A Palestinian man argues with an Israeli soldier during a protest against the Israeli separation wall in the West Bank village of Deir Al-Ghosoun, near Tulkarem. (Mouid Ashqar, Maan Images)

In the circles of Middle East peacemaking it is called "coexistence", the often difficult and usually pioneering work that brings together Jews and Arabs, treats them as equals and tries to bridge their differences.

There are organisations that run bilingual Jewish-Arabic schools, including one in Jerusalem. There are joint business projects, musical ventures and even comedy shows.

In Jaffa, south of Tel Aviv, the small Yaffa cafe and bookshop became the first store in the mixed Jewish and Arab city to sell Arabic books since 1948. It brought a rare, mixed clientele to its wooden tables and won an award for promoting dialogue. Next month, Joe Cocker will perform at a high-profile "coexistence festival" featuring Jewish and Arab musicians in Gilboa, in northern Israel, which will also include a children's "Bible-Koran quiz".

These projects do much to challenge the broader exclusion and discrimination suffered by Arab citizens of Israel. But those involved say it is much easier to bring Jews and Arabs together within Israel than to bridge the larger gap between Israel and the Palestinian territories. In this small and bitterly contested slice of Middle Eastern soil that is home to around 10 million Jews and Arabs, genuine and equal coexistence between the two peoples is rare. Instead, separation is growing ever more entrenched.

It begins with a physical divide, the steel and concrete barrier that runs along and deep into the West Bank, and the restrictions, checkpoints and closures of the 41-year military occupation. Then there is the dramatic reduction in the Palestinian workforce in Israel, rapidly being replaced by 200,000 foreign migrant labourers - Filipinos, Thais, Indians and others. With that comes an economic separation, a marked decrease in joint business initiatives or shared markets or even banking relationships. Then develops the cultural separation that means the only Israelis seen by most Palestinians are soldiers or settlers, and the only Palestinians seen by most Israelis are militants on the television news or the occasional worker on a building site.

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Abdul Latif Khalid is a highly qualified engineer and hydrology specialist who lives in the West Bank village of Jayyus, which is close to several Jewish settlements and which has lost much of its farmland to the barrier. "You see settlers but as if there are two worlds," he said. "You see a Palestinian community neighbouring a settlement but both are looking to each other as enemies not friends or neighbours. This is the problem with the wall as separation and this is why we say in the end the wall will create hatred."

Perhaps inevitably, the concept of separation has crept into discussion of what a future peace agreement between Israelis and Palestinians might look like. Often, Palestinians involved in joint initiatives face censure within their own community and are accused of acquiescing in the Israeli occupation, a process described with the derogatory word "normalisation". It is particularly so now, when the idea of a two-state solution is being rejected by some Palestinians in favour of calls for a single, bi-national state in which all would have equal citizenship rights. Sometimes ventures simply collapse under the weight of criticism.

In terms of protecting its own population from terrorist attacks, Israel argues in favour of the barrier and of the need for separation between the two sides. Many Israelis, particularly on the right wing, argue forcefully for a separation imposed on their own terms. "The majority of Israel wants to be apart from the Palestinian state," Dov Weissglas, a Tel Aviv lawyer and long-time ally and adviser to the former prime minister Ariel Sharon, said in an interview with the Guardian late last year. "We speak about non-belligerence, the kind of peace we have with Egypt, with Jordan. You can count on the fingers of one hand how many Egyptians came to Israel to enjoy that peace but nobody cares because not one single Israeli soldier was killed on the Egyptian front for the last 30 years, God bless them and us. That's what we need. The exchange of operas can be delayed."

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