The obvious answer (which neither side will accept initially) is to make the whole of historic Jerusalem an international city, administered by a neutral power. Have two secular states, with different flavours, but with agreements concerning the rights of Palestinians in Israel and Jews in Palestine.

A truth-and-reconciliation process on the South African model. Then a huge development plan to repair the damage done to the respective economies.

This involves huge write offs for each side: the loss of property by the families of Palestinians who were forced out of Israel in 1947, the amnesty of the carnage in the whole area since, the nuclear disarmament of the whole area, and the enforcement of that by a neutral power, the abolition of militias....

But short of that, the next thing after putting a wall around Israel, would be to put a lid on it too, because they will have to keep the enemy out for not just a few, but hundreds of years.