By Peter Hirschberg

JERUSALEM, Jul 10 (IPS) - Israeli Prime Minister Ehud Olmert has laid it out in the starkest possible terms for his fellow Israelis. If they do not relinquish control of the occupied territories, he has warned them, Israel will ultimately cease to exist as a Jewish and democratic state.

If Israel does not extract itself from the West Bank and a Palestinian state is not established alongside the Jewish state, he said in an interview late last year, Israel will find itself trapped in an apartheid-like reality. "The day will come when the two-state solution collapses and we face a South African-style struggle for equal voting rights," he said. "As soon as that happens, the state of Israel is finished."

Olmert's conviction is driven by what many Israelis call "the demographic threat" -- a scenario in which Arabs, due to their higher birth rates, outnumber Jews in the geographic area between the Jordan River and the Mediterranean Sea, which includes Israel, the West Bank and the Gaza Strip.

Once the demographic balance tilts against Israeli Jews, Olmert has warned, they will find themselves in a quandary in which a Jewish minority rules over an Arab majority. When that happens, he explained, Israel will be confronted by a battle it cannot win: Palestinians will abandon their demand for a separate, independent state in the West Bank and Gaza and instead will demand one-person, one-vote in a single state -- a demand that will become irresistible within the international community, as happened with South Africa.

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