That's the problem with hindsight, obviously in retrospect the UN partition plan is more preferable to the current situation for the Palestinians but like the Israelis now nobody wants to concede anything. I'm not sure there is a solution at this point with all the bad blood between them, Israel feels they won and shouldn't have to negotiate anything so how do you change that? They won wars as a conquering army and it would take another one to change it. Sanctions I suppose you could say but really what needs to happen is for the US to adopt a more neutral take in the conflict and to divorce itself from its allegiance to Israel, you can't have a "special relationship" with the most powerful country on earth and expect both sides to come away equally. In my opinion there shouldn't be a Jewish or Arab Muslim state, it should all be one secular country with equal rights but that's probably a bit idealistic. I don't see a two state solution being currently feasible however and think it will always end up fruitless, Israel will not allow it and have done everything to prevent it since they see a stable Palestinian state as a threat to their security. The sad thing is that even if there was some one state solution, a lot of Israelis would probably abandon ship before living side by side with the Arabs.
I think that's basically what has to happen, the secular Jews who aren't there because it is "the holy land" should leave probably either to the US or back to Europe or maybe South America or something I dunno. I don't think this will ever happen tho, at least not peacefully. It's a messed up situation.