The Saudis are looking to get in on one of the 6th Gen fighter programs, and Israel will be lucky to still have access to F-35 parts, never mind anything newer. They're going to lose any qualitative advantage in the next 2-3 decades. And they don't have quantitative advantage, so then what?
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A 2 state solution is a fantasy - without Israel returning to its 1967 borders it's a laughable idea. No one who understands the situation on the ground actually believes it's possible any more.