With Israel and the Palestinians locked in a perpetual, endless cycle of violence, a solution to the conflict seems remote and unlikely. The incessant fighting will end only if one side or the other were wiped out, but the Palestinians can't accomplish this and the Israelis wouldn't try. Diplomats have proffered other options, of course, the most frequently discussed plan is the two-state option wherein the Palestinians create a state that includes the West Bank and Gaza.
Neither party is keen on the idea, however, since the Israelis are frightened of the threat posed by a sovereign Palestinian state on their border and Palestinians want more territory from Israel than just the West Bank and Gaza. They also want the "right of return," the right of millions of descendents of those Palestinians who fled the region in 1948 when the Arab states surrounding Israel told them to get out of the way of their impending invasion of the nascent Israeli state. Of course, Israel would cease to exist if they were inundated by millions of poor, illiterate, and exceedingly hostile Arabs and could never grant such a right.
Another alternative being talked about is the "no-state solution" which is, I think, being pushed by people like Daniel Pipes. Here's Strategy Page's description of this plan:
Instead of continuing the arguments over the 1967 borders, why not go back to the 1967 politics. In short, convince Jordan to take back the West Bank (which it ran until 1967, and claimed as lost territory until 1988, when it ceded control to the "Palestinians"). Convince Egypt to take the Gaza Strip (which has been part of Egypt for most of the last few thousand years). Israel and Jordan work out a deal, perhaps with some international organizations, for running Jerusalem. Then get the Arab states to stop treating all the Palestinians like refugees, and absorb them (as Israel did for all the Jews driven out of Arab countries after the 1948 Arab-Israeli war).
Egypt might seem an unlikely host for 1.5 million Arab refugees in Gaza. But Egypt is well aware of the fact that Gaza is becoming a refuge for Islamic terrorists who direct their attacks at Egypt as well as Israel. If Egypt wants to deal with that problem, the best way is to make all those refugees Egyptian citizens, and subject them to Egyptian law (and counter-terrorism efforts, if need be).
And let us not forget how the problem started. The Arabs that left what-is-now-Israel in 1948 were convinced by the Arab countries to remain refugees for 60 years, on the promise that the Arab world would crush the new state of Israel. That didn't happen and isn't likely to happen anytime soon. The Arab world has been getting more and more impatient with the Palestinians and their inability to get along with each other, rule themselves, or work out a deal with Israel.
So let's just admit that the two-state solution isn't going to work, give the Arab refugees (actually, their children and grandchildren) a place to call home (the places where they are living now) and move on. The alternative is more head-butting by the Arab radicals (Palestinians, mainly) and misery for the refugees who, if they were treated like the 1948 Jewish refugees, would be a lot better off today.
No one is optimistic that the Palestinians, Jordan or Egypt will accept such a plan. Jordan and Egypt no doubt want nothing to do with trying to absorb and govern the fractious Palestinians, and the Palestinians will settle for nothing less than the destruction of Israel. The most realistic view of the Middle East, in my opinion, is to be a pessimist about peace ever breaking out in this region. Too much blood has been spilled and too much hatred exists for there ever to be peaceful co-existence between Israel and the Palestinians. At least not in our lifetimes. At least not unless there's a miracle.
RLC