George Bush, Tony Blair and Mikhail Gorbechev are among the international dignitaries who will be in Jerusalem next week to mark Israel's 60th anniversary. The landmark event has produced both a joyous celebration of extraordinary progress and somber reflection on what's to come. A tiny country has become a haven for Jews, a world capital of culture and technology and a nuclear power. But it's surrounded by hostile neighbors, internationally criticized for treatment of the Palestinians and beset by uncertainty about its future identity. With an Arab population that's growing fast, can Israel be both democratic and Jewish? What are the prospects for a "two-state solution?"