It's not because Israel doesn't want it and rather continues its land grabs and the US and the EU are not willing to enforce it (e.g. through sanctions). Simple as that. After 9/11 there was not serious effort.
Well you say this and others also say that but when I try to explain what is - in my eyes - the main problem, then I get no answers.
So, once again : as a hypothetical,
If Israel would withdraw to the 1967 borders and dismantle all the settlements in the West Bank and stop the border controls with Gaza, and surrender East Jerusalem,
Can you or anyone else honestly say that Israel would be at peace with all its neighbours and the Arab and Muslim world ?