This is already the defacto situation for palestine. It is already recognized by many countries. Treaties have been signed. We've been close to a two state solution in 2007 when PLO was in power. Hamas however is not about being at peace with the situation and aims at the dismantling of Israel. It wants an Islamic state from the east to the west. At multiple occasions has it sabotaged a two state solution through violence. Hamas is everything but stable, it is an Islamic extremist faction. The threat of hamas/isis has put religious extremist nationalist factions into power in Israel also fueled by people with a religious conviction. Just that the land of the palestinians belongs to the jews. They are not particularly interested in peaceful coexistence as seperate countries either.
I think most people have given up hope of a two state solution. It looks further away than ever.
Just anecdotally from my own life, they become more like thinking back to a dream you had last night. There is a knowledge of, or a familiarity with the emotions, but a lack of definite certainty about the content. You know it's yours, you know what it meant, you know what you experienced, but without reality to guide you and only through memory. When you do experience the guidance of reality, through songs, words, sights, smells, then the clarity/intensity can also come back. And that doesn't fade or I wouldn't use that word, you can get so familiar to it that it isn't carrying the weight it once did. Loss feels like loss, shame like shame, love like love... It's not that it fades into nothing, or that the quality of it diminishes. It's more that you bought a summer coat but it's winter now, it's not needed anymore. Still beautiful, still wearable, still looking good on you, just that it isn't the right thing to wear right now.