This is the American model, it works here, but in Israel the problem would be the constitution. Israel will never amend it s constitution to give the Palestinians any rights. So the de facto will be the solution. The only change is the civil law which is applied anyway in both entities now, just make it legal. Nothing is easy out there . This is the most practical solution in the absense of two states for two people.
US rally shows support for ex-Marine held by Iran on spying charges (AP)
from the article: Erekat: No unilateral declaration of Palestinian state