When Tom Segev wakes up in the morning, he can see Jerusalem’s Old City through his apartment window.

His smile — and the way the historian and Ha’aretz columnist holds his hands apart as if to frame the scene — betrays his obvious pride. But from his apartment window, Segev can also see something that does not exactly make him swell with pride.

“You walk the streets of Jerusalem today, you see all the walls are covered in black graffiti: ‘Arabs out,’ ‘Arab-Terrorist,’ ‘Expel the Arabs.’ We are becoming more fearful, and fear is a very bad thing for democracy. I’m very angry the municipality doesn’t send somebody to clean it up,” said the 58-year-old author of “Elvis in Jerusalem” and “The Seventh Million: The Israelis and the Holocaust.”

Segev — a droll and extremely soft-spoken man who bears a striking physical resemblance to Hunter S. Thompson — addressed changes in Israeli society caused by the intifada in a speech last week at Congregation Emanu-El, co-sponsored by the New Israel Fund and the San Francisco congregation.

His prognosis: Terrorism has killed more than just innocent people.

“Politics is dead in Israel. Labor is dead. The opposition doesn’t exist, and these are not good things,” said Segev, who welcomed the dissolution of Prime Minister Ariel Sharon’s national unity coalition.

“You need an opposition, a democracy needs an opposition. It’s not a good thing when everybody speaks with one voice.”

Segev admits he was blinded by the hope of the Oslo accords until “it blew up in our face.” In retrospect, the collapse was hardly a surprise, as “Palestinians gained absolutely nothing from the peace process.” The exceptions are members of “the limited oligarchy of that corrupt and inefficient system of Arafat’s.” Continued Israeli settlement building didn’t help either.

When it comes to the blame, there’s plenty to spread around and Segev dispenses it liberally.

He faults the world at large for awarding Yasser Arafat billions of dollars with no strings attached. He chides Arafat for using that money to “buy 50,000 guns and not 50,000 computers…he wasted all that money. Now he says Israel is destroying the Palestinian infrastructure, but that’s not really true. There’s nothing to destroy.”

Segev faults Benjamin Netanyahu’s hawkishness and the “Napoleonic meglomania” of Ehud Barak (who wished to impose a final peace upon Arafat in order to gain entry to the pantheon of great Israeli leaders). He also criticizes the ideological rigidity of Sharon, “who for his entire life has seen the Arabs through the gun.”

There will be no peace, Segev prophesies, until Arafat, Sharon and President Bush are gone.

“We definitely need deeper involvement from the U.S. and one of the things I think many Israelis find disappointing about President Bush is he doesn’t get involved in the Mideast,” said Segev.

“He does not care about the Mideast and he supports Sharon, which is a really bad combo.”

Segev saw former President Clinton as “a very honest broker, perhaps too honest for these two clients, Arafat and Barak.”

He also wishes Israel and the Palestinians could go “back to square one,” and restart the 1993 Oslo peace process, which he calls a good idea that was thoroughly mismanaged. But he acknowledges that few Israelis these days share his hope.

The Oslo process, believes Segev, worked hand in hand with the Americanization of Israel. While that term is usually a pejorative one — especially in Europe — Segev sees it as a good thing.

“It means much more than a Hebrew Internet and a kosher McDonald’s,” he said with a chuckle.

“It means we are adopting the American rights of constitutionalism, democracy, equal rights, rights for women, right for minorities. It means we adopt the concept of professionalism, less of the Israeli makeshift atmosphere. More planning and less improvisation, all of these things are good for us.”

Americanization will lead, ideally, to a post-Zionist situation in which Israelis do not live for an ideology but “for life itself.”

Or Israel could lurch to the right, making the anti-Arab slogans smeared on the walls near Segev’s home more than just graffiti.

“I would lose the ability to identify myself as an Israeli if we expelled the Arabs. This is not done in my name. The occupation of the West Bank involves systematic violations of human rights which are a cause of great concern, but the massive expulsion of the Arabs would be more than I could take,” he said.

Yet, on the other hand, “I don’t live in Israel on condition and Israel doesn’t exist on condition.”

And Segev would hate to leave a country where you “have the feeling you are shaping something new. There are lots of places that are very boring in this world. Ours is very exciting.”

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Joe Eskenazi is the managing editor at Mission Local. He is a former editor-at-large at San Francisco magazine, former columnist at SF Weekly and a former J. staff writer.