That wasn't true, in 1948 the majority of Jews and Palestinians were happy to live side by side. However, the surrounding nations were against it for a number of reasons and so paid for the Palestinians to fight a war that seemed certain for them to win, but they lost. After that it seemed impossible for them to live side by side.
I was referring to the Oslo Accords in the 90s when I said I thought it was possible. There have been many promising discussions to a two-state solution but it is all but dead at this point. It seems highly unlikely.