It’s not working too well in relatively peaceful, prosperous places like Belgium, which makes me believe that when people like Tony Judt suggest it for Israel/Palestine, they are either being facetious or really mean “let the Arabs take over and the Jews disperse.”
UPDATE: A seemingly informed commenter says that the Times story is overblown. But there is also a serious movement in Scotland to secede from Britain, and of course Quebec is constantly threatening to succeed from Canada. If groups like these are unhappy being in a single federation, it’s pretty hard to a imagine a happy ending to a binational Israelstine, at least in this stage of the game.