I believe it is important to start recognising the right of Israel to exist as a state, however ambiguous was its beginning. It is obvious we cannot go back to the situation before 1948.
Also, I really doubt a two state solution is viable anymore. A short glimpse at the Schweitzer-like map of West Bank above, with the separating wall of shame, with all the Israeli settlements and roads, built on stolen Palestinian land, should convince you of that. Peace and occupation, with its apartheid-like separation is totally incompatible with peace. Violence, on both sides, as condemnable as it is, is unavoidable if the present status quo continues.
The right to return for the over 700,000 Palestinian pushed out of their homes in the Nakhba is very problematic, and controversial, because of its demographic implications, which would make impossible the present anachronistic and unsustainable definition of Israel as an ethnic state. But its a priori refusal by the Israeli government makes impossible for the Palestinians to accept the right of Israel to exist.
The reality is that there are no sincere negotiations between the Israeli government and the Palestinian Authority, at this time, and both sides are to blame, but especially Israel for whom negotiations is a mere game of gaining time for creating ‘facts on the ground’ – meaning more and more settlements, which will make impossible the existence of a viable Palestinian state. But, as I said before, that is already impossible.
On the other side, Israel will negotiate only if they are pressed to do so by the US and the Toika. However, both Obama and Blair are too captive to the Jewish lobby to make any significant contribution in this direction.
The solution that really worked in the case of the fall of apartheid in South Africa was boycott and divestment, but the the memory of the Holocaust is still too fresh in the minds of the civilised world for this to really be largely accepted. And, thus, may not be as effective in this case, although, I think fully justified ethically, as it was in the case of the racist government in South Africa.
So, if there is to be peace in the region, the one state solution seems to be the only feasible solution at this moment, even if this will obviously make totally impossible the (foolish, in my estimation) dream of an ethnic (and possibly religiously segregated) Jewish state of Israel. If Israel wants to join the civilised world, they have to renounce the foolishness of the racist ideology of Zionism.
But will there be peace in the (not so) holy land when Christ returns? That is hard to know, but not entirely impossible.