Should Jews face outwards to the world or turn inwards?

Obviously, we need to be of the world as we are in the world, but should not fall into bad company. Obviously, righteous Jews should shun the company of unrighteous Jews as well as unrighteous gentiles, but who is a righteous gentile? Obviously, each gentile should be judged on his or her own merits. The Noahide laws are a way of measuring the righteousness of gentile nations through the conformity of their legislation to the Noahide laws. There is a rabbinical consensus that Islam is the most Noahide of all the gentile religions and Christianity the least because of its idolatry and blasphemy, less Noahide than even obviously idolatrous Hinduism. It is also abundantly clear that rabbis refuse to rank the four gentile religions so that Islam is top of the tree and Christianity bottom of the heap because Jews do not want to risk offending their Christian overlords whose Christian Zionism support the secular State of Israel, the only liberal democracy in the Middle East.  

The territorial dispute between Israel and Hamas is really a red herring. It is clear that there nothing the secular State of Israel can do that will satisfy the unstated grievance of the Palestinian Arabs. Hamas are too polite to say this, but they are trying to tell Israeli Jews that just as in Rome you must do as the Romans do, in the Middle East you must also do as the Middle Easterners do, and that is to live under sharia. Perhaps Hamas does not even know that this is what they want, but what else could it be?

And once Israel is a theocracy of some sort, a one state solution can become possible. 

The world already knows that Jews have not lived in their own theocracy for 2000 years and that half the world population of Jews are secular.

The world that also knows about the history of Jews would also expect Israel of all places should be a theocracy, but they also know that most Israelis worship the idol of liberal democracy with its clay feet rather than Hashem.

If Jews are indeed fit for the purpose of being light unto the nations as a kingdom of priests, then Israeli Jews are religiously obliged to live in a theocracy. I don't think God is much fussed about whether it is a Torah theocracy or a Koran theocracy as long as it is a theocracy. Israel just has to apply for permission from the Americans to become a theocracy to go through the proper channels. It seems likely that the application will be granted because Americans are also tired of liberal democracy and enough of them might even relish the opportunity of considering whether to become one itself as its Declaration of Independence and Washington's valedictory speech hints it should be.