Sure. We can say the same about the middle ages and prehistoric societies. It's entirely possible that one day Palestine (or we can call it Israel who cares what the country is named) can become a country where all these people that want to kill each other today and lay their claims to the land can be more like Switzerland. The likelihood of that happening in the immediate future is pretty slim. These are long term processes. If we want to experiment let's pick another location in the region that's less complicated, like Syria, Yemen, Iran, Iraq, Lebanon, Jordan, Saudi Arabia, Qatar, Egypt- pick one. when those become like the UK or Switzerland or France or Germany, i.e. prosperous, free, democratic countries, then we can try this in "Palestine"/"Israel". And really, if we turned the entire middle east into the EU then the tiny little piece of land people are fighting over becomes less of a problem anyways because there's not the same shortage of land/resources. I'm sure many Jewish people would prefer to live and work in Beirut for example or live in some remote area in Syria or Iraq and grow weed. "A wolf will reside with a lamb, and a leopard will lie down with a young goat; an ox and a young lion will graze together, as a small child leads them along." - beautiful.
The US tried to bring democracy to Iraq ... and Russia. That didn't quite end up as expected.
Seriously though, I think it could become. One day. It's been going the opposite direction. These are processes that are measured in generations. There are some major issues that would need to be addressed (like being a safe haven for Jews from persecution) even if the middle east emerges from it's "dark ages". Also I don't think the parties here really want this sort of solution right now (i.e. they wouldn't even be willing to work towards it and they're actively working against it).