By Alastair Macdonald JERUSALEM, Nov 28 (Reuters) - Some years ago, Palestinian politics professor Ali Jarbawi recalls, he wrote an article on a family making a weekend journey from the West Bank into Jordan, then to Damascus, Beirut and home via the Israeli port of Haifa. "It was set in the year 2020," he said on Wednesday. "In the end, the father woke up. It was all a dream." As talks resume with Israel on founding a Palestinian state, the prospect of the next generation completing even that modest roadtrip of a few hundred kilometres (miles) around the Middle East seems no nearer reality, Jarbawi said, echoing profound uncertainty about the future among both Arabs and Israelis. "I'm not optimistic on having a Palestinian state," he said. It is 14 years since both sides agreed to seek a "two-state solution" -- and 60 years ago to the day on Thursday since the United Nations proposed splitting British-run Palestine in two. Yet for many in the region, the chances of now seeing a Palestinian state in Gaza and the Israeli-occupied West Bank inside another generation seems, if anything, more distant. Each side accuses the other of inflexibility and failing to meet prior commitments, whether to curb Palestinian militants or to halt Jewish settlement and ease the burden of occupation. "I'm not optimistic about the future of the Palestinians," said economist Omar Shaban in the Gaza Strip, scene of a brief Palestinian civil war this year that has left the enclave in the hands of Hamas Islamists hostile to President Mahmoud Abbas. "We will not have an independent state. The conflict will continue. We have leaders but they do not have real authority. Poverty will increase. The West Bank will see more violence." 'MOON SHOT' Some 2.5 million Palestinians in the West Bank and 1.5 million in Gaza live lives restricted by security measures that Israel says are the price of defending itself from militants. Tuesday's pledge at Annapolis to aim for a deal on a Palestinian state next year was, Israeli commentator Ben Caspit said, far-fetched: "It's like the fortune-telling there used to be on bubble-gum wrappers," he wrote in Maariv newspaper. "Like one that said 'You will fly to the moon by the time you're 30'. When will the Palestinians turn 30? Who knows?" Former Israeli negotiator Zalman Shoval also argued popular opinion on either side is too far apart: "The Annapolis process is not going to move the chances of real peace," he said. Shoval speaks for the opposition Likud party, whose leader Benjamin Netanyahu hopes to be prime minister again before long. Shoval sees a much longer international effort to bolster the Palestinian economy and government and security institutions as a more realistic prospect than the signing of a peace treaty before U.S. President George W. Bush steps down in 14 months: "If that process moves forward, we may -- and it may be a matter of a generation -- achieve not a formal written peace ... but something more realistic, a de facto peace." While international peacemaking efforts since the Oslo accords of 1993 focus on the creation of a Palestinian state living alongside Israel, other visions are also aired, notably among Israelis sceptical this could ever give them security. Some see a reversion to the situation before Israel occupied Palestinian lands in 1967, with Jordan responsible for the West Bank and Egypt the Gaza Strip. Few Palestinians -- and neither Arab state -- show any enthusiasm for such an outcome, however. Khalil Abu Shammala, a human rights activist in Gaza, said the outlook for the coming generation was grim, partly because of the divisions among their political leaders: "The feeling of Palestinian loyalty is being diminished by the chaos," he said. "Because they have arrived at a very shameful period, I am afraid they may accept any solution." 'ONE-STATE SOLUTION' Another possibility might be some kind of wide Palestinian autonomy within a state structure still controlled by Israel. Political scientist Jarbawi said Palestinians could turn to what he called a "one-state solution" as a demographic threat to Israel that offered them a state but also wanted West Bank land for Jews: "Either you accept a two-state solution on the 1967 borders or you're going to have to swallow us," he said. For some, 2020 could simply see status quo, with 7 million Israelis increasingly prosperous and entrenched behind new security measures that have kept suicide bombers largely at bay. As leaders met on Tuesday, investment rating agency Standard and Poor's said it cut its risk assessment on Israeli debt -- despite seeing little chance of Annapolis bringing peace. Yet many warn that such stability for Israel is untenable with a Palestinian population growing briskly amid poverty and violence in a region where aggressive Islam is on the rise. "The Israelis ... think they have security," Gaza economist Shaban said. "But for how long can they keep it up? The pressure is pushing some people toward more violence." Nomi Bar-Yaakov, an independent foreign policy adviser in London, said: "It's a false sense of security. "Time is not on our side. If there were to be more 'stagnation' ... you're really opening the door to groups with jihadi ideology, Iranian ideals." "That's why it's so important to have a meaningful process," she said, adding that this meant a major international effort to bolster the Palestinian economy, institutions and security in order to fulfil the kind of solutions outlined at Annapolis. For Gaza human rights activist Abu Shammala, the longer-term view remains elusive, however: "Palestinians think they are going into the unknown. They have no hope for the future ... so it's totally impossible to say what will happen in 20 years."
