I feel like this admittedly old but still very relevant piece by Edward Said makes some good points. Notably:

What exists now is a disheartening, not to say, bloody, impasse. Zionists in and outside Israel will not give up on their wish for a separate Jewish state; Palestinians want the same thing for themselves, despite having accepted much less from Oslo. Yet in both instances, the idea of a state for ‘‘ourselves’’ simply flies in the face of the facts: short of ethnic cleansing or ‘‘mass transfer,’’ as in 1948, there is no way for Israel to get rid of the Palestinians or for Palestinians to wish Israelis away. Neither side has a viable military option against the other, which, I am sorry to say, is why both opted for a peace that so patently tries to accomplish what war couldn’t.

and

The beginning is to develop something entirely missing from both Israeli and Palestinian realities today: the idea and practice of citizenship, not of ethnic or racial community, as the main vehicle for coexistence. In a modern state, all its members are citizens by virtue of their presence and the sharing of rights and responsibilities. Citizenship therefore entitles an Israeli Jew and a Palestinian Arab to the same privileges and resources. A constitution and a bill of rights thus become necessary for getting beyond Square 1 of the conflict because each group would have the same right to self-determination; that is, the right to practice communal life in its own (Jewish or Palestinian) way, perhaps in federated cantons, with a joint capital in Jerusalem, equal access to land and inalienable secular and juridical rights. Neither side should be held hostage to religious extremists.