Based on public opinion research methods used in Northern Ireland, 500 interviews were completed in Israel and 600 in the West Bank and Gaza immediately following the Gaza war and the Israeli elections.
Each side was asked which problems they thought were "very significant" and what the solutions might be.
The results indicate that 74% of Palestinians and 78% of Israelis are willing to accept a two-state solution on an option range from "tolerable" to "essential", while 59% of Palestinians and 66% of Israelis find a single bi-national state "unacceptable".
The poll comes as it emerged Barack Obama is to invite Israeli, Palestinian and Egyptian leaders to the White House within the next two months in a fresh push for Middle East peace. Obama, speaking at the White House yesterday, said there was a need to try to rise above the cynicism about prospects for peace.
The results of today's poll imply that mainstream Israeli and Palestinian populations have yet to acknowledge the significant priorities and fears on the other side.
The top item for Palestinians is the establishment of an independent sovereign state at 97%, followed by the rights of refugees at 95% and agreement on the future of Jerusalem at 94%.
For Israelis the top item is security at 77%, followed by an agreement on the future of Jerusalem at 68% and rights to natural resources at 62%.
An analysis of the poll by One Voice says: "It is absolutely essential that the issues at the top of these two lists get dealt with in any peace agreement or it is unlikely that that agreement will last. This means Palestinians need to be aware of and address the 'Security of Israel' problem that comes in 12th on the Palestinian list, and that Israelis need to be aware of and address the cluster of issues at the top of the Palestinian list."
The poll also revealed significant divisions about the issues of settlements and refugees, on which there was no single proposed solution which met with majority approval on both sides. Ninety-eight per cent of Palestinians think that all the settlers should leave the occupied territories with the settlements abolished – an option that 53% of Israelis find unacceptable.
More than 90% of Palestinians want refugees to be given the right to return with compensation, while 77% of Israelis say that is unacceptable.
On Jerusalem, the sides are poles apart. The most attractive option for Palestinians – 95% – is for all of Jerusalem to remain in Palestine, and for Israelis it is for all of Jerusalem to remain in Israel at 56%.
The report says that "as these two options are mutually exclusive proposals to internationalise or divide the city also need to be considered".
One Voice concludes that, at a minimum, the results suggest that "the continued insistence of both sides on a negotiated and mutually acceptable resolution could offer significant legitimacy to political leaders looking to push for negotiations toward a two-state agreement".
In November 1947, the United Nations (UN) General Assembly passed a resolution calling for the formation of a Jewish state.
In 1948, the British government withdrew from the mandate and the state of Israel was created in roughly 15,000 square kilometres of the mandate’s land, with the remaining areas split under the control of Egypt and Transjordan.