If someone asked me to sum up in a sentence where Israel will be a decade from now, I’d paraphrase Dickens: It will be neither the best nor worst of times. The Israelis will prosper and keep their state, but the Arabs and Iranians will never let them completely enjoy it.

What drives many Israelis and the government that represents them is not a Scrooge-like Christmas Eve glimpse of a terrifying future, but a strange mix of accomplishment, comfort and anxiety that reinforces the desire to maintain the status quo, particularly on the Palestinian issue. And that attitude is not going to change anytime soon.

Mitt Romney’s stumble on the Palestinian question highlighted just how comfortable many Israelis are, and the sheer magnitude of what they have accomplished. Romney mistakenly lowballed Israel’s per capita GDP (about $31,000 in 2011, according to the World Bank, rather than his misstated $21,000).

Yes, Israel has serious worries: The gaps between rich and poor are growing; the military conscription issue highlights the resentment toward the ultra- Orthodox, their unemployment rate (60 percent for men) and the drain they place on state resources. The country’s demographics look bad – too many ultra-Orthodox Jews, Palestinians and Israeli Arabs and not enough secular Jews. Moreover, the mass demonstrations last year by Israelis young and old protesting the extremes in wealth and poverty and the squeeze on the middle class were stunning reminders of the extent of general disaffection.

Still the demonstrations weren’t sustainable. Most likely, it’s because – all in all – times are just not that bad. Indeed, along with all the forecasting of gloom and doom there’s this: Per capita, Israel gives rise to more start-ups than any other country. On the UN’s 2011 Human Development Index, Israel – a country of sevenand- a-half million people – stands 17th out of 187 nations. The discoveries of natural gas in the Mediterranean will not only take care of Israel’s needs but by 2017 make it a significant exporter.

As for the Palestinian issue that threatens to undermine Israel’s future as a Jewish, democratic state, there too the dangers seem mitigated by the current situation. The Palestinian Authority’s state-building enterprise and the security cooperation between Israeli and Palestinian services have generated more than a manageable status quo and all but eliminated terrorism.

The Arab Spring has left the Hamas leadership with few options and no real desire to wrangle with the Israelis militarily. And the approaching demise of the Assad regime in Syria will weaken Hezbollah.

If economic prosperity and a tolerable Palestinian problem seem to reinforce the status quo, the disquiet caused by instability elsewhere in the region validates Israel’s caution in not wanting to change it. Israel seems book-ended by two major worries that have all but subordinated the Palestinian issue to the back burner: Egypt’s future and Iran’s centrifuges.

The Israelis may have gotten over the shock of Hosni Mubarak’s ouster and the immediate fear that a Muslim Brotherhood president was going to abrogate the peace treaty. The Egyptian military and Cairo’s need for Western support will prevent that.

Yet the range of problems, from security in Sinai to support for Hamas in Gaza, will introduce new uncertainty into Israel’s most important relationship with any Arab state and the only one based on the exchange of significant territory for the promise of normalized relations. Should that relationship deteriorate, the chances of a deal with the Palestinians on the same basis will recede.

The Iranian nuclear issue presents an even greater challenge and strategic priority. Israel is seeing its worst fears realized. Sanctions hurt but won’t retard Iran’s enrichment of uranium, and negotiations aren’t capable now of producing a deal to stop that process at bomb-grade levels.

The fall of Bashar Assad’s regime in Syria will help weaken Iran. But it could also serve to accelerate the Iranian nuclear program, due to Tehran’s fear of Sunni encirclement.

One of the biggest losers from the Iranian nuclear program may well be the Palestinians. The Israelis never bought the argument that solving the Palestinian issue would weaken Iranian influence in the region.

For this Israeli government, Iran is a much bigger priority. And if there is an Iranian-Israeli conflict or one involving the United States, the resulting turmoil would make Israeli-Palestinian negotiations almost impossible.

Given the uncertainties in the region, the odds of resolving its most complex problems – Palestine, the Iranian nuclear issue, the Arab quest for representative government – seem very long indeed. Even under more enlightened governments than the current one, the issue has never been about comprehensive solutions. Instead, Israel traditionally looks to buy time, preempt and prevent on the military side when necessary, and take calculated risks in pursuit of peace when possible.

It’s not an ideal strategy – and one not always well-suited to the Silicon Valley of the Middle East and to a country that wants a more peaceful and prosperous future. But it’s kept a small country living on knife’s edge alive and in remarkably good shape. And that’s got to count for something.

The writer is a public policy scholar at the Woodrow Wilson International Center for Scholars and the author of The Much Too Promised Land: America’s Elusive Search for Arab-Israeli Peace.

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