The current situation is a short sighted status quo when 50% of the people living in Israel/Palestine are Jews and 50% are Arabs. It is not sustainable with each group being at the other's throat forever.

Why is it not sustainable? The current situation has persisted despite massive diplomatic resources thrown at trying to change it. It certainly can continue indefinitely.

It's a terrible situation, but that doesn't mean it's not durable. There are many millions of Jews and many millions of Arabs living in the area. Neither group is going to leave. So if there isn't a path to peaceful coexistence, they will just be at each other's throats forever.

The difference between the current situation and the Egypt-Israeli peace is structural. Peace was achievable because Sadat and Begin could agree to "no more war" even if minority factions within their nations disagreed. That's one of the advantages of politically stable countries. There's a group in charge, and they can control their countries' official policies.

But that's not the situation with the current conflict, because no one can internally force peace on Hamas (or whatever successor organization ends up being the minority faction that will want to continue to fight the Jews). There's no way, at this point, to create a strong enough political structure that can prevent Hamas from either seizing power or continuing the fight. And because Hamas has massive external support - and there will always be massive external support for a group fighting against Israel - they're not going to wither or get worn down, no matter how long the fight lasts.

Which is why there's no longer any support within Israel for a two-state solution. The current situation is terrible, but now they believe a two-state solution would be worse for Israel than the status quo.