The One State Fantasy
Yes, it sounds far-fetched. But negotiations along these lines have actually made progress in the past, most recently under the Israeli government of Ehud Olmert.
The only progress toward one state (if that is what anyone wants to call it) is when Israel expands settlements which will lead inevitably to one state called Israel with stateless and rights-less Palestinians living inside it.
The United States should insist on negotiations toward a two-state solution now and that means applying pressure on Israel and the Palestinians to start talking. Once two states are achieved, and they actually have been living side by side in peace for a decade or two, one-state might look like a serious option. For now, it barely qualifies as a dream.