Israel could administer some form of governance too, so that the Arab areas would be financially stable and independent of foreign interference.
This is the solution. I would add that Israel should control education in Judea and Samaria, so as to avoid raising further suicide bombers.
Israel should continue to profess adherence to the concept of a two-state solution for World consumption, in the knowledge that the Muslims will never agree to recognize Israel's right to exist. Israel can continually repeat Glick's words: "It wasn't we that made it fail."
Thanks for the note of agreement. I agree with your comments also.