The facts that Israel has created on the ground is making it next to impossible to have a two state solution. I suggest you watch this 13 minute segment from CBS 60 Minutes program from last January.
The Palestinians are willing to accept a 2-state solution, where they establish their state over 100% of the West Bank and Gaza Strip (all lands militarily occupied by Israel in 1967 including East Jerusalem), and that state to be 100% sovereign over its borders and resources. They also want the right of return and compensation for the refugees who were forced out of their homes in 1948 war. That is a huge concession considering that the West Bank and Gaza make less than half of what was allocated to them in the 1947 UN Partition Plan. This is also the offer from King Abdulla of Saudi Arabia.
The Israeli offer on a 2-state solution differs hugely from the Palestinians’ expectation. Israelis offer:
1) Only parts of the West Bank and Gaza Strip
2) No East Jerusalem
3) No borders with the outside world
4) Majority of illegal settlements in West Bank to be annexed to Israel
5) No return for refugees
6) Water resources in the West Bank to be shared with Israel (currently Israel took over 83% of the water resources in the West Bank to the settlers who make 12% of the population of the West Bank)
I think the best and fairest solution that can achieve a lasting peace is a one-state solution as follows:
1) Unify the West Bank, Gaza Strip with Current Israel as one country
2) All citizens of the new country will have equal rights regardless of faith (no privileges based on faith to any)
3) Palestinian refugees are allowed to return to their country (if they wish) and be compensated for their losses.
4) Jews who left Arab countries are allowed to return to their original countries (if they wish) and be compensated for their losses.
Can people of different religions and ethnic backgrounds live peacefully together?
Yes, if you keep outsiders from interfering. Look at US, Malaysia and Lebanon. Lebanon civil war in 1980’s was caused by outside interference.
It would be if the leaders of both sides would stop being so prideful and actually begin talks with reasonable terms for each other. The large majority of average people in both Israel and the Palestinian Territories want the fighting to end and would settle for a two state solution.
they have been fighting since the BCs so i doubt it is ever going to stop