Israel was land given to the Jews after world war two. However the only issue is the Jews did not own said land, so they killed many Palestinians, drove them away from their homes and took away their land and rights. Now Israel continues to do this by building illegal settlements on Palestinian land.
No, a two-state solution is not consistent with democratic principles, because the land rightfully belongs to Israel. The world cannot decide that Israel's land rightfully belongs to Palestine, after they offered the land to Israel as reparations for World War Two. The world can't decide that something is lawfully theirs and then change their minds later.
A two state solution to Israel and Palestine is not the answer in regards to solving worldwide conflict. Israel is an ally to the United States and the later should be careful about how it introduces democracy to the Israeli. There is no two state solution in the United States.