A two-state solution takes into account natural homelands
A two-state solution in which a separate Palestinian and Israeli state would exist has long been a preferred method to achieve lasting peace in the region. Efforts to divide the region and create independent and autonomous states have long been the optimal diplomatic method dating back to the 1937 Peel Commission report.  The push for a natural homeland stems from two forms of nationalism: Palestinian nationalism and Zionism. Palestinian nationalism holds that the people of Palestine, who are predominantly linguistically and culturally Arab and are descendants of those who lived in the region during the times of Abraham, have a right to self-determination and sovereignty in Palestine. The movement is in opposition to Zionism, which holds that Jewish people have a right to self-determination and sovereignty in Palestine (Land of Israel).  A two-state solution that carves up the Holy Land would succeed in providing a natural homeland to the Palestinians and the Israelis. It both respects Palestinian nationalist cause and Zionist causes. An equitable division of the region would also ensure that one ethnic group is not subjugated to the other, given the existence of two separate states.
The most important area that would have to be divided would be the City of Jerusalem, which both Palestinians and Israelis have equal claim. It would be almost impossible to divide this area in an equitable way and a concept of shared power in the city or the creation of an independent City of Jerusalem may spur violence in the region and do more harm than good.
This argument relies on the belief that Zionism and Palestinian nationalism are both valid movements that deserve recognition and to have their goals achieved. That is, that Jews deserve a Jewish state and Palestinians deserve a self-governed state on their historical land.
[P1] Zionists desire a Jewish homeland and Palestinian nationalists desire a Palestinian state. [P2] The conflict results as tension among these two goals. [P3] The tension can only be resolved if both goals are achieved. [P4] Both goals can only be achieved by a two-state solution.
Rejecting the premises
[Rejecting P3] If a solution was enforced, peace could be achieved without meeting both goals. [Rejecting P4] Other creative solutions, such as a confederacy, could achieve both goals without two states.