There are no circumstances in which Israel will ever allow a completely sovereign Palestinian state in either the West Bank or Gaza. Ever. Meanwhile the various Arab nations surrounding Israel waver on establishing viable democratic governments.
So to have what could only be described as Israel's best chance for regional peace is to consider a few truly new options.
First stop the charade of wanting a separate Palestinian nation in the West Bank. Annex it and get it over with. You can only run the 3 card monte scam for just a little bit longer. Also work with Jordan to raise the level of the Dead Sea to minus 1000 feet. Again seriously. Move a few small towns, Make Jericho a coastal city and create a natural barrier against land invasion from that quarter forever.
Second. Peace in Gaza. Egypt is not the answer. Neither is an independent Gaza. Instead use every connection, PR outlet, toady who will listen and just plain force of will to suggest and then allow Gaza to become the 82nd province or ili of Turkey. Seriously. NATO member, same political ideology and allowing Turkey a permanent enclave in that region of the Mediterranean. The Turkish ego would fall all over that. In exchange for that Turkey would stop the missiles and tunnels and flood Gaza with development. Virtually overnight is my guess. Is it really that hard for you?
Third. Use those same channels of persuasion to have the Arab world ponder deep and hard the unification of Tunisia, Libya, Egypt, Jordan and perhaps Syria, Lebanon and Sunni/Kurdish Iraq. The groundswell for something like that would also neutralize Iran for a generation. There are better options than bombing them back to Xerxes I. Try a few. You are NEVER going to get a better chance to wink and smile at the possibility of a genuine sectarian democratic Arab neighbor to be at your border. The chance of those countries unified as one being economically and politically successful so far outweighs the chances for any of them on their own it is not even debatable. Egypt's current path? Not looking good. And did I mention Iran?
Israel's land for peace offer for that is everything south of the 30th parallel to the newly unified nation. For that, what, fifty thousand Israelis max would have to consider relocation? Have you ever seriously considered what the non contiguous geographic division of North Africa and the Middle East by Israel sub consciously does to the average Arab? Hebrew heritage for 3000 years has been temples and building sites. Arab heritage for 3000 years has been unfettered overland travel throughout the Arab world. This has been denied since 1947. Has that ever occurred to you as perhaps the root cause of Arab hatred? Seriously never? It sure has not been their undying love of the average Palestinian in the street.
Get out of the rut of 60 years of go nowhere policies and ideas. Think so far outside the box you even surprise yourselves.
You consider those three scenarios and everyone in the region will be running so fast to keep up with events for the next decade or so that the existence of Israel will be a distant distraction. You like to think of yourself as creative. Here is your chance to really show that you can be creative. Or at least listen creatively to a few new ideas.