A 2 state solution was never realistic. Throwing out unworkable peace solutions or quibbling over details instead of outright saying they're not ready for peace so that they can continue violence is a US (and israeli) tactic you'll see over and over.

The US and Israel both knew Palestine was never gonna give up its best land to hostile invaders, as the borders would make their economy entirely dependent on Israel, and Israel media made it very clear that such a state would only be temporary.