That assumes that there was ever a genuine commitment on the part of the Israelis to allow Palestinians to remain in the areas allocated to them and an intention to treat them as equal human beings. Speeches made by former leaders and officials indicate that the underlying agenda was to rid the land entirely of the Palestinian presence by making their lives intolerable:
"The Arabs will never win over us by throwing stones. Our response must be a nationalist Zionist response. For every stone that’s thrown–we will build ten settlements. If 100 settlements will exist–and they will–between Nablus and Jerusalem, stones will not be thrown. If this will be the situation, then the Arabs will only be able to scurry around like drugged roaches in a bottle. " (Rafael Eitan, former Israeli Chief of Staff)
(Camera - Committee for Accuracy in Middle East Reporting in America) have tried to discredit this quote as "A single (albeit controversial) remark made in a specific context is misrepresented as a generalized, routine slur by an Israeli leader".)
Although Israeli leaders are not so careless now with the language they use, the tactics they employ remain the same - completely ignore UN resolutions re ending the occupation of illegally held land and ending human rights abuses and then give a semblance of engagement in peace talks but refuse to budge on these fundamental issues, and then express horror when the Palestinians fire rockets at them. This gives them the excuse to use their military might to bomb the Palestinians.
The Emergency Regulations passed in 2003 limits the right of Arab citizens of Israel to have their spouse and children naturalized. The Central Bureau of Statistics divides the citizens of Israel into two categories "Jews and Others" (Jews, Christians who are not Arabs and people of no religion) and "The Arab Population" (Muslims, Druze, Christian Arabs). This is just one small part of the system, one of many, that has caused Desmond Tutu and many others to draw parallels with the apartheid regime of South Africa.
Unless the US stops giving billions of pounds worth of military and other aid to the Israelis, thus forcing them to participate meaningfully in peace negotiatons, I don't know what the answer is.
If Hamas stopped their ineffectual military action, perhaps Israel would then be forced to address the real issues - or perhaps things would continue as before, with the UN passing further useless resolutions and everyone forgetting about the ongoing plight of the Palestinians.