From the recommendations of the Iraq Study Group, released today:

The United States will not be able to achieve its goals in the Middle East unless the United States deals directly with the Arab-Israeli conflict.
There must be a renewed and sustained commitment by the United States to a comprehensive Arab-Israeli peace on all fronts: Lebanon, Syria, and President Bush’s June 2002 commitment to a two-state solution for Israel and Palestine. This commitment must include direct talks with, by, and between Israel, Lebanon, Palestinians (those who accept Israel’s right to exist), and particularly Syria—which is the principal transit point for shipments of weapons to Hezbollah, and which supports radical Palestinian groups.
The United States does its ally Israel no favors in avoiding direct involvement to solve the Arab-Israeli conflict. For several reasons, we should act boldly:
• There is no military solution to this conflict.
• The vast majority of the Israeli body politic is tired of being a nation perpetually at war.
• No American administration—Democratic or Republican— will ever abandon Israel.
• Political engagement and dialogue are essential in the ArabIsraeli dispute because it is an axiom that when the political process breaks down there will be violence on the ground.
• The only basis on which peace can be achieved is that set forth in UN Security Council Resolutions 242 and 338 and in the principle of “land for peace.”
• The only lasting and secure peace will be a negotiated peace such as Israel has achieved with Egypt and Jordan.
This effort would strongly support moderate Arab governments in the region, especially the democratically elected government of Lebanon, and the Palestinian Authority under President Mahmoud Abbas.

There’s more in the full Report, including some quixotic recommendations on Syria (that it persuades Hamas to recognize Israel’s right to exist, that it stops funding and arming Hamas, that it stop murdering Lebanese leaders, that it orders Hamas and Hezbollah to free the IDF soldiers — in return for which it would receive the Golan Heights).
Full report (pdf).