A two (or more) state solution is also a possible outcome. For example, Gaza and the West Bank could become Palestine as a separate country from Israel. There would need to be a massive change in borders for that to even possibly work out, but an independent Palestine is more likely to lead to eventual stability than mashing everyone together.
The suit is there to reduce fatalities and minimize injuries, not to avoid every poasible injury.
Sometimes there are situations where touch and feel is critical, although my understanding is that the preferred approach today is remote detonation where even the suit is away from the likely blast radius.