The political process projected to create the first Palestinian state seems stuck. While both sides can share credit or blame for this, the Palestinian leaders have made most of the mistakes. Almost every mistake in the book, in fact. Under the late PLO leader Yasser Arafat, Palestinian leadership thought terrorism could propel their political fortunes, and after decades of dreadful deeds, on September 13, 1993, at a White House Rose Garden ceremony, they were given good reason to believe that it did.The Oslo Accords, that were signed on that date, led to a watershed in Palestinian terrorism and subsequent Israeli concessions. Arafat and his cronies, however, did not know when to stop, and continued to use terrorism as a tactical tool when they deemed it useful. This policy eventually backfired, with the rise of the Right in Israel, and backtracked Palestinian aspirations for statehood. Israel has been run by Right and Center political parties and policy for 20 of the past 22 years, largely due to the Oslo Accords’ folly.Under Mahmoud Abbas, the Palestinian Authority has provided financial support for convicted terrorists and their families but has purportedly refrained from directly participating in terrorism. Most Palestinians have internalized that terrorism will not lead to statehood. Nevertheless, the PA’s corruption and incitement against Israel never ceased, just as some of the international community’s double standards, primarily perpetuated in the UN, never ceased to amaze.As prominent Israeli Arab journalist Khaled Abu Toameh emphasized, there are two main reasons for the inability to reach peace between Israel and the Palestinians. One is the lack of education for peace in Palestinian schools (in fact it is non-existent), and the other is the lack of Palestinian leadership authorized to make a deal. Therefore, since an agreement, any agreement, with the Palestinians has and will prove futile – there is a need to change outdated approaches.The solution to the Israeli-Palestinian conflict can be a byproduct of a much larger regional solution. Not the other way around.The international community, led by the United States and its deal-driven president, should strive for the “Mother of all Deals.” A deal that converges a pragmatic Arab world, Israel and the West to offset terrorism and tyranny propelled from Tehran and tacitly reinforced from Russia. Based on a wide range of common interests, that overshadow all differences, the deal should secure Saudi Arabia, Egypt and the rest of the Sunni world from Iranian aggression, enable the normalization of relations with Israel and solve real estate issues for the Palestinians.With goodwill, the latter may be the most feasible of these tasks. If Saudi Arabia, Egypt, Jordan and the UAE (i.e. the pragmatic Sunni states) are interested in peace and security they can easily provide land or treasure to the Palestinians in exchange for a pact with the West and Israel. Land or treasure in exchange for propelling relations and security is not without precedent in the Middle East. In fact, only last year Egypt handed over the islands of Tiran and Sanafir to Saudi Arabia in return for a strengthened relationship and economic incentives. Egypt to the south of Gaza and Jordan to the east of Israel and the territories should consider doing something similar with the PA. At the same time, Israel should expand westwards and adopt a plan, suggested by a prominent Israeli attorney, to build into the sea. A nation that leads the world in turning sea water into drinking water can also turn water into highways and airports. It has the technology. But asking Israel, a state about half the size of Maryland, to downsize is not the solution. Never was.The world has changed. Old working assumptions have become obsolete as economic engines have transformed. As Prime Minister Benjamin Netanyahu recently noted, while 10 years ago five of the top 10 companies (by market cap) in the world were energy-related, and while only five years ago three of the top five companies were from that same energy sector, today the world consumes and rewards information and technology much more. In fact, today, the top five publicly traded companies are IT companies. Exxon, Gazprom, Shell and BP have given way to Apple, Google, Amazon and Facebook. These major companies, and many more, have major research and development centers in Israel. For good reason.Things are changing. Largely due to determined economic diplomacy, this month Saudi Arabia lifted a 70-year ban and opened its airspace to allow Air India to operate flights between New Delhi and Tel Aviv. Israeli companies and athletes are competing for contracts and championships in the UAE. More countries around the world now know that Israel should and can be their ally, not their enemy. With such a setting, a viable solution is reachable.The author is a visiting scholar at Georgetown University. The opinions expressed in this piece are his own.