Diplomats have long discussed a 'two-state solution' for Israel and Palestine. But because of Hamas, negotiations have recently gone nowhere, and the situation, far from improving, seems to be deteriorating. Hamas has almost complete control of Gaza, and it is from there that they have launched attacks on Israel. But the West Bank, where the majority of Palestinians live (excluding those in the diaspora) is largely controlled by Fatah, which has recognized Israel's right to exist, and wants to move ahead with the two-state solution.
So perhaps Israel, and other Western countries, should treat Gaza and the West Bank as seperate entities, unfreezing aid to the West Bank, while continuing to pressure Gaza. In return, authorities in the West Bank would have to agree to ignore limited Israeli actions against Gaza, such as retaliating for Hamas rocket strikes, and prevent any terrorist attacks from the West Bank. If Hamas acts more reasonably in the future, or if they lose control of Gaza, the two areas (Gaza and the West Bank) could be treated as one again. But for now, it might be more constructive for Israel and West Bank Palestinians to accept a temporary 'three state solution'.