If most of the settlers remained on the West Bank, that would give a Palastinian state about a 20% Jewsih minority. What's wrong with that? Israel has a 20$ Arab minority and does ok with that. Not great, perhaps, but certainly a lot better than South Africa did under apartheid or the Southern U.S. did before the Civil Rights movement. Working out minority problems can be difficult, but it is nowhere near as difficult as working out a bi-national state where there is so much hatred. De-facto bi-national states like Lebanon and Sudan have been nightmares. 300 or 400 people, mostly women and children, were massacred in Nigeria just a few weeks ago. Why would you want to solve one nightmare by creating another?
Pakistan foils planned jailbreak that would have freed Daniel Pearl's killer (Reuters)
from the article: Deputy FM tells U.S.: Israel won't make any more concessions