Would it be better for US to take a more neutral stance between Israel and Arabs since the 1960s?

[Crumpets]

Not starting in the 1960s, no. But the one-two-three-four punch of Arafat rejecting the 1994 agreement, the 1995 Rabin assassination, Bibi's first election in 1996, and the Second Intifada starting in 2000 showed that a long-term sustainable peace agreement wasn't really possible or even desired on either side, and the US's focus should have shifted more to a mindset of containing the conflict to Israel and Palestine (and avoiding intervention by/entanglement with Iran, Hezbollah, and other actors) rather than trying to play an active role in ending or shaping the conflict. That was never going to happen, especially after 9/11, but that would have been my "with hindsight" policy.