This chapter analyzes the three pertinent dimensions of binationalism—pyschological self identification, political reality and the legal structure as they apply to Israel. In February 1896, the first edition of Theodor Herzl's book Der Judenstaat appeared in Vienna. The creation of Israel some fifty years later made Herzl's dream a reality. At the core of the debate is the balance between the group and the territorial membership of Israel. The traditional socialist Zionist ideology has always emphasized the supremacy of a Jewish uninational state over any territorial consideration. The discussion on a uninational as opposed to a binational state has rapidly emerged as the most important legitimization debate in Israeli society. Even in cases in which a national state has evolved, the presence of ethnic challenge groups may belie its uninational character. When such a challenge is successful a national state must transform itself into a binational one or breakup.