Israeli authorities on the West Bank have established a pair of "Palestinian only" bus routes, meant to take Arab residents of the West Bank to their jobs in Israel. The Israelis say this was done for reasons of efficiency -- more and more Palestinians are working in Israel, and their communities are currently ill-served by existing bus lines. Critics say that the lines were established because Jewish settlers who live in neighboring communities don't want to ride buses with Palestinians. Both arguments are probably true.
These bus lines are, of course, an embarrassment to Israel, but I do not think their establishment is significant beyond their obvious symbolism. Why? Because they represent only one symptom of the real problem, which is that Israel cannot not, and should not, maintain two separate systems -- separate-but-equal, or separate-but-unequal -- for Jewish residents of the West Bank, and Arab residents of the West Bank.
The actual issue is this: Jewish residents of Hebron, to take a vivid example, are Israeli citizens, and they have the franchise -- they are full citizens of the state that governs their lives. Their Palestinian neighbors -- quite literally neighbors, in the case of Hebron, because Arabs and Jews there sometimes live within 10 or 15 feet of each other -- fall under a different set of rules. Though the Palestinians in the West Bank have varying degrees of self-government, their lives are still controlled in many ways -- their freedom of movement, most obviously -- by a government that they do not get to choose. This is the confounding dilemma created by the movement of Jewish settlers into the West Bank, and the refusal of Israel to extend voting rights to the Palestinians it inherited after the Six-Day War.