I could not dream of a better argument for distributed non-centralized power generation than this conflict. This region is by most accounts very sunny, and would be a perfect test case for distributed solar generation (or possibly even wind they are coastal in Gaza). Now there are some real impediments to achieving such a system, i.e. embargo/blockade by controlling nation-state. If there were the political will in Gaza to smuggle in power generation technologies rather than armaments along with the supplies needed for survival this might actually be a possibility.
For the general populace on both sides, this must seem like having a rather protracted sword of Damocles hanging over for decades. No one ever interviewed does not want this problem to be resolved This of course brings the real question up, why does this conflict not resolve itself? The answer is not simple. There is of course the media horse race, religion_A v. religion_B, argument. This may motivate the extremists on either side. One must consider the fact that there are significant economic resource impediments, the sides are being used in a geopolitical proxy fight, and the idea of ethnic identity defining statehood is historically problematic.
This region is resource constrained for multiple reasons. For Gaza, it is ridiculously population dense. For the region in general there are simply not enough water resources for everyone. These problems are not insurmountable, but when negotiating for independence things like water rights (ground and surface), and when determining the border who gets the nice farm land greenacre vs. who gets arid brownacre/desertacre. The Palestinians are currently dependent on foreign aide, charitable organizations, etc. This is problematic as well for obvious reasons that liberal and conservative scholars will attest. Foreign aide has strings attached so it prevents using resources efficiently (money for a water treatment plant, but no sewers for example). Foreign aide also creates dependency and prevents the growth of local markets. (There is one argument from each side.) This is not even scratching the surface of other natural resources, fly over rights, etc.
This fight is also one between many geopolitical rivals. Just as the European empires of the last two centuries spurred fights and unrest, so too do the economic empires of our current time. Players like other middle east oil states, Iran, EU, Russia, Syria, and of course the US of A. There are mixed foreign interests in this region not to mention NGOs (not the charity kind) who thrive and exist for reasons completely external to this conflict. Iran funds these one set of guys, we give money to Israel, and Russia helps Syria politically, who funds a different set of guys, and so on and so forth. This is an oversimplification of course, but we can see that this is about influence. Without this conflict, many countries and NGOs lose bargaining powers.
Historically, if we use solely ethnic identity to define statehood/nationhood we create weak states in the long run. The problem is of course the majorities and minorities of ethnic groups wax and wane. Assume Blueland has a minority Purple People population. Assume Blueland is founded on the concept that it is for the the Blueanese. Eventually if due to birth rates the Purpleansi become a large enough minority, the state will either have to amend its founding principles to include the Purpleansi or there will be a conflict. So, right now there is a Jewish state of Israel, and an Islamic pseudo-state of Palestine. Let's say in 100 years the Zoroastrian minority in Israel has a baby boom and are now a big population in both. Houston we have a problem. See the post-colonial mess that is other Middle Eastern States, Africa, etc.
These arguments are oversimplifications, but are just a Slashdot post with no sourcing to describe some of the problem. The solutions are probably as most solutions, difficult. Vote the leaders all out of power would be one really good start. Good Luck with that, we can't even do that here in the USA. If there were an MLK, or Gandhi like figure in Palestinian community perhaps this would work. Imagine a Salt March type event in this region. If Israel is truly the "occupying" force Civil Disobedience is the only demonstrable way a minority can gain true success against a majority. That means filling the jails, and using non-violence. The culture of the region may not lend itself to such action. Just my 2 cents. Thinking you know how to solve this problem is about as wise as starting land-wars in SE Asia.