It's amusing. Really amusing. The most obvious solution to the Israeli-Palestinian issues that benefits the most parties is not materialising for the exact same given reason as the most disputed solution: "The Palestinians say no." Why is that amusing? How can I find that amusing? That's very simple.
Lately, there's been an increasing trend for Arab states, including fairly influential gulf states, to get sick and tired of quarreling with Israel and seek more favourable arrangements. Egypt and Jordan have long made their peace with the situation, they even reject the notion of taking back territories they previously occupied. Egypt is not interested in absorbing a potentially troublesome population. Jordan, or more precisely its Hashemite monarchy, is already concerned about its extraordinarily high percentage of Palestinian residents and has no desire to absorb even more and risk a majority Palestinian population making a second takeover attempt that might result in Jordan becoming the Palestinian state.
A West Bank state might be of some concern to Jordan, but obviously is not very palatable to Israel, and even less to many radical West Bank settlers who already discuss the idea of a future State of Judah in the West Bank. Egypt may not particularly like the prospect of giving up a large chunk of its territory in the Sinai, but it also can't disregard the potential benefits, which are also attractive to Jordan, and at the same time would solve all of Israel's problems. Egypt could benefit by leasing the land to a future Palestinian state, rather than donating it, and receive land in the Negev from Israel to create a connection to Jordan, which at least at first could also connect the West Bank to a newly created Greater Gaza. Israel could allow Palestinian refugees to return to such a Greater Gaza, which would suit Jordan just nicely, and allow the Palestinians to freely develop it without having to apply for permits. Egyptian workers could create the initial infrastructure, then be joined by increasing numbers of Palestinian workers, and the resulting development would greatly boost the Egyptian and Gazan economies, especially a potentially quickly emerging tourism industry along the coastline.
Inevitably, the quality of life in a Greater Gaza would quickly surpass that in the West Bank under the current Israeli policies, especially if settlement expansions were to be pursued and the current measures to reduce the West Bank population continue. Many West Bank Palestinians would find relocation increasingly desirable, and upon creation of a Palestinian state in Greater Gaza, stateless West Bank residents would receive absentee citizenship and receive an Israeli residence status with maintained restrictions on their rights and freedoms, making relocation even more attractive. Sooner or later, West Bank leaders would find themselves without significant leverage and effectively defeated.
Why does that make it amusing that it's not being pursued, supposedly due to Palestinian rejection? Because those involved, namely Israel, Egypt and Jordan, and recently several additional Arab states, act as though it actually matters what the Palestinians say. Does it? Really? What exactly has so far been achieved solely through Palestinian wishes without Israel effectively making the decision all by itself? How much has actually been achieved through so called 'western pressure' on Israel? What exactly did western nations ever do that goes beyond posturing, and when exactly did the western world not act as though they achieved something after Israel threw them a bone? What, besides the creation of the State of Israel, has the UN actually achieved? How many relatively mild threats against Israel has any US government ever followed through and made good on? Palestinian wishes matter and solutions cannot be imposed on them against their will? Seriously? It pretty much looks to me like that wouldn't be any problem at all, so far nothing the Palestinians said ever mattered, and due to recent developments, the Palestinian position in the region has never been weaker, and the Israeli position has never been stronger.
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