Israel is bracing for trouble over the Palestinians' expected move to declare statehood this month but there are fears that the real crisis will come from growing influence of right-wing Orthodox Jews in the Israeli armed forces, particularly the army.

This is reaching such proportions that Maj. Gen. Avi Zamir, until recently the chief of the military's Personnel Directorate, warned the General Staff that religious extremism must be stopped before the character and ethos of the military as a national institution is eroded beyond repair.

The deepening national split between religious and secular Jews ultimately imperils the future of the Jewish state itself.

"This is no longer Israel," leading historian Benny Morris lamented recently.

"A profound, internal, existential crisis has arrived. It stems in part from the changing nature of the country, more right-wing, more restrictive, far less liberal and far less egalitarian. Many moderate Israelis fear the country is heading for ruin."

The infiltration of the military by religious zealots has been under way for three decades. Much of the officer corps -- up to 30 percent by some estimates -- consists of men from extremist religious groups.

Some army units, including elite combat units, are entirely made up of religious soldiers, many of them from West Bank settlements.

"I think that Israel's coming to a juncture where it has to answer the significant question of whether it wants to continue being a Jewish, democratic, Zionist, modern, enlightened state or shall we turn into a rabbinical 'Judeastan'," said Rafi Mann, who teaches communications at the Ariel University Center of Samaria.

"I see what's happening in the army as a sign and it's very worrying."

In October 2008, the liberal Haaretz newspaper reported that the Chief Military Rabbinate under direction of Brig. Gen. Avichai Rontzki, a hard-line West Bank settler with links to far-right extremists, had expanded its educational activities to army combat units.

"In a number of cases it's religious brainwashing and, indirectly, also political brainwashing," the daily quoted one officer as saying.

The military has come under intense international condemnation for alleged war crimes committed during the December 2008 invasion of the Gaza Strip in which some 1,400 Palestinians were killed, most of them civilians.

Before attacking, rabbis handed out pamphlets calling for the establishment of Greater Israel and urged soldiers that "when you show mercy to a cruel enemy, you are being cruel to pure and honest soldiers."

Modern Israel is barely recognisable from the country I was first posted to 25 years ago. Then, the overwhelming consensus favoured peaceful co-existence with its Arab neighbours. Shimon Peres, the Labour leader who now serves as Israel’s president, was at the forefront of official efforts to make peace with the country’s enemies, which ultimately resulted in the signing of treaties with Egypt and Jordan.

In my district of Jerusalem, Jews and Arabs lived happily side by side; it was not uncommon for Palestinians to babysit Israeli children while their parents enjoyed a night out, perhaps at one of the Palestinian restaurants that catered for Israeli tastes.

Today, the divisions between the communities are so entrenched as to make such cosy arrangements unthinkable. The current attitude is better reflected by a recent rabbinical edict that forbids Jewish landlords from renting properties to Palestinian tenants.

Much of the officer corps -- up to 30 percent by some estimates -- consists of men from extremist religious groups.