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If I were a Palestinian, I'd prefer to live in peace with Israel and write off the taking of my land, and stop the fighting. But I see things through prosperous American eyes from a free country.
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That's pretty much what happened in Ireland. We ended up removing the territorial claim to the North from the Constitution. 98% of voters in the Republic didn't think the issue of what flag flew over Belfast was worth all the bother.
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It is no one's interest to get involved in the conflict. I believe that all regional powers benefit from maintaining a status quo in the conflict with Israel. It serves as good rhetoric and distraction. Also, with an Israeli military backed by the considerable power of the US, the Arab regional powers simply cannot win in a conventional conflict.
So, despite their rhetoric and bluster, the Arab countries won't involve themselves unless attacked directly. And I doubt that Israel would do that, despite their own rhetoric and bluster.
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Pretty much a spot-on analysis. About the only thing I'd change is that Israel doesn't need the backing of the US for a military victory. One of the things they learned in 1973 was that they needed to be less reliant on external sources of supply and intelligence. As a result, they now build their own ammunition, tanks, missiles and so on. In many cases those pieces of equipment are more technologically advanced than what the US has in its own inventory.
NTM