We argue that there is a new liquid phase in the two-dimensional electron system in Si MOSFETs at low enough electron densities. The recently observed metal-insulator transition results as a crossover from the percolation transition of the liquid phase through the disorder landscape in the system below the liquid-gas critical temperature. The consequences of our theory are discussed for variety of physical properties relevant to the recent experiments. . This raises questions of whether the system can be described by a theory for homogeneous systems. (See the discussion on electric field dependence in the text for more detail.) As we argue in this letter, the mobile positive background in Si MOSFETs allows macroscopic inhomogeneity to occur more easily at low enough average electron densities. The metal-insulator transition, the small field nonlinear I-V, as well as a host of other phenomena result from the combined effect of the inhomogeneity and the disorder in the system. In a remote doped or modulation doped GaAs/AlGaAs sample, the electron system is well described by the classic jellium model of electron gas. The roughly uniform positive background is fixed by the bulk crystal and it does not participate in the dynamics of the
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