Yair Lapid, the leader of centrist Israeli opposition party Yesh Atid, has said in a briefing to journalists in London that the current violence puts the future of co-existence with the Palestinians in doubt.
Mr Lapid, who was in the UK this week on a public diplomacy mission, said: "If this is a society that is going in a Daesh direction, then we don't want to live with them.
"Many Israelis are thinking: we need a real separation, we don't want to see them any more."
Mr Lapid stressed that while the ultimate goal should be a negotiated two-state solution, "we do need the security arrangements to ensure that there will be no [Gaza] disengagement number two - this is to be discussed".
Asked whether the current violence undermines the idea of a unified Jerusalem, he said: "It's our capital. People are saying maybe you should reconsider whether it's your capital, or maybe half of your capital. I don't think countries do that.
"A few weeks of stabbings will not change this policy."
Mr Lapid also hit out at Palestinian Authority President Mahmoud Abbas for inciting terrorism. "He is riding the tiger. He spoke about Jews in racist language. He has miserably failed his own people and is using them to score political points."
The MK admitted that more could be done to improve municipal services in east Jerusalem, but refused to count Palestinian living conditions as a causal factor in the violence.
"These are attacks by young, self-radicalised people. They are religiously orientated and influenced by social media," he said.
He also attacked the Western media for its reporting of the terrorism. "Journalists are writing about new phenomena using old tools."
The politician emphasised that foreign reporters need to understand the fear that has gripped Israelis.
"I have three children in Israel. They are frightened, afraid to go out on the streets. Nobody knows where this is going or how long it will last."
While in London, Mr Lapid met Foreign Secretary Philip Hammond, and asked him to help Israel defeat the Unesco vote on a resolution that designated the Western Wall part of Al Aqsa mosque. In the event, the Al Aqsa proposal was dropped from the resolution.
