Israeli military planners say the current conflict with the Palestinians could last for years and may escalate into a regional war.
The Israeli army believes the violent confrontation with the Palestinians could last until 2006, the full period covered by the five-year strategic assessment being prepared by military planners.
The report, quoted by the daily Ha'aretz newspaper, says the best Israel can expect is to negotiate a temporary reduction in the violence with the Palestinians, but says even that is unlikely.
The assessment says the conflict could deteriorate into a regional war, either because of an escalation with the Palestinians or a confrontation along the Lebanese border with Hezbollah guerrillas and Syria.
The Israeli military planners predict that the Palestinian Authority will not collapse.
They say Palestinian President Yasser Arafat is likely to remain in control, but that his ability to implement decisions will weaken because of the growing power of more radical Palestinian groups.
Israeli Defense Minister Binyamin Ben-Eliezer does not believe there will be a regional war, but acknowledges the conflict with the Palestinians "is a problem that does not seem to have a solution in the foreseeable future."
Mr. Ben-Eliezer says the buildup of Israeli tanks and troops this week on the outskirts of the West Bank town of Beit Jala, is designed to stop Palestinian gunmen from firing into the nearby Jewish community of Gilo. "We consider the shooting through Gilo as something that Israel can not live with," Mr. Ben-Eliezer said. "What we have done is just trying to consider the promise given by Mr. Yasser Arafat that he is trying to guarantee that no one will shoot from there. As long as this will exist, we will keep quiet there. Our presence there is only to guarantee our security, and that everyone will know that there is a line that no one can cross."
Mr. Ben-Eliezer confirmed that he called off a military incursion into Beit Jala earlier this week, after receiving assurances from Palestinians that the shooting at Gilo would stop.
Israelis regard Gilo as a neighborhood of Jerusalem, although the community was built on disputed land captured by Israel in the 1967 Middle East war.
The defense minister says Israel has no interest in reoccupying areas handed over to Palestinian control, but said shooting attacks on areas adjacent to Jerusalem will not be tolerated.