The unofficial truce with the Palestinians is rapidly becoming unworkable. Israeli troops in the West Bank, are still being attacked. Many armed Palestinians remain ready for action, and continue to be hostile towards Israel. Palestinian media still spews anti-Semitic and and "death-to-Israel" stories (on the front page, not the op-ed page in the back). The Palestinians are rebuilding their police force, but many of the cops have worked as terrorists and are not enthusiastic about the change of direction. The Palestinians are desperate, but not willing to change their core beliefs. And those core beliefs include the destruction of Israel and the establishment of "Greater Palestine." Palestinian school children are shown maps of Palestine that completely obliterate Israel. The Israelis know what the Palestinians believe, and have told the Palestinians  that any economic gains for Palestinians is contingent on no more terrorism inside Israel. Even with that, Israel is continuing to build the security wall, and plans to permanently reduce the number of jobs in Israel that Palestinians can hold. Israel is either automating the jobs Palestinians did, getting Israelis to do them, or allowing non-Moslem workers to come to Israel temporarily. Thus a major casualty of the "Second Intifada" was the idea that Israelis and Palestinians could live together. This does not spell disaster for Palestinians. If they can reduce the corruption in their midst, they can take advantage of higher education levels (compared to other Arab countries) and build an economy that does not depend so much on jobs in Israel. That will take time, and Palestinians will be paying for their defeat in the Second Intifada for years to come.