Colin Powell was in Lima, Peru on September 11th, where he was part of the Special General Assembly of the Organization of American States. They were set to sign the Inter-American Democratic Charter, which was meant to defend democratic governance in the North and South American states. It has zero to do with Israel or the creation of a Palestinian state.

So Colin Powell wasn't really on his way out. He stayed in office until 2005 when he resigned, possibly at Bush's request at the start of Bush's second term.