jalil (the Galilee) region, Bisan Plateau (Yisakhar Plateau), and Marj ibin Amer ( Izre'el Plateau).
(Please note: to have a coherent discussion on this sub-topic, reading of these sections is an absolute pre-requisite.)
There is a general expectation that for any peace to be achieved, the onus is entirely on the general palestinian society to eradicate violent terrorists 100% from their ranks. This is a simple denial of reality. The truth is that no matter WHAT solution comes about - transfer, separation, binational state, two state, or even just continuation of the present situation for infinity - terrorism will remain. The radicalization of palestinian society's extremists (while NOT representative of the mainstream) is a simple "fact on the ground" just like the settlements are.
It is necessary to address "root causes" - and by analogy, invoke the neocon model of transforming the Middle East by democracy's sword (or JDAM, if you prefer). The neocons explictly admit that there will continue to be Al-Qaeda terrorists even while we are dismantling Iraq and installing democracy. Whether or not the neocon goal of installing democracy will succeed or fail is another matter - but I do agree on the single point that the violence is a symptom of an underlying malaise. In eth case of the Israel-Palestinian conflict, this malaise is the occupation.
The Palestinians share the same desires for peace and happiness as Jews do. Jonathan points to proof:
Palestinians also worked in Israel and watched Israeli television. They saw that, for its own citizens, the Israeli system had distinct virtues. This is not easy for even ardent Palestinian democrats to acknowledge.
Yet since 1996, Dr. Shikaki has been polling Palestinians about what governments they admire, and every year Israel has been the top performer, at times receiving more than 80 percent approval. The American system has been the next best, followed by the French and then, distantly trailing, the Jordanian and Egyptian.
This actually doesn't surprise me, although I've never seen it in statistical form. I've heard anecdotal versions before, in the form of intifada leaders' stories of how they learned about democracy while watching television in Israeli prisons, and the latest PCPSR poll seems to confirm that most Palestinians want what they see on television. Of the 1319 Palestinians surveyed, 65.5 percent rated Israeli democracy as "good" or "very good" - and this was in a poll taken in November 2002, after Operation Defensive Shield.
 Note that the issue of the Jewishness of Israel is a completely separate matter, relating to demographic identity. For more on this topic, see this earlier post and this article in Ha'aretz. I will discuss the demographic issue in a subsequent post.