The recent collapse of the US-brokered peace negotiations between Israelis and Palestinians and the eruption of violence between Israel and the Hamas show the enormous difficulties for reaching a two-state solution. Given the background of quite a few earlier failures, which sometimes led to bloody confrontations, the current impasse might lead to despair of the possibility of reaching a partition of the Land of Israel/Palestine between the two peoples. Despite this problematic record, this paper will argue that even though a two-state solution is fraught with numerous problems, it is the only possible peaceful solution that is both desirable and necessary. A key argument that buttresses this assessment is that in extreme nationalist conflicts, a partition, despite its numerous problems, is the most desirable solution or the least undesirable one. Over the years observers have introduced alternative conceptions of the character of the Israeli-Palestinian conflict as colonial, civilizational, religious, class, realist and civil/ethnic in nature. As I argue elsewhere none of these alternative conceptions is correct. Rather, I show in this paper that the conflict is a severe case of an ethno-nationalist conflict with numerous manifestations of what I call a 'state-to-nation imbalance.'