I like to think the word "knot" in the song's title references the gordian knot alexander the great broke prophesising his conquest of persia; and the line "unsheath your swords and tame the eagle's beast" is a second allusion to this as alexander 'untied' the gordian knot by unsheathing his sword after every other option was expended. However the lesson from that act wasn't that he used brute force to get his way, but rather that he thought outside of the box and tried the seemingly obvious method that had escaped all of his predecessors. As the rest of the song renounces war, advocates fighting with words in a land of constant violence I would say that "unsheath your swords" ironically means the opposite. Put down your weapons and protest in peace and only then can jerusalem be home to all creeds.

The song is about the ongoing conflict between palestine and israel and how the bloodshed affects people and how much better their lives would be if they settled their differences with the two-state solution which is pointed out in the line "yes it's the two-state solution". He seems to be a bit harsher on israel though by throwing in the lines "holocaust, you've tasted great fear. " and "have you forgot the wall? " meaning the western "wailing" wall of what remains of their temple that was destroyed by war.