In my view, Sharon was doing all he could to make a two-state solution impossible, by making any sort of VIABLE Palestinian state impossible.  The "abandonment" of Gaza, I think, was intended as a counterfoil to further encroachment/control/domination in the West Bank.

I don't know enough about Israeli internal politics to comment, and so won't even try to predict what sort of political constellation might form there in the post-Sharon period, but I have the feeling that, due to relentless Israeli efforts to create "facts on the ground", the window for any reasonable two-state solution may already have closed.

On the Palestinian side, it seems to me that the recent trend toward more radical and Islamist-oriented politics is likely to continue, to the benefit of no one, but in a sense as the inevitable result of the situation the Palestinians are in.

I look forward to comments by others who are more knowledgeable (and hopefully more optimistic) than I, but find it hard to see a happy ending anywhere on the near horizon.