I feel this is a big event. I don't feel it will be a major factor in solving the Palestine issue. Trump IMHO has made it worse by showing major favoritism toward one side.
They've always said that peace was contingent on concessions. The previous administration effectively that the Israelis should unilaterally withdraw to 1967 borders, and concession negotiations should start from there. This was harmful, because it gave the Palestinians and other countries unrealistic expectations, and made talks harder to navigate. This time, Israel went to the other extreme. They said they would not only not unilaterally withdraw from existing borders, but they would annex additional areas. The concession for this peace agreement (which, as pointed out, is largely symbolic) was the abandonment of those plans. (I believe the Israelis were looking for a way to walk away from that too, while saving face. This joke of normalized relationships is a convenient excuse for that.)
The net result of all these things is no real achievements. The Arabs and Obama moved the goalposts one way, so the Israelis moved it the other way. Now they're agreeing to meet in the middle. Everyone saves face. Hoorah.