The inability of successive governments to deal with the illegal outposts is an embarrassment to Israel and a blow to the rule of law, which is a fundamental pillar of any democracy. At the same time, the international focus on settlements in general, and on outposts in particular, is selective, anachronistic and a distraction from the real obstacle to peace. It is embarrassing that more than two years after the cabinet accepted a comprehensive report that it had requested, prepared by lawyer Talia Sasson, almost nothing has done to clean up the legal morass concerning settlement activity. Sasson sorted out the status of the outposts that existed at that time, categorizing them according to whether or not they were built on private Palestinian land, and the degree to which the state had indirectly authorized them by providing services or even by extending some level of official approval. She also made legal recommendations for changing the situation that allowed the outpost phenomenon to appear and persist, namely the penchant of different authorities to take contradictory actions, and the failures in enforcing existing laws. It is encouraging, therefore, that the special ministerial committee appointed to deal with the problem met this week, after a long hiatus, and that its chairman, Vice Premier Haim Ramon, committed to drafting new legal guidelines by mid-November. It is also positive that both the government and settler leaders say they are seeking a solution that would allow the evacuation of at least some illegal outposts by agreement, rather than by force. It is assumed that such an agreement would involve the dismantling of some outposts in exchange for the legalization of others. Such a negotiation, however, need not be looked at so narrowly. What if, for example, both sides were to agree on dismantling outposts in exchange for allowing the growth of existing settlements in consensus areas, such as those inside the security barrier? While it is unlikely that the international community would officially endorse such a plan, it should do so tacitly. It is a mistake for countries supporting a two-state solution to continue seeing anything concerning settlements as waving a red flag. Ever since 1967 there have been two kinds of settlements, even if the line between them was not always easy to draw: those designed to provide Israel with defensible borders and those designed to block the establishment of a Palestinian state. Both the settler movement and its opponents have resisted making such a distinction, claiming that settlements are all good or all bad, all absolutely necessary or all absolutely illegal and harmful. By now, however, it should be clear that the refusal to distinguish between "good" and "bad" settlements works against, not for, a two-state solution. Those pushing for a Palestinian state should be the first to be pleased at the Israeli trend toward distinguishing between the two types of settlements, and should support efforts to solidify such distinctions. The two-state concept is an exercise in partition in which the principle is more important than where the line is drawn. Ironically, it is maximalists on both sides, for and against settlements, who seem to be joining hands in opposing any such line-drawing exercise - whether in the form of the security fence or a distinction between types of settlements. It is perhaps understandable that those who are against a two-state solution - whether because they oppose the establishment of Palestine or the existence of Israel - would be against such distinctions. It is also understood that the question of borders is a final status issue to be negotiated between the parties. But why should not the US and Europe, which support the two-state concept and oppose the maximalists, quietly rejoice at an internal Israeli agreement that acts to solidify the consensus in favor of retaining areas that no Israeli government can concede and toward parting from areas that most Israelis regard as rightfully theirs but do not want to rule? Meanwhile, the entire settlement debate must be put into its proper context. The obstacle to peace is not those who advocate Greater Israel, who have lost the debate here, but terrorism in the name of Greater Palestine, meaning the destruction of Israel. It is on confronting this latter genocidal mindset, which is far from defeated and openly regards all of Israel as an illegal settlement, that the international community must focus if the hopes for peace are to be advanced.