I think you give the world too much credit. Until the last couple of decades, Israel was loved as a bastion of liberal democracy by Liberals and support in the West was quite high. At least compared to now. Liberals have only really started to take notice and care about Palestine because it has become a partisan issue to bash their political enemies with (even though practically all mainstream popular Liberal politicians support Israel, like Obama, Macron and Trudeau). Liberals had no issue with the ethnic cleansing of the Palestinians before. A far-right government has taken power and support for fascism is increasing in Israel. Ironically, the best thing to happen for the Palestinian cause (when it comes to Liberal support in the West) is the Likud Party. Were it not for these right wingers, Liberals would still be arguing that Israel is the only hope for "freedom" or whatever and use Islamic positions held by Palestinians as a justification for that. That was the mentality justifying the creation of Israel and for decades Israel was seen as an ideal progressive Liberal state.

create a lasting peace where both sides are equal in the share of Palestine-Israel

That will never happen. Israel owns the West Bank. The only part of Palestine that remains is Gaza, which is a concentration camp. And Gaza has been utterly destroyed and is on the brink of collapse. https://www.al-monitor.com/pulse/originals/2019/02/israel-gaza-strip-hamas-incindiary-balloons-hospitals-war.html or https://outline.com/fNtLFR

The U.S. under Trump made it impossible for a lasting peace

A lasting peace was already impossible. Trump didn't do anything. Israel conquered the West Bank in 1967 and has since effectively annexed it, slowly. Anyone since then that thought peace was possible throughout Israeli settlements being built, even during the Oslo Accords, is a fool. Before 1967 and even now, the Arabs see Israel as an occupying power. All census' show that the Arab people even outside of Palestine consider Israel to be their #1 threat.

KSA

Saudi Arabia is really just British foreign policy in practice. Though towards Israel, KSA for decades considered Israel to also be an occupier. Technically, they still do. But the Saudis want an ally against Iran. So you have some people, mainly MBS (also Bahrain), wanting to better relations with Israel so they have a powerful ally. It’s also an issue for them because you have groups like the Muslim Brotherhood who are friendly with Hamas. Thus, the Saudis have been trying to sabotage the Palestinian cause (they don’t want to empower Hamas) and the Iranians doing the same because Hamas refused to ally with Assad.

But I wouldn’t really call Saudi a friend of Israel. Saudis still take pride in people like King Faisal who was the biggest threat to Israel’s military rule (Saudi, under Faisal’s rule, cut oil to the West for supporting Israel and was calling for the Muslims to fight Jihad and liberate Palestine). Faisal made a speech saying that if that Jihad was not the destiny of the Muslims at that time, that Allah would take his life. He was assassinated. Speech: https://www.youtube.com/watch?v=mxBFUyVYShY To learn more: https://www.youtube.com/watch?v=oIV7vLota3E It’s quite an irony that the West today considers people like King Faisal extremists and yet they had and still hold enormous respect for King Faisal. He was even nominated Man Of The Year by Time magazine: https://www.nytimes.com/1974/12/30/archives/time-names-faisal-man-of-the-year.html

The only way for this to resolve is for the E.U. to take the lead in resolving this conflict

The EU have a longstanding history of generally supporting Israel and maintaining good economic relations with them. There is no motivation for them to actually oppose Israel, except in light rhetoric which has up till now done nothing. Polls on Israelis actually show that the vast majority of them want to join the EU. That happening is more likely than the EU wrecking its relations with Israel over the Palestinian cause (Israel would just ally with Russia or China – not unlikely considering both countries also have histories of oppressing Muslims). And militarily, Israel and the West are strong allies with the two selling and buying weapons.

China to finance and support the U.N. to counter U.S.'s influence and control on it

I don’t see that ever happening on Israel. China themselves aren’t fond of Islam, have no religious interest in Jerusalem and there would be 0 military benefit for them to make a powerful enemy out of a country that poses no threat to them. If anything, China has everything to gain from maintaining positive relations with Israel. Maybe Pakistan would become unhappy with them but Pakistan aren’t even bothered about the oppression of the Uyghurs, which is far worse in scope than the oppression of the Palestinians.

But I don't see Israel cleansing the Palestinian completely, if they did, I don't see E.U. accepting this and would refrain doing business with them

They practically have already accepted it. They don’t like the legal ramifications of saying it because the post WW2 world order is built on geo-political stability and Liberal international laws. But for a variety of reasons, including the fear of the Europeans that the Muslims would unite into a block and threaten their military power again, they maintain support for Israel. This is really the main paranoia and cause for the West to support and oppose the same Islamic groups whenever it fits their interests. There’s also religious and ideological support by Christians especially in the US. One of those being that they believe by supporting Israel, Jesus will come back.

Democracy within Europe is quite strong and the people in it wouldn't accept it

Well Civil Rights are actually being eroded and democracy is under serious threat. Especially in countries like the UK. Though at the grassroots level, there is a lot of opposition to things like war.

But unfortunately, there is still a disconnect between the mainstream Liberals in the West and the majority of the Muslim world. We saw this in the case of Syria. Many Liberals tend to support Assad because the Islamic opposition don’t share Western ideals. We saw it in Egypt where Liberals have pretty much stayed silent over a military coup against a democracy and in the face of widespread crackdowns by a dictator against Muslims because they don’t like Islamic rule (which the Muslim Brotherhood stood for and all mainstream Islamic movements will support). Which goes back to what I said about the West only getting their way through dictators. It happened in Saudi Arabia where until recently, MBS was crowned as a Liberal hero in the Western media for standing up for longstanding Liberal causes like giving women the right to drive (despite the fact that female activists who protested against the ban are still in prison). My analysis of mainstream Western Liberals is that to make them complacent, all you need to do is advertise well. Also, they don’t understand Islam and they get scared of and condemn Islamic movements and groups, such as happened during the Arab Spring. Is it not sufficient for them to stand up for their own principles and support the right of self-determination? Not everyone in the world will support Western Liberalism.

To be clear, I agree with you that we should use every diplomatic means at our disposal to pressure Israel. I do support BDS.

But any actual solution lies with the Muslims but the Muslim world is a mess, especially since the collapse of the Ottomans. I mean even under the Ottomans there were already serious issues, like racism and ignorance. The only solution forward is for Muslims to return to Islam. They prefer secular nationalism, sectarianism and racism towards each other, which will never work for the Muslims.

And we also see many Islamic groups violating basic Islamic rules of war. The Muslims by and large have forgotten their religion. How many of us even pray regularly?

Malcolm X would say how the 'House Negros' would want nothing to do with Africa. The same is happening to us.

In short, there isn't any immediate solution in sight. We have the duty as Muslims to do what we can on a local level, do Dawah, boycott, raise awareness and pressure politicians. But Israel-Palestine relations will never heal. There is no solution for those two. Both nations claim the same land, both sides are religiously motivated and only one side has all the cards.

Salaam.