Democracy and demography have become the main arguments for creating a Jew-free Arab state in Judea and Samaria. Israel’s presence in the territories deprives Palestinians of their democratic rights, the argument goes, and if Israel does not give the Palestinians whatever territory they demand, it will have to choose between its democracy and its Jewishness. The “democracy” argument has become the central justification of the diplomatic process, incessantly invoked by Secretary of State John Kerry and Israeli peace envoy Tzipi Livni. What makes the democracy argument effective is that it plays on deep-seated Jewish sentiments. Israelis are a fundamentally liberal, democratic people who desperately do not wish to be put in the role of overlords. The problem with the democracy argument is that it is entirely disconnected from reality. Israel does not rule the Palestinians. The status quo in no way impeaches Israel’s democratic identity. It is true that the Palestinians are not represented in the Knesset. But Israeli residents of Judea and Samaria are similarly not represented in the Palestinian Legislative Council. Simply put, both the Palestinians and Israelis vote for the legislature that regulates them. That is democracy (though obviously it does not play out as well in the Palestinian political system). The Palestinians have developed an independent, self-regulating government that controls their lives as well as their foreign policy. Indeed, they have accumulated all the trappings of independence and have recently been recognized as an independent state by the United Nations. They have diplomatic relations with almost as many nations as Israel does. They have their own security forces, central bank, top-level Internet domain name, and a foreign policy entirely uncontrolled by Israel. The Palestinians govern themselves. To anticipate the inevitable comparison, this is not an Israeli-puppet “Bantustan.” From their educational curriculum to their television content to their terrorist pensions, they implement their own policies by their own lights without any subservience to Israel. They pass their own legislation, such as the measure prohibiting real estate transactions with Jews on pain of death. If Israel truly “ruled over” the Palestinians, all these features of their lives would be quite different. Indeed, the Bantustans never won international recognition because they were puppets. “The State of Palestine” just got a nod from the General Assembly because it is not. Whether the Palestinian self-government amounts to sovereignty is irrelevant and distinct from the question of whether Israel is denying them democracy. Indeed, Israel’s democratic credentials are far stronger than America’s, or Britain’s–the mother of Parliaments. Puerto Rico and other U.S. controlled “territories” do not participate in national elections (and this despite Puerto Rico’s vote last year to end its anomalous status). Nor do British possessions like Gibraltar and the Falklands. These areas have considerable self-rule, but all less than the Palestinians, in that their internal legislation can ultimately be cancelled by Washington or London. The Palestinians are the ultimate masters of their political future–it is they who choose Fatah or Hamas. To be sure, Israeli security forces operate in the territories under Palestinian administration. But that has nothing to do with democracy; it is about security. Democracy does not give one political entity a right to harm others. And that is why American security forces conduct raids–assassinations, even–in countries around the world. While many object to America’s aggressive policies in these countries no one thinks it has anything to do with the democratic credentials of one side or another. Similarly, the Palestinian military operates throughout Israel–through rocket and missile strikes from Eilat to Ashdod. Yet no one suggests Palestinian military activities in Israel–which determine when there will be school in Beersheva and when not–mean that they have deprived Israel of democracy. This is no longer a dispute about democracy; it is a dispute about territory. The Palestinians have their own government; now their demand is to increase the geographic scope of their legislative powers to “Area C,” where 100 percent of the Jewish settlers live, some 400,000 people, and only 50-75,000 Arabs. The Palestinians want their “no Jew” law to apply there as well. Palestinian self-determination is one of the biggest developments that no one has noticed. It is important to recall where it came from. It was a result of the Oslo process, and the withdrawal from Gaza. This created space for truly independent Palestinian government to arise. This has not been costless for Israel. It subjected Israel to an unprecedented campaign of terror–to its citizens incinerated in buses and cafes–coordinated by the Palestinian government during the Oslo war. It legitimized the Palestinians as full-fledged international leaders, vastly facilitating their diplomatic campaign against Israel. And it has made most of the territories a Jew-free zone. Before Oslo it could truly have been said that Israel ruled the Palestinians. But that is over. However, that the “international community” still considers Israel as running the show for the Palestinians is an important warning that the reputational benefits for the Jewish state of peace agreements are fleeting and illusory. Moreover, the Palestinians rejected full independence and statehood on three separate occasions in the past twenty years. If it is true that Israel still controls them, it is a control that they have chosen to perpetuate. As part of their strategy of winning by losing, they perpetuate their semi-independence to maximize their diplomatic leverage. But that is not Israeli domination; that is Palestinian tactics. Imagine if Israel in 1948 refused to declare independence until all its territorial claims were satisfied and all Arabs expelled, and was subsequently overrun by the Arab states. Imagine if Jewish leaders stuck to this position for decades. Would the Arabs be imposing their rule on the Jews, or would the Jews be imposing the Arab rule on themselves? That such a scenario is more than far-fetched only underlines the historic uniqueness of the Palestinian strategy. Ironically, those who invoke the democracy argument are also those who say Israel must go along with the plans the U.S., Europe, and the “family of nations” have for it. But can Israel be a democracy if its borders, security, and the fate of its most holy places are determined by the opinions of foreign powers, against the inclinations of its elected government? Jeffrey Goldberg last week said Israel’s democratic status is threatened if it does not listen to the dictates of John Kerry, who was not even elected to lead America. Ultimately, the democracy argument proves too much. If Israel truly must give the Palestinians an offer they will accept to “save its soul,” then the Palestinians can demand anything, and should get it, assuming even a micro-state or protectorate is better than an evil one. And this is why the democracy argument will impede a genuine negotiated resolution. If Israel needs Palestinian agreement to save itself, why should the Palestinians agree? If they can impose “non-democracy” on Israel, the longer they wait, the better deal they get.