I think the only way to have a peaceful Middle East is to have a Three State Solution. It is very simple and workful. The region should be divided to three different countries.
First, Israel with West Jerusalem as the capital, second North Palestine and East Jerusalem as capital and South Palestine with the capital of Gaza City. Israel won't lose any land.
Fatah will run West Bank as North Palestine, and Hamas will govern South Palestine.
West can help the North Palestine build a democratic government, while there is international pressure on South Palestine. North Palestine can be a safe haven for the people on South Palestine too, and they can force their government to change. Just as there were North Yemen and South Yemen.
There could be international sanctions against South Palestine, which can affect the new country. Plus, no one will take more advantages than Israel than this. Two countries for one Palestine. But I don't think Palestinian would accept this, if it has been suggested to them. If they are wise enough specially, Fatah, they'd better to.
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