The Arab League, consisting of 22 Arab countries, and Iran, believe it or not, offered Israel full recognition and acceptance in return for a Palestinian state based on UN 242. That occurred in 2002, 2003 (Iran, under the moderate PM), and again in 2006.
Israel refused all of these offers, preferring instead to continue its colonial effort to create the Greater Israel including the West Bank, the Golan, and East Jerusalem.