“And the Palestinian people will wake up tomorrow and find that little about their lives has changed, save that the prospects of a durable peace have only receded.”Leave aside whether or not one feels that either or both sides are entitled to the actions that they've recently taken. The fact of the matter is that each side comes across as intent on thumbing their noses at the other.
Ambassador to the United Nations Susan Rice on the successful Palestinian bid to become a nonmember observer state of the United Nations.
U.N. Assembly, in Blow to U.S., Elevates Status of Palestine
“These activities set back the cause of a negotiated peace.”
Secretary of State Hillary Clinton on renewed construction of Israeli settlements in the West Bank.
Housing Move in Israel Seen as Setback for a Two-State Plan
Perhaps the single biggest obstacle to an agreement is that it really doesn't appear to be in the interests of either side to work with the other. For starters, it's difficult to look at the back-and-forth between the two sides and conclude that either of them really has any faith in the other to either bargain in good faith or live up to any agreements reached. Secondly, both sides have political constituencies that are opposed to the entire process. (Even if the factions on both sides who believe that they are the sole rightful owners of the entirety of the former Mandate of Palestine are in the minority, they are loud, vocal and active minorities. And in politics, that counts for a lot. While there may very well be Israelis and Palestinians who, were they to sit down in a room together, could hammer out a workable compromise, if they can't get into office on that because the hard-liners mobilize the votes to prevent it, it does no-one any good.) And both sides think it's worthwhile to go for the win. Compromise is what happens when people are tired of fighting - one side realizes that it can't win, and the other concludes that complete victory isn't worth the added costs. That both sides continue to antagonize the other means that they aren't really at that point.
Neither side is going to get what it wants. The simple realities of human nature are arrayed against them. Perhaps what this needs is a change in approach. Because no-one wants to be involved, Israel and Palestine simply hammer away at one another without making any progress. Maybe what needs to happen is that a different nation - say, Japan - calls in the top three allies of each side, and has THEM work out a compromise, with the idea that when one is reached, the allies of the two parties will be on the hook for doing the arm-twisting required to make each side accept.
Okay, so that's not the best idea. But it can't do any worse than what we have happening now. And considering that the international community started with without consulting with either side, maybe that's what needed to end it.