The "settlements" are not an obstacle to peace but a precondition for peace
Wars end when one side knows that it has lost and is willing to make peace. The Arab side refuses to accept that it was defeated in four wars and various insurgencies. Arafat walked away from Ehud Barak's peace offer in 1999 without a reponse and Abbas refused to even consider Olmert's similar offer in 2008. Like the Duke brothers in "Trading Places," the Palestinian Arabs think they can re-trade the Israeli War of Independence, go back in time, erase the historical record, and reclaim victory. If you lose and refuse to make peace, you pay a penalty, and the normal penalty is loss of territory. For opportunistic reasons (placating Muslim trading partners and restive Muslim populations) most countries indulge the Muslim fantasy that defeat is inconceivable and therefore reversible. That simply leads to more futile violence.
Just as important is the Jewish presence in what would have been a Palestinian state, if the Palestinians had wanted to have a state in 1999 or 2008. That ship probably has sailed; chaos in the region around them makes it impossible de facto to create a Palestinian state today. If the Palestinians wanted peace, then they would tolerate a Jewish population in their putative state, just as Israel embraces a 20% Arab minority. The fact that the Palestinians demand a state entirely Judenrein ("clean" of Jews) betrays hostile intent.
To indulge the Palestinians on the matter of ethnic cleansing of Jews from Judea and Samaria is unprecedented in international peace negotiations, and utterly and despicably hypocritical on the part of the majority of Security Council members.