Both Israel and Palestine are now states. The two-state solution is now final. They both have borders or geopolitical boundaries recognized by the United Nations which has remedied its mistake of 1948 when it established Israel but not Palestine.
The next steps toward a complete resolution of the issue for Palestine to be admitted to the United Nations as a member-state are:
1. Establishment of diplomatic relations between the state of Israel and all Arab states and Iran to recognize Israel as a legitimate state.
2. Recognition of Jerusalem as an Israeli city while being a place of importance and of pilgrimage for Judaism, Christianity and Islam.
While the status of Jerusalem is the status quo, establishment of diplomatic relations between Israel and all of its Muslim neighbors first requires cessation of all Palestinian violence, most importantly from the Hamas dominated Gaza strip on Israel and of Israel on Palestine.
Until the above is accomplished, Palestine will remain a non-member state of the UN and Israel a member-state.