The israelis have reduced the palestinians to some kind of maniacal mess wiling to buy crazy death cultish tactics where they aspire to topping themselves and perhaps killing a few inconsequential innocents or soldiers in the process. Its a disaster for the two of them and complete disaster in humanitarian terms.
I'm sure the day will come when some horrendous end to that conflict comes about, whether its the palestinians "drinking the cool aid" en masse or the Israelis liquidating them, it'll not end there though, fundamentally they need an "other", an enemy, now and their existence, either of them, would likely be jeopardised by peace.
It could have been avoided, there where good peace processes but then the supporters within Israel where assasinated, remember that guy stabbing up the statesman/leader, what happened to him? And shortly thereafter Arafat dies of a mystery illness seemingly tailored to knock him out. Its all been a foregone conclusion since then.