I always thought that the Palestinians should be given the Sinai as a home land (This would solve the problem "maybe"), Egypt is an African country and does not belong in the middle east, so this land should be annexed from them and given to the Palestinians.
The Palestinians will never agree to this though, as they want Israel and they are encouraged to keep fighting by other Arab states and there religion.
(Sinai peninsular) Potential Palestinian home land:
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