This month Israel marks the 60th anniversary of its founding. But amidst the festivities including visits by international celebrities and politicians there is deep unease -- Israel has skeletons in its closet that it has tried hard to hide, and anxieties about an uncertain future which make many Israelis question whether the state will celebrate an 80th birthday.

Official Israel remains in complete denial that the birth it celebrates is inextricably linked with the near destruction of the vibrant Palestinian culture and society that had existed until then. It's not an unfamiliar dilemma for settler states. The United States, where I live, has found that even the passage of centuries cannot absolve a nation from confronting the crimes committed at its founding.

As the noted Israeli historian and staunch Zionist Benny Morris put it in 2004, "a Jewish state would not have come into being without the uprooting of 700,000 Palestinians. Therefore it was necessary to uproot them." He went on, "there are circumstances in history that justify ethnic cleansing."

But if one is not prepared to openly justify ethnic cleansing, there's only two real options: to deny history and take comfort in an airbrushed story that paints Israelis as brave, divinely inspired pioneers in a desert devoid of indigenous people and beset by external enemies, or to own up to the consequences and support the enormous redress needed to bring justice and peace.

Just before Israel's founding, Palestinians of all religions made up two thirds of the settled population of historic Palestine, while Jewish immigrants, recently arrived from Europe, made up most of the rest.

Among those uprooted was my mother, then nine years old. Now living in Amman, she remembers a happy childhood in her native Jerusalem neighborhood of Lifta. My grandfather owned several buildings and many of his tenants were Jews, including the family who rented the downstairs apartment in their house.

Early in 1948 -- before any Arab states' armies got involved -- she and her entire family, indeed all the inhabitants of several neighboring West Jerusalem areas, were forced out by Zionist militias. On 7 February that year, Israel's founding prime minister, David Ben-Gurion told members of his party, "From your entry into Jerusalem, through Lifta-Romema, through Mahane Yehuda, through King George Street and Mea Shearim -- there are no strangers [i.e. Arabs]. One hundred percent Jews." So it was that the Palestinians became "strangers" in the land of their birth.

Since that time millions of refugees and their descendants who lost their homes, farms, groves, livestock, factories, stores, tools, automobiles, bank accounts, art work, insurance policies, furniture and every other possession have lived in exile, many in squalid refugee camps maintained by Israel and Arab states. Over 80 percent of the Palestinians now besieged and starved in the Gaza Strip are refugees from towns now in Israel. But what Palestinians could never be forced to part with -- and this we do celebrate -- is our attachment to our homeland and the determination to see justice done.

Palestinians all over the world are commemorating the start of our ongoing tragedy, but we are also looking forward. We are at an important turning point, where two things are happening at once. First, despite ritual declarations of international support, the prospect of a two-state solution has all but disappeared as Palestinians in the West Bank and Gaza Strip are caged into walled reservations by growing Israeli settlements and settler-only roads -- a situation that resembles the bantustans of apartheid South Africa.

Second, despite Israel's efforts to keep Palestinians in check, the Palestinian population living under Israeli rule is about to exceed the five million Israeli Jews. Today there are 3.5 million Palestinians in the West Bank and Gaza Strip, and another 1.5 million Palestinians who are nominally citizens of Israel. Sometimes called "Israeli Arabs," Palestinians in Israel are increasingly restive about their second class status in a Jewish state that regards them as a hostile fifth column. While Palestinians in Israel call for equal rights in a state of all its citizens, some Israeli Jewish politicians threaten them with expulsion to the West Bank, Gaza Strip or beyond.

Official projections show that by 2025, Palestinians, due to their much higher birth rate, will exceed Israeli Jews in the country by two million and though few in the international community have woken up to this reality, a surgical separation between these populations is impossible.

Israeli leaders understand what they are up against; Prime Minister Ehud Olmert said last November: "If the day comes when the two-state solution collapses, and we face a South African-style struggle for equal voting rights, then, as soon as that happens, the State of Israel is finished."

This struggle has already begun as more and more Palestinians, recognizing that statehood is unrealistic, debate and adopt the one-state solution, offering Israelis and Palestinians equal rights in the land they share. Last year, I was part of a group of Palestinians, Israelis and others who published the "One State Declaration." Inspired partly by South Africa's Freedom Charter, we set out principles for a common future in a single democratic state. Most Israelis, unsurprisingly, recoil at comparisons with apartheid South Africa. The good news for them is that the end of apartheid did not bring about the disaster many feared. Rather, it was a new dawn for all the people of the country.

Co-founder of The Electronic Intifada, Ali Abunimah is author of One Country: A Bold Proposal to End the Israeli-Palestinian Impasse (Metropolitan Books, 2006). A version of this essay was originally published by The Sydney Morning Herald.