Is a two-state arrangement really fair and based on justice?
It depends on one's standards. If weighed against an abstract notion of "absolute" justice, creating a Palestinian state on only part of historic Palestine represents an historic injustice. If weighed against complete implementation of UN resolutions and international law, establishing a Palestinian state on only 22 percent of the land when the United Nations partition resolution designated 45 percent to become a Palestinian Arab state is not really fair.
In the real world, historical injustices sometimes become permanent. They do not become just or fair because time passes or power consolidates, but some parts of them do remain. The massive historical injustice that led to the dispossession and near-extermination of Native Americans in the first three hundred years of what would become the United States is no less unjust now. But how that continuing injustice can be addressed did in fact change. In the year 1702 it might have been possible to legitimately advocate sending the European colonists back to Europe and returning all the land to the Native Americans; three hundred years later that is not possible. Combinations of national recognition, economic reparations, affirmative action, protection of remaining tribal-held lands, and more are the new demands of Native Americans.
Certainly the Palestinian case is different. At the beginning of the 21st century al-Nakba, the catastrophe, in which Palestinians lost their land was just over fifty years past. Many Palestinians, now in their sixties, seventies or eighties, remember fleeing their homes and still hold the keys to the door they long imagined re-entering. It is not something familiar only through history books or dusty engravings. However, history has moved much faster in the last half a century than in the many years before it. With the shifts of the twentieth century, Israel has been consolidated as a vibrant, highly technologically advanced, powerfully armed western-oriented society under the absolute protection of the United States.
Palestine has the potential to reach as high a technological and scientific level, largely through the intellectual capital of its young and highly educated population. But it remains only a potential. Many, perhaps most, Palestinians and at least a few Israelis believe that once an independent and sovereign Palestinian state is consolidated, that the long-term best interests of both peoples will be found in merging the two small states into one, based on absolute equality for both nationalities and for all its citizens. Certainly such an approach could only result from a free and open choice by both Israelis and Palestinians. But considering such an option is for the future; it cannot even reach the discussion stage until Israel and Palestine, and thus Israelis and Palestinians, can sit across a negotiating table as equals, not while they face each other as occupied and occupier.