The Solution
Or I should say the beginning of the end of this conflict can be acheived with a bold move. Israel should simply recognize a palestinian state in the areas currently controled by the Palestinian Authority. They would simply be recognizing a reality on the ground and making no consessions on land, and it would placate many palestinians, and other arabs, by creating a state. It would also largely end the "victim" status of the palestinians. Israel should retain the right to chase terrorists whereever they hide.