The �two-state solution�, outlined in the Oslo agreements and considered to be key to regional peace arrangements for the Middle East, entails a sustainable peace agreement between Israelis and Palestinians on borders, Jerusalem, refugees� right of return, and territories. This paper discusses the historical background of the two-state solution, and the main actors in the peace process, as long as its consequences for Jordan and Palestine in light of the US administration. Jordan has long linked its national security perspective with the establishment of an independent, sovereign Palestinian state based on the 1967 borders, with East Jerusalem as its capital.