Hey dude. If you read this book: http://www.amazon.com/State-Failure-Mahmoud-Unmaking-Palestinian/dp/1137278242/ref=sr_1_1?s=books&ie=UTF8&qid=1427075099&sr=1-1&keywords=state+of+failure
I think that will help you with your answer about why there isn't a two-state solution.
I'm not even going to talk about Hamas and why they are useless to any two state solution. (Violence, Fundamentalists, Idiots, living in fantasy-land where they will retake all over Israel)
This book talks about the failure of the Palestinian leaders: Basically the two all-powerful Pal leaders so far have been Abbas and Arafat. Much like dictators they keep the state institutions weak so they are all powerful. They eliminate/weaken political rivals, they steal aid money, they are corrupt and are basically horrible rulers. Instead of focusing on actual governance and trying to build up state institutions and their economy, they just focus on Israel and how Israel is to blame(Israel isn't entirely innocent in this). Yes the occupation restricts freedom of movement and has check points, security wall, soldiers patrollings, etc. But that doesn't explain why the Pals in the West bank haven't accomplished anything for their people and haven't built anything economically. They get so much free aid money and have achieved so little, because everything is Israel's fault in their mind. Salam Fayyad was the ex PM of the PA and he tried to build up state institutions and did things like unify all the PA bank accounts(when he took over they had like 76 random secret bank accounts in various officials names in banks all over the world). He unified the security service until one force instead of having 9 different security operations that 9 different politicians were running. He tried as best he could to build up institutions, practice good governance and transparency. Some ppl will say he sucks, but compared to Abbas and Arafat he was amazing. He retired in frustration because he couldn't get much down with Abbas minimizing him at every turn. He is currently polling at .8% if elections were to be held for president even though he tries to do the right thing. After decades of brain-washing, being kept down by the other arab states/leaders and basically being a welfare quasi-state: The Pals have become professional refugees whose only concern is Israel and the occupation/blockade. In actuality they should be focused on doing what they can under the situation they are currently in. Look at one of Israel's bright spots: The High-tec start ups. Do Pals not have access to 4 or 5 computers and education(how these companies start)? Why can't they built technological start ups? I mean what resource are they lacking to achieve these things. The sad fact remains is that when/if the pals ever get a state-It will become a failed state and Israel will have to go back in there. Imagine a few terrorist attacks from the West Bank and how much that would wreck havoc on Israel? Most states early-on are failing/weak states. Israel is a fucking miracle in that sense that it became a very successful country in a short-time period(Economically/Militarily/democratically/Socially)
Maybe if the Pals focused less on trying to get a state and more on building up their own economy they would get further in life. You don't magically flip a light on and become a state. You build up a state with creating strong institutions and economics and hard-work.
Imagine the West Bank as a successful economy where people were focused on education/careers instead of violence. I bet we would have a 2 state solution pretty fast as even a larger majority of Israeli's would be in favor of it because they would have no violence to fear. When you lose every war fought by you and on your behalf('48, '67, 73), when you turn down two peace pals (01 and 08), when you don't achieve terrorizing Israelis into leaving(100's of terrorist attacks)...THE BALL IS IN YOUR COURT TO CHANGE, not Israels.
Oh and did I add Gaza and how it is an utter mess because it is run with by fanatical morons. And yes even if there was no blockade gaza would still be a shit-hole, because Hamas has a 1-track mind. Who would have thought a group whose whole identity if destroying Israel would be poor at governing?