Most people who speak about a solution, have never really looked at the map, or rather, they don't understand. Maps of Israel may look like Israel is huge, but it isn't. The whole area of Israel and the "west bank" and Gaza is just a bit bigger than New Jersey. 

The biggest problem with a peace solution begins with the word "peace" itself. Westerners and Israelis who talk about peace imagine something like between the USA and Canada, or Sweden and Norway. Most Palestinians who say "peace" mean "until we are strong enough to continue the war".