Abstract: The Israeli-Palestinian conflict is deeply paradoxical: the basic outline of a deal is reasonably clear and yet this violent conflict persists with over 4,000 causalities since the collapse of the last significant effort to bring peace in 2000. The paper suggests that this paradox stems from internal conflicts on each side. It focuses on the internal conflict among Israeli Jews over the future of the Jewish settlements in the West Bank and Gaza. The paper describes the settlements today and argues that beneath the debate about their future, this tension implicates the core identity of some, but not all, the protagonists. The paper further reviews the history of the settlement movement, and shows how, in the face of opposition, a determined minority (the national religious settlers) promoted and vastly expanded the settlements. The paper then offers an explanation for why the national religious settlers have wielded such disproportionate influence in the Israeli political system. The paper ties the discussion to Prime Minister Sharon's proposed limited withdrawal from Gaza and the northern West Bank by the summer of 2005, and shows how the settlers, drawing on their sources of influence, are attempting to block any evacuation of settlements. In the concluding section, the paper focuses on the current conflict over Prime Minister Sharon's proposal and offers suggestions about how the internal conflict might best be managed.