I think a two state solution could be agreed. Jerusalem as the undivided capital and the complete sovereignty of Palestine, i.e. they control their own borders.
I admire people who can be optimistic about these sorts of situations. I just don't have it in me. Palestine looks utterly doomed to me. Israel are paranoid beyond reality about them as it is - they could never allow Palestine to be a sovereign nation with an actual army of any sort.
I fear Hamas could be a stumbling block however, as they don't want a two state solution.
Who wouldn't in their shoes? If you're that poor 10 year old girl in one of the videos, half starved by the blockades, and now your homes just been shelled to rubble it'd take a heck of a strong ethical mind to start philosophically defending Israel's rights to exist and defend itself.
Again, I can't help but think the whole situation is just doomed to perpetuate. How can either of these sides ever trust or forgive one another enough to back off? I suppose it must be possible somehow, someone earlier mentioned Northern Ireland and the Good Friday agreement. It's just so difficult to imagine it from where it all is now.