Sorry if this isn't the kind of content people want to see here. It's my regular blogging platform, so it's where I go by default when I have something I want to get off my chest, but happy to delete if that's the consensus.
Bias warning: I am Jewish and live in Israel.
The Israeli Palestinian conflict is a messy affair. Without getting into any issues of responsibility or who's at fault, I think it's clear that there are no quick and easy solutions, and anyone who suggests one is either heavily biased, or not clued up on the situation.
But just because the problem as a whole is a mess, doesn't mean we can't have very neat partial solutions that are eminently achievable, and solve a big chunk of the problem in one go.
Trying to create a Palestinian state in the west bank is a tricky proposition for the Israelis because:
It's also likely destined to be an economic backwater:
A combined Palestinian state of Gaza + the West bank would have all these problems + not being joined at all, with some 25 km of Israeli territory separating them
It is possible that many or most of these issues could be overcome with enough willpower, but it certainly complicates the problem.
Gaza meanwhile has none of these issues.
It's a densely populated, contiguous, flat area of coastal land. It has about half the population of Singapore, in about half the territory. It has a functional port, used to have a functional airport, could easily have a great rail service, and has offshore gas reserves. It has a short well defined border with Israel in an area that's mostly rural, where Israel has a much larger strategic depth, and is much further away from the centre. It has no Israeli settlements, and no places of particularly strong cultural significance to Jews (there's an ancient synagogue, but so is there in Italy).
There's no reason why Gaza couldn't be an economic powerhouse, much like Singapore or other small densely populated countries.
Gaza has been a de facto proto state for the last 18 years. It's been denied full state status partly because it hasn't sought to be recognised as such, instead preferring to seek recognition as part of a combined Palestinian state, and partly because its ruling party is a terrorist organisation that often initiates attacks on Israeli territory, leading to conflicts flaring up every couple of years.
Hamas might point to the Israeli economic blockades as the reason why they have attacked Israel, but this is putting the cart before the horse - the Israeli government tends to ease the blockade in times of peace, and tighten it after a war. Instead the main causes of the sporadic conflicts are usually Israel taking aggressive actions in the West Bank, which Hamas objects to, and uses Gaza as a base to retaliate against Israel.
I think it is clear that at the very least, Gazans would be better off if they decoupled their cause from that of their brethren, and pushed for an independent sovereign Gazan state.
The ruling party of Gaza is likely to change in the coming months. I think if that ruling party pushed for Gazan independence, agreeing to recognise Israel within the 1948 borders, and to demilitarisation, in return for Israel recognising it's independence and lifting all blockades over the coming years, it is likely that this deal could be achieved, especially with international pressure.
Such a Gaza would likely become extremely prosperous over the coming decades. The situation would clearly be better for Gazans who would be wealthier, and no longer subject to constant war. It would clearly be better for Israelis who could reduce their military spending, and no longer suddenly have to shut down the country for a couple of weeks every 2 years because the conflicts flared up again.
I would argue though that it would even be better for the Palestinians in the West Bank. The actions of Hamas in Gaza drive a vicious cycle, where they provoke a reaction from Israel which whips up Palestinians in the West Bank, which causes Israel to clamp down there, which further stirs up feelings in Gaza. A peaceful Gaza would partially dampen this cycle of violence.
Furthermore, Gaza is used nowadays as an excuse by Israel as to why they can't establish a Palestinian state - "See, we pulled out of Gaza, removed 20,000 people from their homes, gave them every opportunity to prosper, and what do we get? Rockets and terrorism. No way are we doing that again!" A peaceful Gaza will make a peaceful Palestinian state in the West Bank much easier to believe in.
Finally over time, Gaza will likely become economically integrated with Israel, and maintain full diplomatic relations, much like Egypt, Jordan, and the UAE do today. In fact they will likely end up Israel's biggest trading partner. They would be in a position where they could meaningfully put pressure on Israel to treat Palestinians in the West bank better - not by violent means which tend to be counterproductive, but by reducing economic cooperation.
To me this is an obvious win/win/minor win, and should be pushed for in Israel, Gaza, and internationally as the first step on a path to peace.
agreeing to recognize Israel within the 1948 borders, and to demilitarization
What you're describing is at best a protectorate, not a sovereign state. (Yes, I know there are some that like to style themselves "protected states" instead.)
I don't see why this is better than Israel simply conquering the place outright, appointing a governor, and then letting it (or even helping it) develop economically, to become a new Singapore or whatever.
If there's a governor appointed by Israel it's likely that there's sustained insurgency against their government.
It's difficult to get economic development when there's an ongoing insurgency.
Demilitarisation would be necessary initially for this to be acceptable to Israel (apart from such small arms as are necessary to maintain law and order, and a coast guard to prevent smuggling), but could be removed long term given continued peace and economic integration.
Also it should be acceptable for Gaza to enter into peace treaties with e.g. Egypt to defend itself from Israeli aggression, and Israel to defend itself against Egyptian aggression.
Finally it should be expected that Gaza will maintain authority over it's airspace and waters.
I think this would count as a protected state instead of a protectorate, since it would be expected that Gaza will be responsible for it's own international relations. It would also be with a view to becoming a full sovereign state over time.