The bishop is somewhat confused. There is no such thing as "occupied Palestinian lands." The West Bank was formerly occupied Jordanian territory. It is the land Israel occupied on the Jordanian front after Jordan, Egypt, Iraq, Lebanon and the other Arab states initiated a war against Israel in 1967. But Jordan has declined to reclaim sovereignty over the area. (Gaza, of course, has been a province of Egypt for millennia.)

There is already a two state solution. The United Nations created Israel for the Jews and Jordan for the Arabs. There is no need for a three-state solution.

There is no reason not to move the embassy to Jerusalem. Jerusalem has been the capital of Israel since the time of King David. Other countries are permitted to decide where their capitals are and Israel should be also. Terrorist threats to oppose the embassy transfer are rather a reason to proceed than to delay. Yielding to terrorist demands only encourages terrorism.