I don't know what precedent there is for thinking that peace will be obtained through the so-called two state solution. When Israel gave Gaza to the Palestinians, rather than procuring peace, Israel was rewarded with nothing but rocket-fire from Gaza and then with the subsequent democratic election of Hamas whose policy it is to drive Israel into the sea.
Sure, every distinct ethnic group in the world deserves a homeland. But the borders of each country's homeland ought to be determined on the basis of what is right - not on the basis of some vain hope of appeasing a people whose intent it is to destroy a legitimate nation. There is a rightful place for Israel to call home, and there is a right place for the Arabs to call home. No-one should give the rightful land of Israel to the Arabs, and neither should anyone give the rightful land of the Arabs to Israel.
The question is, how to determine the rightful borders? Answer: by the Scriptures, and by history.
My observation is that the Bible acknowledges Ethiopia, Egypt, Lebanon, Syria, Jordan, "Arabia", Persia (Iran) and Israel, and delineates their borders with a certain amount of clarity.
So if "Palestine" is going to be partitioned, let it be partitioned on the basis of what is right - Scripturally, historically and morally - not on the basis of some vain hope.
Besides, a separate "Palestinian" state already exists - it's called Jordan. The original British Mandate of Palestine after World War I included all of modern-day Jordan and Israel, including Gaza and the West Bank. The huge area of land east of the Jordan river was then partitioned off in 1921 and the Kingdom of Jordan was established. Apparently there is no ethnic, cultural, historical nor linguistic disctinction between the "Palestinians" and the "Jordanians" - even their flags look the same.
Despite being given 80% of "Palestine", the people intent on destroying Israel were still not satisfied, so the United Nations responded by partitioning Israel's land even further. Of course, this failed to procure peace, so Israel recently responded by giving Gaza to the "Palestinians" - but it served only to escalate the violence. So now President Bush and Prime Minister Howard think peace will finally be procured by pressuring Israel to give-up even more of their land.
I say, stick with the original Biblical, historical, and moral territories both of Israel and of the Arabs - draw the line in the sand, because God loves both the Jew and the Arab - and then get down to the business of procuring peace with those who want peace. But don't keep giving Israel's enemies what proves to be nothing more than rocket-launching pads within Israel's rightful territory!
What is really interesting is that 2000 years ago Jesus came as the only real pathway to peace for Israel - but because the Jewish rulers didn't acknowledge Him, Jesus predicted the seige and fall of Jerusalem to take place within a generation - and it came to pass exactly as He said. Jerusalem would then be trodden under foot of the Gentiles, said Jesus, until the times of the Gentiles be fulfilled. That's the period we are now living in.
Meanwhile the Gentiles who believe in Jesus are receiving the peace and righteousness which were originally promised by covenant to the Jews. Inner righteousness, peace and joy in the Holy Spirit come only from Jesus - both for the Jew, and also for the Gentile. That's the perspective on true, lasting peace that Jesus alone can give.