Perhaps you need to re read the post. What Solomon is saying is that the Palestinians have a perverse incentive to keep the fighting going, while Israel has a positive incentive to conclude the conflict with a "Two State" solution. So long as the Palestinians can get access to foreign money and aid, they are free to continue doing what they are doing today, rather than seek a peace treaty and end hostilities.
A Palestinian "state" would be expected to be self sufficient the way other states are, and to devote their resources for the betterment of their people. As an independent state, they would no longer be automatically entitled to aid from Israel (which is essentially carrying out its duties as the de facto administrator of Gaza and the West Bank), and most other states in the region would expect the Palestinians to shoulder their own load as well. The Palestinians could indeed do this if they wished (consider the radical changes to government and society in South Africa after the end of Apartheid, for example.)