Israel, he warned, faces a demographic threat. There are 5.7 million Jews and 1.4 million Arab citizens in Israel and its West Bank settlements, according to Israel's Central Bureau of Statistics; the bureau's Palestinian counterpart tallies nearly 3.8 million Palestinians in the West Bank and Gaza.
By 2025, Israeli demographer Sergio Della Pergola predicts, Jews will make up no more than 46% of the people living between the Jordan River and the Mediterranean Sea, an area slightly smaller than Maryland.
Rid of the territories, Olmert told reporters in November, Israel would have a sustainable Jewish majority within its borders, enabling it to preserve its Jewish character within a democracy.
"If the day comes when the two-state solution collapses and we face a South African-style struggle for equal voting rights, the state of Israel is finished," he said.
But resistance to a two-state accord has risen not only from right-wing allies of Olmert who support continued Jewish settlement in the West Bank but also from Ehud Barak, who leads the dovish Labor Party.
As prime minister in 2000, Barak made Israel's first concrete offer of a Palestinian state. (Yasser Arafat rejected his terms.) Now defense minister, Barak has privately dismissed the current talks as "a fantasy."
Until Israel upgrades its missile defenses, which could take several years, Barak says, he favors keeping troops in the West Bank and continuing frequent incursions into Gaza. Israel withdrew its army bases and civilian settlements from Gaza in 2005.
Many Palestinians take Barak's shift as a sign that independence is unattainable.
Kawasmi, the former Palestinian Authority official, said his moment of disenchantment came last year in June during an encounter with Israeli peace activists at an unofficial Middle East forum in Italy.
The Jerusalem native had been campaigning 15 years for an independent Palestinian state. The dream had brought him home from studies in England in 1994 to help the newly created Palestinian Authority set up a ministry of economy.
But the Israeli peaceniks dismissed two cherished Palestinian aspirations. Like Olmert's government, they wanted to avoid talk of giving Palestinian refugees and their families the right of return to homes in Israel that they fled in 1948 or of sharing Jerusalem as capital of both Israel and a Palestinian state.
At that moment, Kawasmi said, he realized "there is zero chance" for a two-state solution. He didn't sleep well for months. Then he embraced the single-state option, which had been debated for several years among Palestinians living abroad, and set out to create a buzz for it in the territories.
Several dozen intellectuals and activists are engaged in the debate, in books, newspaper articles, seminars and discussions on such websites as Electronic Intifada. Some call for a power-sharing government, others for a federation with separate administrations for Palestinians and Jews.
Sari Nusseibeh, president of Al Quds University in Jerusalem, suggests that many Palestinians would feel more at home in a democracy shared with Israelis than in a Palestinian state run by Hamas.
A bi-national system, Nusseibeh said, would "need to come about by consent and not by force; it will need a complete new strategy and thinking."
Perhaps after decades of fruitless bloodshed, he said, "we might find ourselves having no option but to coexist within one state."
A single state, other proponents say, would resolve disputes that have long bedeviled peace talks. Jews could keep their settlements, the thinking goes, but Palestinians, now restricted to a disproportionately small area, could live and travel anywhere the country. So could returning Palestinian refugees.
Most Israelis dismiss single-state proposals as recipes for dystopia or tactics in a Hamas-guided scheme to overrun the Jews and impose Islamic rule.
"Such an idea of one country with two peoples, it will never happen," said Benjamin Ben-Eliezer, the infrastructure minister. "Bloodshed will happen. The Arabs will not accept us. We will not accept them."
But Palestinians who favor the idea say they would have no problem living with Jews as equals. If Jews were to give up their superior status and allow Palestinians the right to vote and move about the country, they say, Islamic extremists would lose their appeal.
"I'm envisioning a state where Jewish, Muslim and Christian communities live equally with full rights," Kawasmi said. If Israelis cannot accept that, "it's up to them to face an Islamic power that will not accept them."
It might be months or years, he acknowledges, before Palestinian leaders embrace the single-state vision and another generation before Israelis take it seriously. He plans to spend the year hammering out a detailed proposal and getting it launched by a political party, even if he has to start one himself.