Number: R40092 Title: Israel and the Palestinians: Prospects for a Two-State Solution Authors: Jim Zanotti, Analyst in Middle Eastern Affairs Abstract: This report reviews the prospects of a two-state solution in the context of possible signs of progress and doubts raised in U.S., Israeli, and Palestinian circles during the Annapolis process (including questions of urgency). After outlining possible alternatives to a two-state solution, the report analyzes the policy challenges facing either an urgent or a more deliberate U.S. approach to promoting a two-state solution-including implications for Congress-on matters such as foreign aid, security assistance, Israeli settlements, and the treatment of Hamas (a militant Palestinian group that is a U.S.-designated Foreign Terrorist Organization, or "FTO"). Pages: 22 Date: December 10, 2008