Civil Wars almost always end with a zero-sum result.
A "Civil War" by definition is an intra-state conflict. And since the disputed territory cannot be sensibly divided between the Israelis and the Palestinians the only alternative is to combine them and establish the principle of Federalism as understood historically in the United States prior to Lincoln.
Now look, I am not saying this is a panacea. Think Yugoslavia as an historical model. That did not end well. But since the downside is so obvious let's at least consider the upside.
The problem of Jerusalem is solved. It becomes the Capital of the Federal Republic (like D.C.). The Israeli State exists within its currently established borders. The Palestinian State or possibly State(s) are established along the borders of the West Bank and Gaza. A Constituent Assembly with appropriate power arrangements designed in my view largely to produce stalemate on all but the commonly agreed to issues between the parties is established. And for matters internal to the States the existing Israeli political structure remains and the P.A. essentially grows into a similar role for the Palestinian State (or States) .
Again, this model does not guarantee a happy outcome. Lebanon is another only marginally successful example of this solution. But if the parties are tired of the status quo it just might work. After all the Israelis and the Palestinians don't have to stop hating each other, the only have to stop killing each other. They can continue to hate each other as useful citizens of a common Federation.