One side has to retreat much more than other the side for reconciliation in such a level to take place.
Usually, countries make such reconciliation if one side is clearly on the back foot. Either in a post-war time when one side has already been defeated (e.g., Nazis after WWII, Japanese after WWII or Germany after WWI) or it is in an even a worse situation than post-war as the result of other means of warlike sanctions thus have no choice but to reconcile (reconciliation from the point of weakness) with their enemy.
Human beings have shown to do not reconcile in such matters. Well, they do reconcile but mostly when they are kids in their play; it is very uncommon at international relation level for hostile countries to make any reconciliation. Once a nation perused a long-term fundamental policy, it becomes really challenging and even impossible to make any reconciliation. For example, Russia and the US were, are and will be forever enemies; the US wants to control Russia and Russia wants to bring the US down and climb up itself. Unfortunately, these policies are natural because they are rooted from the nature of human beings and how they view power and its relation to survival, which, counts as the most important thing in the human mind.
Series of historical events prior to 1979 had made the Iranian nation very sceptical and deceitful to the west (at that time), which lead to the 1979 Islamic revolution. Khomeini was a leader. He got millions of supporters by acknowledging everything that Iranian hated about Shah and also introduced his view of political Shi’ism to the revolution (Shi’ism is one of two branches of Islam practised mainly in Iran). The issue of Palestine was the most important aspect of his political ideology, in term of the foreign policy.
(Iranian policy toward Israel has also to do with the fact that Iranian are the minority in the Islamic world and their region)
Ever since then, Iran has made the decision to oppose Israel. And they have invested and sacrificed to the extent that they cannot really go back. As long as nothing fundamentally changes, Iran will oppose Israel. Israel will also oppose all countries that are as large as Iraq.
Iran and its regional allies along with Russia have just passed through the hardest period of wars in Syria (Jihadists, the emerge of ISIS and regime change) and Iraq (ISIS) successfully, despite all odds. There is no reason for Iran to make any meaningful reconciliation with Israel. And like always. Israel is not considering such matters.
In Iranian perspective, in the best-case scenario, just like the post-Afghanistan invasion when Iran and west held serious talks about nuclear and other issues, I assume Iran would be willing to fully seize its nuclear enrichment (perhaps for 10 years) and make Hezbollah less militaristic In return for giving Palestinian the rights to VOTE and have their own state (two-state solution) and the ease of sanction. But Israel (the US) rejected the best scenario at that time and I think they will do the same now even though Iran is very unlikely to make that much of reconciliation that it did when it had US troops on its borders occupying one country after another.