The issue with Israel and Palestine is the fact that Israel refuses to admit that what they're doing is wrong. They insist on trying to reclaim the historic kingdom of Israel from 2000 years ago, while seeing the Palestinians as little more than a nuisance to be eradicated.
The way I see it there are only 4 possible solutions to the issue:
1. The 2 State Solution. Basically what the UN Resolution is demanding, an end to illegal villages on Palestinian land and a recognition of Palestine as a nation. In return Palestine recognises Israel as a nation. Remember, part of the reason Palestine doesn't recognise Israel is because many of them were forcefully expelled from their homes. Land they owned and farmed for generations was taken from them at gunpoint and handed over to total strangers.
2. Continue as is. Basically nothing changes, for Palestinians they'll see continuing encroachment on their lands, as they're forceably removed. Israel will see continued attacks from Palestinians as the Palestinians get increasingly desperate and disillusioned.
3. A Single State Solution. Israel effectively annexes Palestine completely, forcing the remaining Palestinians out of the country (they've already made it clear that they will not accept Palestinians into Israel as it would require Israel to no longer be a Jewish State). Every country around Israel has already stated they won't accept any more Palestinian refugees since the last expulsion by Israel.
4. A Single State Solution. If the Palestinians won't leave, and Israel effectively annexes Palestine to ensure the Palestinians can't retaliate you basically carpet bomb from one end of Palestine, to the other, killing every single man, woman and child living there. (They've come pretty close to doing this already, stopping short of completely flattening Gaza City.)
At the end of the day there will be no peace until both sides sit down and listen to the other side. The irony is Blair actually had the experience to do this, but blew his credibility with Iraq. Maybe Jerry Adams should have a go instead?