Since there will realistically always be radicals who try to expand further in to Palestine and are willing to get blood on their hands - and many Palestinians probably want to get rid of Israel in its enrirety, because from their perspective they were arbitrarily robbed of their traditional homeland for no fault of their own (they didn't attack Israel before it was there), a more realistic option to the two-.state-solution may be to just give Israel all of Palestine, which they would eventually take anyway, but demand that they pay a huge amount of money for a very long time in compensation to the Palestinians, which Israel probably wouldn't mind.
Now, I see immediately two possible problems with that. The palestinians won't surrender and secondly, their presence might be the only thing preventing nuclear war in the region...