Is a Two-State Solution still Possible?

I've been a life long supporter of the two-state solution. I've never believed a one-state ('bi-national') solution could somehow be viable and based my rejection on the entire range of well-known arguments available against it.

Now? I'm not so sure anymore. Reading up (again!) on the current state of play regarding West Bank Israeli settlements and Israel's de facto occupation of that part of Palestine, one really has to wonder how withdrawal of the settlers can still be a realistic goal. You only have to go back to the 2005 withdrawal of less than 10,000 Israeli settlers from Gaza to envisage what kind of mayhem the withdrawal of 275,000 or so West Bank settlers will cause. How can any non-suicidal Israeli politician sell this idea to its electorate, considering how many felt let down by the aftermath of the Gaza withdrawal ('No land for peace!') and that the settlers enjoy widespread support from certain parts of the Israeli population?

There is of course a third way: a one-state solution (Greater Israel) from which Palestinians would be expelled or in Moshe Feiglin's terms: 'transferred with incentives'. Similar ideas of an Arab free Greater Israel are also being embraced by the relatively new group the 18. The latter has already found support among a growing group of radical Zionist bloggers.

Nir Rosen recently put it like this:

A Zionist Israel is not a viable long-term project and Israeli settlements, land expropriation and separation barriers have long since made a two state solution impossible. There can be only one state in historic Palestine. In coming decades, Israelis will be confronted with two options. Will they peacefully transition towards an equal society, where Palestinians are given the same rights, à la post-apartheid South Africa? Or will they continue to view democracy as a threat? If so, one of the peoples will be forced to leave. Colonialism has only worked when most of the natives have been exterminated. But often, as in occupied Algeria, it is the settlers who flee. (Nir Rosen, Comment is free).