There may be no solution to this problem other than violence. If you need a historical model, look at the European expansion into the New World as an example.

The point is that there are no good guys here. The Palestinian side is dominated by ruthless thugs that use Israel to inflame the Palestinians, and extortion and violence to supress their own moderates. They will use terrorism to derail any attempt by elements of either side, or by outsiders, to bring peace and compromise to the area. Their primary motivation is naked political power.

On the Israeli side, you have religious zealots who utilize Bronze Age superstitions and genuine population pressure to justify a naked land grab being carried out for the traditional reasons: cheap real estate. Israel "has made the desert bloom" is as cynical and brutal a statement as "the white man will make the land productive and bring progress". Their primary motivation is economic gain.

And outsiders are not blameless either. For decades, superpower rivalries kept this issue alive. Now it's oil politics. The Middle East nations keeps their own people distracted from their enormous domestic problems and corruption by keeping them all fired up with the "evil Zionists". The Americans have to keep their substantial and influential Jewish majority happy.

Personally, I think we should sell weapons to both sides and nuke the survivors.