While I have no sympathy for and am hostile to the Jihadists, the choice of a homeland by the Jews is odd. They had other offers and there was even a small counter-Zionist group working for a non-Jerusalem centered nation.
It is curious that Islam has sacred turf - Mecca - as do the Jews of Israel. Revering a sacred site is normal in all religions, but Buddhists have not, for example, made the Bodhi Tree into a site for nation building.
The priority of sacred dirt for the two groups, to the point of armed conflict, is sad and ridiculous. So I see no peaceful resolution at all - for now and the next century - at least.
Ever, that place is going to be the the site of the first use of nuclear weapons since WWII, you mark my words. It's all going down in flames.