Hopefully someone with a better understanding will chime in if I'm at all off here, but from the standpoint of entities who are working on a larger scale, I believe the argument goes something like that a two state solution is incompatible with israel's settler extermination goals, while also benefiting Palestine and Palestinian people vs. their current situation, and so sometimes it makes more sense as the position to take, even if it seems weaker on the surface than it is; because it is simultaneously the more diplomatic and peaceful position, while also being one that materially runs counter to what israel is about. For israel to truly embrace peace and accept the sovereignty and self determination of those they have dehumanized and targeted for extermination for decades implies losing the point of being out there in the first place, it implies having to give up on their ingrained culture of superiority and entitlement, it implies facing accountability on a large scale system level for what they have done in order to make the peace stick.