The issue is a complex one, but stated briefly, if current demographic trends continue, Jews will cease to be the majority population even within pre-1967 Israel within the next 40 to 50 years. A younger Arab population with a far higher birthrate makes this almost inevitable, even if there is continued immigration from the Diaspora. This fact creates a great deal of anxiety among all segments of the Israeli polity.
I believe this quote gives insight to the current situation between Jews and Arabs and gives insight on the future between the two. It explains that the high birthrate of the younger Arab leads to anxiety among the Israeli polity. They fear that this birthrate will lead to the Arab population to surpass that of the Jewish population. They believe that this change in population will eventually lead to Israeli control on the area to come to an end. There are many solutions being thought up for this problem but all of them will most likely lead to more conflict between the two groups, which shows how peace does not look likely for the foreseeable future.