A negotiated settlement delivered by the peace process will never achieve peace with a two state solution, for the simple reason that critical mass of Palestinian Arabs has proven over and over that they do not want peace or a nation as much as they want to destroy Israel and kill Jews.
Israel would have to establish some type of apartheid upon the Palestinians -- as fake they may be, they are real now. If put into one state with Israel they will out breed them, still commit acts of terror and given the same political clout as an individual can get, elect Israeli leaders.
The two states already exist - Jordan and Israel.
They IS a two state solution: Jordan and Israel.