The biggest problem is that that's not what the Palestinians want, and so Hamas, Hezbollah, Islamic Jihad, the PFLP, Fatah, Al-Aqsa, etc. will keep going on their merry jihad way no matter what "peace" agreement the Saudis cook up. They will always have some beef against Israel, no matter what she gives up. They are passionate about killing Jews, not a Palestinian state.
It's the same principle as death to apostates.
Bin Laden's followers are determined to reclaim Andalusia.
It is their plan to convert the world, one way or another--just like communism--just like Naziism. The rhetoric may be different, but they're all cut from the same old piece of cloth. Once these bloodthirsty fanatics are subdued, something just as evil will raise its ugly head.
The people of the world must be eternally vigilant, and those stupid ostriches who refuse to face reality--known in contemporary America as Liberals--are more dangerous than these fanatics. It is they who make their evil possible.
Id est, a fool is more dangerous than a scoundrel.