I think it's easier to create a single democratic state than try and make a viable state out of a scattering of postage stamp sized parcels of land surrounded by hostile neighbours.
If it were one state then you'd just have the more powerful faction trying to politically dominate the agenda over the less dominant faction, which is exactly what's happening now. It solves nothing. They each need their own state to have self-determination.
What is needed is for Netanyahu to eff off with the settlement building and act in good faith.
It becomes complicated because Israel gave Gaza back to the Palestinians about 15 years ago and they've used it to launch the rocket attacks from among schools and hospitals as human shields. Then because of that Israel blockades or inspects all the goods coming into Gaza looking for weapons, so Gazans cry foul.
So if you give the West bank back to the Arabs and give them statehood well any independent state needs a military to defend itself, so the possibility of more conflict is there. And there's groups on both sides that won't accept any less than all of the land for themselves and all the people they don't like GTFO. It's a giant clusterf***.