Hours after Prime Minister Benjamin Netanyahu finalized the formation of his new coalition, the Jerusalem District Planning Committee announced the construction of 900 homes in East Jerusalem.  The United States has objected to the project before, and the U.S. State Department restated its strong opposition on May 6th. 
There is good reason for this opposition. Under Article 49 of the Fourth Geneva Convention, an occupying power may “not deport or transfer parts of its own civilian population into the territory it occupies.”  The Israeli settlements in the West Bank and East Jerusalem are in violation of international law, period, end of sentence, full stop. The fact that the settlements continue notwithstanding this indicates that the Israeli government has no actual intention of going forward with the two-state solution negotiated at the Annapolis Conference in 2007. 
The United States has three options for responding to this action on the part of the Israelis: (1) it can continue with a policy of unconditional support for Israel, regardless of its actions, (2) it can throw up its hands and disengage from the Mideast peace process entirely, or (3) it can propose an entirely new solution.
The first option would put the United States in the position of supporting a violation of international law. While it might be legitimately pointed out that respect for international law hasn’t been a feature of American foreign policy in recent times, it is hard to see how a lawless international order can be in the interest of the United States in the long term. The only alternative is force, and that policy will eventually impoverish us. Moreover, an international system that respects firepower more than the rule of law may not work well for our descendants, who might find themselves outgunned by a power that will arise in the future.
Disengagement has its appeal, but history doesn’t allow any do-overs. When alliances are formed, countries that renege on them are not likely to be trusted by any nation in the future. While it would most certainly be the better part of wisdom to avoid further foreign entanglements, present commitments must be honored. We would lose far more than we would gain by simply abandoning Israel.
That leaves us with the necessity to get creative. The two-state solution isn’t working, and it is becoming quite clear that it will not work if Israel gets its way. So let’s give in and let Israel have its way. Let the new American policy be that the West Bank and the Gaza Strip will be annexed by Israel, and that the previous annexations of East Jerusalem and the Golan Heights will be recognized by the international community.
But there should be two conditions. The first is that every resident of East Jerusalem, the West Bank, the Golan Heights, and the Gaza Strip will become citizens, with all that entails, including the voting franchise. Their citizenship will be automatic, without a requirement to apply for it. The second is that every citizen will enjoy equal protection of the laws, and that there will be no discrimination based on ethnicity or religion.
This is hardly the first place this remedy has been proposed; it is known as the one-state solution.  It has the advantage of giving both sides everything they want. Of course, the mistrust that has built up on the part of both Israelis and Palestinians cannot be ignored, and so there will have to be, for a time, international guarantees of equal protection for all citizens, old and new.
Here is a solution that the United States can get behind without sponsoring the violation of international law on the one hand, or abandoning its commitment to Israel on the other. It also has the advantage of being consistent with the best of American values. For these reasons it is something that the United States should insist upon. Israel, of course, is free to reject the idea, and, if it finds the American position intolerable, it can choose to abandon the United States.