Wow, I feel as if a tornado touched down on a sewage treatment plant and I’m caught in the middle of the shitstorm. Over 200 posts and you guys still haven’t solved this little Israel/Palestine problem? 
Come on I thought you were smarter than that! 
Seriously, as I see it, nothing gets solved here and in real life because most people, as demonstrated aptly by the posters in this thread, are waaaaay more concerned about dragging up old shit and assigning blame rather than solving the crisis as it is now. **tclouie **asked in his/her first post that people come up with solutions, but immediately there was accusations of bias.
I don’t expect this Israel/Palestine thing to end in my lifetime. The reason I think that is because too many people alive in my lifetime have first or second hand experience of 1948, and things will not change until those people all die off and more apathetic people replace them. No Palestinian who’s house was taken in 1948 can reasonably be expected to not be upset and just give up all that in exchange for an empty dirt field. And no Jew with relatives who died in Hitler’s gas chambers can seriously be expected to allow himself to be that vulnerable ever again. So the blame game will continue.
If I may follow the OP’s request, there is some totally unreasonable things we can do to end the conflict in the near future. It’s a solution, just one that nobody will really accept. My idea of a compromise is when both sides are equally pissed or equally happy. This idea is probably the former.
First, both sides renounce any historic ties. You want to go back 60 years, the land belongs to the Palestinians. 80 years and it’s England’s. 1000 years and it’s the Muslims. 2000 years and it’s back to the Jews. I’m probably missing a lot of groups but the point is, many people have historic ties to the place and historic ties are irrelevent.
Palestine will have to give up their right to return. There simply is no getting rid of the millions of people who they consider stole their homes. None. And if they try to get rid of them, the Jews have nukes. I believe they’d rather use it than get pushed out of their land. So returning is absolutely out of the question.
On the other hand, Israel needs to do to all settlements in the West Bank like they did to some settlements a few years ago and that is forcibly remove the hardline religious nutcases who think they are going to claim a land by staying on it. Shoot them, kidnap them, grab them and throw them in a truck, it doesn’t matter. In fact, Israel needs to mistreat these people in order to show the world they are serious about it. So knock some heads together and remove them all. Give all of those settlements to the Palestinians.
Second, once they have the land, the Palestinians need to be able to do something with it. Israel needs to have a massive relief effort in the West Bank and Gaza to build up their infrastructure. Build settlements, but for the Palestinians instead. Build roads, schools, hospitals, everything.
Third, regarding attacks. It is a given that some crazy people from both sides, but mostly the Palestinian side (yeah, they’re worse, get over it) will try to derail the peace process. In this Israel must stand firm and completely and utterly ignore them. This tit for tat back and forth will go on forever if one side refuses to be a part of the peace process while some on the other side are attacking. So accept that an ignore them. Build hospitals while under attack. Keep giving money to the Palestinian government even if some of it trickles into the hands of terrorists. Basically, do what you need to do to make Palestine a viable country without letting sporadic extremists obstruct the process. That doesn’t mean dont’ try to stop weapons shipments from the border. But realize that Palestine is a sovereign government now. If terrorist want to launch rockets from schools, then accept that the price of retaliation is higher than that of peace and leave them alone to launch their rockets. No Israeli tank or missile should ever be in Palestinian borders for any reason, even if asked (too much of a public relations debacle)
Fourth, tear down the walls and tell your population to take precautions. If you have to give everyone a car and stop the buses completely, then do so. The wall is a visible constant symbol of the oppression that the Palestinians feel, so as long as it is up, they will never be satisfied. Get over the silly obsession with temporary safety: this is about the long term survival of the state. If a dozen people a week have to be blown up, then so be it.
Fifth, Palestine will have to make some tough choices. I don’t care about corruption, I care more about terrorism. Fatah should take over again, with force. They need to round up anyone even remotely associated with Hamas and kill them in the open. Mothers who celebrate their son’s martyrdom should be shot on sight. Basically, they need to completely eliminate the terrorist element from within their own society. Turn the horror of suicide bombings and beheadings onto their own people, but make damn sure you’re only doing it to Hamas and other terrorists. Make sure that people understand in no uncertain terms that anyone to attacks Israel will be punished with death. And all of this must have an Arabic face. No Jew should ever be seen as helping Fatah in this endeavor, Fatah needs to do this on their own.
Sixth, while there is no right of return, Israel needs to voluntarily invite millions of Palestinians back into itself. Building mansions for them. Make sure they are living in better conditions than the average Israeli is now. In fact, give anyone who’s Muslim a mansion, or free cars, or whatever. Anything to placate them. It will show sincerity.
Seventh, because Israel is more powerful, it needs to show more remorse. Pass resolutions in its government to condemn its own creation. Trash their historical figures who was responsible for winning wars against Arabs and Muslims. Have a national holiday week devoted to the Palestinians. Consult Fatah on every foreign policy decision. Don’t just consult them though, give them a voice sometimes. Like, for ever 5 foreign policy decisions Israel makes, let Fatah make one for Israel.
Eighth, Palestinians will have to get rid of any curriculum in schools that teach about 1948 and the times around it. Just completely suppress the history. Be like Stalin. It’s gone. Anybody who speaks about it in public gets arrested. Censor everything that has to do with it. In its place, teach that the country has had “difficult times” but is progressing.
Ninth, Israel needs to give some weapons to Palestine to make it feel like a real state. Like, half the tanks, half the fighters. Take some screws out of them if it makes you feel safer, but Israel needs to arm Palestine. If there’s a war, I’m sure the Jews will still win, so I’m not worried about some mythical destruction of Israel scenario.
Tenth(and remember these are completely unreasonable things that would never happen in real life), they need to throw a massive masquerade party, get thousands of Jews and thousands of Muslims into it, spike the punch, and hope that they all get pregnant and have a ton of mixed babies so that there will be thousands of families with relatives on both sides.