There are systemic tactical problems with Dragon's solution. The whole issue comes up with Israel itself, which is a nation founded on a genetic / religious identity, created out of sheer humanitarian necessity, but at its root it inherents what is its biggest sin: to precisely create a nation founded on racial / religious identiy. I feel, as Dragon does, that to strip out Israel of this identity would be a necessary step for it to become a secular, democratic project that could, in theory, shine a light of democracy and freedom throughout the middle east.
However, the reality on the ground is absolutely different. In reality, if such an Israel would be enacted, muslim fanatics would start to overpopulate Israel until they dominated the country in terms of democratic majority. The effects of this demographic change would change its own politics until they represented muslim moral traits, at which point it would become just like another muslim country near it. Now, you can jump at me and tell me this is just a fearmongering right wing scenario, so I'll say also this: I can totally see the israel fanatics fighting this demographic war on their own, and we would end up with a country demographically filled with two religious fanatical groups. "What could go wrong".
Israel will have none of this. To fight this possibility, they will fight to maintain Israel's identity. Which is, again, based on racial and religious traits, rather than, say, a secular idea about what a society should be like (as in the USA, for instance). Which is, again, terribly "right wing" in itself.
I see no solutions here. In that sense, I'm just as intelligent as the next idiot.