The United States Institute of Peace’s Project on Arab-Israeli Futures is a research effort designed to anticipate and assess obstacles and opportunities facing the peace process in the years ahead. Stepping back from the day-to-day ebb and flow of events on the ground, this project examines deeper, over-the-horizon trends that could offer new openings for peace. The effort brings together American, Israeli, and Arab researchers and is directed by Scott Lasensky, a Senior Research Associate at the Institute. In this report, General Shlomo Brom traces the development of Israeli national security thinking about Palestinian statehood, and the implications it holds for American policy. The first study in the series, “The Future of the Israeli-Palestinian Conflict: Critical Trends Affecting Israel,” by Yossi Alpher, was published in September 2005. The second report, “Willing to Compromise: Palestinian Public Opinion and the Peace Process,” by Khalil Shikaki, was published in January 2006.