Islamic terrorists are attacking the whole civilized world as a part of the World Jihad. 

Creating 23rd Arab state and a second state of Palestinian Arabs - in addition to Jordan, which is the 1st Palestinian Arab state - will solve nothing. That state will be ruled by Hamas militant extremists and their war against Israel will continue and will result in more bloodshed from both sides. 

Israel should return Gaza to Egypt, and parts of the West Bank to Jordan. Billions of UNWRA money should be transferred to Egypt and Gaza to make them interested in the deal. That exchange could resolve the Arab-Israeli war for a long time.