The two-state solution is not moving forward, and is almost dead. Many Palestinians have given up, and now realize that the West Bank will be annexed by Israel, and they will become Israeli citizens with the right to vote. This influx of Arab citizens will greatly change the demographics of Israel, and will change its identity as a Jewish state into a bi-national state. Such a concept is not new. One of the early Zionist leaders, Chaim Weitzmann, the first President of the State of Israel, visualized this, as a bi-national state for both Arabs and Jews. This could also mean that the State of Israel could end up with an Arab prime minister.
The Jewish identity cannot be dictated by government authority anymore. The last time it was done was by the Soviet Union against its Jewish citizens in the 1970s and 1980s, when knowledge of Judaism, Jewish culture, and Jewish history was suppressed by Soviet authoritities. Now a Jewish identity must be a personal choice, where an individual must have a desire to know and be connected to Judaism, Jewish culture, and Jewish history. Government authority no longer plays a role.
An example of a bi-national state is the Kingdom of Belgium. Belgium became a part of the Kingdom of the Netherlands, after the Napoleonic War in 1815. But it revolted in 1830, for two major reasons. The French-speaking Walloons were not included into the Dutch Parliament, and the Dutch-speaking Flemings were Roman Catholic, while the Dutch were Calvinists. Also, the area of Belgium was always under foreign rule by the Spanish, Austrians, and French. When Belgium first became independent, French was the official language. But when two Flemings were beheaded for committing a crime, where they could not understand a word at their trial, Flemish became the second official language in 1894. Also, the French-speaking Walloons were the majority. But now the Dutch-speaking Flemings are the majority, and control most of the agriculture, manufacturing, and trade. Both Flemish and Walloon nationalists have applied for separate membership for Flanders and Walloonia into the European Union, but breaking Belgium into two would be a fiscal nightmare. So the country still stays together, like it has since 1830. During the German occupation during World War II, there were Flemish and Walloon ultra-nationalist parties, who collaborated with the Nazis. But both Flemings and Walloons were part of the resistance, who fought against Nazi occupation. Today Belgium has had both Flemish and Walloon prime ministers.
But what are the major differences between the Flemish and Walloons, and the Jews and the Arabs?
Despite linguistic riots and vandalism, the Flemish and Walloons have never been into armed conflict with each other. While the Arabs and Jews have been into constant armed struggle with each other.
There are Flemish neighborhoods in Walloon cities, and Walloon neighborhoods in Flemish cities. Both Arabs and Jews live in places like Jerusalem and Haifa, but the settlements in the West Bank are for Jews only, while Arabs can only work there only.
Flemish and Walloons have only killed each other sporadically, mostly in crime-related instances. While Arabs and Jews have killed each other out of ethnic rage and hatred.
While unity of Belgium is fostered by the Parliament and the King, unity of Arabs and Jews is not really fostered by the government of Israel and the Palestinian Authority, and Hamas is so two-faced about it.
Extremist parties would have to be outlawed, such as the Kach Party was outlawed by the Israeli Supreme Court. That means Hamas would have to be outlawed too.
Is there a true incentive to make Israelis and Palestinians into a bi-national state? The two-state solution will also be on the back burner, and so many Israelis and Palestinians are sick of it. But one or the other will not be driven out. Both are there to stay.