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It's painful to say this, but the probability is that there will be no happy outcome
Since Israel was founded there never had been a chance of a happy outcome. The claim on the land was tenuous at best then and neither Israel nor Palestine ever wanted to peacefully mingle. The fact that Israel is governed by far right religious nuts and Palestine by terrorists also adds to the problem, but hey! whatever works to assuage the "western world" guilt for the Shoah, right?
That's not true.
In the 90's, the Oslo Accords was a step forward between Israel (Yitzhak Rabin, and his opponent Shimon Peres) and Palestine Liberation Organization (Yasser Arafat) to find a way to live peacefully together.
They shared the Nobel Peace Prize for that. And it cost Yitzhak Rabin his life, as he was murdered by a far-right terrorist who wanted to stop the peace process.
True but since then Israel has done nigh to nothing to stop the creation of kibbutz in Palestine, and the occupation of land both in Gaza and in the West Bank, and Hamas has grown to pretty much erase any other political faction in Palestine. The PLO shrunk out of any international relevance since the death of Arafat and Israel is actually governed by the far-right. Alas! Everything went very wrong since the 90s.
Now, I am in no way expert in the subtleties of the political situation in Israel and Palestine, but it seems that the peace process in that region will always be doomed to fail.
You're right, the situation has deteriorated over the last 30 years.
But what I don't agree with is the idea that it's impossible to establish lasting peace in the region.
Otherwise, we have to accept that their only conceivable future is permanent conflict until genocide arrives. That's morally unacceptable to me; we can't settle for horror.