The time for a comprehensive peace treaty and actual Palestinian statehood has long passed. The best chance for it was sometime between 1993 and 2000.
On the Israeli side, it was the last time there were anything resembling left-of-centre governments. The entire electorate has shifted to the right in the past 25-30 years. Part of it is that the religious, Haredi sector of the society has higher birthrates and has been proportionally growing in size. They have also been more politically active, after decades of only partial involvement in what they see as secular politics. I don't have to tell you how they feel about Palestinians or security issues in general. They also don't have to serve in the army, so hey, of course you'll support IDF operations.
Another part of this is the massive post-Soviet immigration to Israel. The country had 5 million people in 1990 and then proceeded to receive more than a million new immigrants from the former Soviet republics over the next decade. This population is largely secular with some not even being legally Jewish. They are fairly liberal on social issues, but hard-line on security stuff. To give you an indication of their political importance, at its peak in 2009, the largely Soviet immigrant-supported Yisrael Beiteinu party held an eight of all seats in the Knesset.
Finally, there has also been a general hardening of Israeli views on Palestinians and the peace process in the aftermath of the Second Intifada and all the violence of the last couple of decades. Until this recent Hamas rampage, there had also been a sense that Israel can keep a tight leash on both Gaza and the West Bank without much cost.
On the Palestinian side, the turn of the millennium was the last time there was a united leadership and some sense of political direction. Arafat both commanded the allegiance and respect of most Palestinians, and had enough credibility as a veteran of the struggle to be able to offer some concessions. Now you have what are essentially two Palestinian para-states with leaderships that fought a civil war. Neither are democratic in any sense. Hamas is Hamas, and Fatah seems to have lost all credibility among even the residents of the West Bank. Abu Mazen is 88 years old and hasn't allowed elections in almost 2 decades because Fatah would almost certainly lose them. His deputies and other close associates in the PLO are 70+ as well.
There's simple a sense of there not being anyone on either side willing or able to negotiate.
