Although the PLO and Israel agreed nearly twenty years ago to settle the conflict, the idea of a two-state solution appears less practical than ever and the one-state solution is becoming more of a reality. It turned out that both sides are unable to reach political decisions regarding territorial compromises. This situation is intensified from a religious point of view. The political dispute in the Palestinian side brought a deep split between Fatah, the national movement, and Hamas, the Islamic movement. Nevertheless, Fatah still hopes to restore national unity and force Israel to advance the two-state solution based on the Arab Peace Initiative.