I think the only realistic paths to peace would be for the Arab-occupied areas to be annexed into Egypt or Jordan and they pacify the occupants.
Given Egypt has a border wall and travel restrictions on the Arabs in the territories they occupy that makes our walls look like a painted line on the pavement and Jordon has kept Arabs from the area in pretty squalid camps for 60 years, I don't see that happening -- they don't want them in their countries, for a host of reasons.
A two-state solution will not work. The Arabs in that area have been used as pawns so long, brainwashed with hatred for so long, that they will never give up their goal of killing all the Jewish people and pushing us into the sea.
A one-state solution will not work because the Arabs from that area would not be peaceful citizens. (Note, this is not ALL Arabs -- I grew up with predominately Arab-Israeli friends. They are generally proud Israelis, proudly serve in our military (although not subject to the draft), and interestingly the wealthiest and most educated group in Israel, on a per capita basis.