Arabs don't want peace.
Israel is a tiny speck of land surrounded by 22 Arab and Persian nations consisting of more than 15 million square miles. They could easily create a "Palestinian state" in that area if they gave a damn about the Arabs they call Palestinians. But they don't.
The major obstacle to peace is that Arabs demand the "right to return" for Palestinians and will NOT compromise.
Israel rightly refuses and it will not compromise.
What it means is this: Some 800,000 Arabs (at most) fled Israel when it became a state. Arabs attacked it on the date it became a state. The Arabs left of their own volition, many at the urging of the attacking Arabs. Many Arabs stayed and are citizens of Israel today.
But the Arabs demand the right to return for (pick a number) millions of "Palestinians." The certain result would be to turn Israel into an Arab state and Jews then would be as unwelcome as they are in any other Arab state.
It would be like the United States inviting 200 million Islamic fundamentalists to move in, and start voting.
Another issue is the "occupied lands." Israel defeated another attack by Arabs and kept some of the land it conquered, for strategic reasons. They turned part of it, the Gaza strip, back over to the Arabs and now are constantly attacked from that area. Wisely, it refuses to give the remaining land back, because it would not only constrict Israel's growing population but also would put most cities in Israel within artillery or missile range.
As long as the Arabs make demands they know are impossible to meet, there will be no peace.