In history class we were studying the break-up of Yugoslavia and the subsequent ethnic conflicts that broke out. One of the articles I read compared the situation in Bosnia to Palestine, and made a number of policy recommendations based on the Palestinian experience of multinationalism for the post-war reconstruction of Bosnia. That got me thinking, would it be possible for that sort of ethnic conflict to break out in Palestine, and if so what would the long-term consequences of such a conflict be.
I suppose one possible PoD could involve the mass influx of Russian and other East European Jews in the 1990s, although as tense as race relations were during that period I find it difficult to believe that it would escalate into outright conflict. Then again they did say the same thing about Yugoslavia.