At Slate, Fred Kaplan explains that both Israel and Hamas “have vital interests in this war, and the peace proposals offered by each — whether or not sincerely — have threatened the interests of the other”:
At various points in the war, Netanyahu offered or ceded to ceasefires and exchanges of Israeli hostages for Palestinian prisoners—but he always insisted on Israel’s right to resume the fighting after all the hostages were freed. Hamas’ leaders have insisted that any such ceasefire be permanent; otherwise, they feared (correctly) that Israel would intensify its military campaign after the last hostage was released.
Another conflict of interest: Israel insists (quite rightly) that Hamas must disarm and be stripped of all political power as part of any peace plan; Hamas (understandably) wants to retain power.
These interests are both rational and irreconcilable, meaning that the war is likely to continue, unless one side is defeated or both sides are pressured to stop fighting.
He also notes that Netanyahu’s self-interest isn’t the only problem:
Ethan Bronner, Jerusalem bureau chief for Bloomberg News (and one of the most experienced American reporters in the Middle East), says it’s a mistake to place the blame entirely on the prime minister. Bronner writes that not just Netanyahu but Israel’s entire government “believes deep in its bones that if it does not destroy and eliminate Hamas as a ruling military force in Gaza, that it will have failed its people.” This is seen as “an existential challenge.”
But Kaplan also argues that Netanyahu — and many other Israelis — doesn’t actually want to end the war:
Netanyahu had a moment when he could have scuttled the pressure from his right-wing partners, formed a new government, taken real steps to end the war in Gaza, made a bold overture to the Saudi royal family (who were eager to accept such a move), and used all of these moves to reset relations with once friendly but increasingly disenchanted political parties in Europe and the United States.
He didn’t do any of this, and the only plausible reason is that he didn’t want to. Netanyahu isn’t just kowtowing to the right wing or protecting his political power; he believes the things he says about the need to wipe out Hamas, and according to Bronner and other reporters, many if not most Israeli Jews believe those things too. At least for now, as long as the notion of living side by side with Palestinians seems suicidal to them, the idea of a two-state solution is untenable.