Middle East peace process: are two states the only option?

President Barack Obama has said the prospect of a two-state solution in the Middle East is "dim", following comments made by Israeli Prime Minister Benjamin Netanyahu.

Before the recent election, Netanyahu rejected the notion of a Palestinian state, saying it would not occur while he was leader of Israel, despite previous commitments to the deal.

With such a lack of political will, are there any other options left on the table and what are their chances of success?

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What is the two-state solution?

Those who back the plan for "two nations for two peoples" envisage an independent state of Palestine existing alongside a separate nation of Israel. The country would be divided along the 1967 border, and Jerusalem, which both sides claim as their holy capital, would be split in two.

In 2009, Benjamin Netanyahu first committed to a "demilitarised Palestinian state" under intense pressure from Washington, the BBC reports.

The matter was discussed the following year in peace talks between Israel and Palestinians, but the talks were quickly derailed by the end of a partial freeze on Jewish settlement building.

The two-state solution has the backing of the majority of the international community, including the United Nations, the Arab League, the European Union, Russia, the US and the UK. But many people on both sides of the conflict argue that the two-state solution is nothing but a "utopian dream".

In the past, Netanyahu has said "to subdivide this land into two unstable, insecure nations, to try to defend what is indefensible, is to invite disaster," Haaretz reports.

Hamas has been opposed to peaceful co-existence since its inception. "From the river to the sea, from the north to the south, this is our land, our homeland," said leader Khaled Mashaal. "There will be no relinquishing even an inch of it. Israel is illegitimate and will remain so throughout the passage of time. It belongs to us and not the Zionists."

So what are the alternatives?

"The fantasy that there is a two-state solution keeps everyone from taking action toward something that might work," argues Ian Lustick in the New York Times. A number of alternative peace solutions have been debated over the years, including a power-sharing model similar to the one seen in Northern Ireland and a Bosnia-Herzegovina-type federation.

What about the "three-state solution"?

Some within the Israeli Knesset have put forward the notion of a three-state solution, involving a deal between Israel, Jordan and Egypt. It rejects the idea of an independent Palestinian state, instead suggesting that the West Bank become a part of Jordan, and the Gaza Strip join Egypt.

However, such a suggestion which rejects the right to self determination would be unacceptable to the majority of Palestinians. Egypt and Jordan would also be "understandably reluctant to take control of the troubled territories," writes John R Bolton, a former US ambassador to the UN in the Washington Times.

Many argue that the only realistic alternative is a one-state solution.

What would it involve?

Under "one state for two peoples", Palestinians and Israelis would have equal rights and freedom of movement, with a democratically elected government that recognises Judaism, Islam and Christianity as equal religions.

Such a state would have a legislature "that would reflect the mosaic of the country and an elected government formed by a coalition of the communities and the two peoples' representatives," argues Gideon Levy in Haaretz. "Yes, a Jewish prime minister with an Arab deputy - or vice versa."

The former Palestinian Authority Prime Minister Ahmed Qurei – who was a part of the historic Oslo Accords – said Palestinians should not rule out a one-state solution. "It should be discussed in an internal dialogue and put to the Palestinian people in a referendum, before it is laid on the negotiating table as an option and thrown in Israel's face like a hot coal because it caused the two-state solution to fail," he said.

However, despite the "apparent enthusiasm" some have for the idea of a one-state outcome, "no one we spoke to could articulate exactly how it would be acceptable to both parties," say researchers at Princeton University.

They concluded that the various proposals that involve confederations, binational states, or regional options did not meet "the conditions of being both more plausible than the two-state solution and satisfying the legitimate demands of both the Israeli and Palestinian people simultaneously."