When somebody discusses a way to make peace, there is a war. In a war, both sides have a goal, territorial gain, survival or whatever. Once a side has no goal or has no means or will to reach it, it capitulates. Once a peace treaty is violated, a war begins to make the other side either to pay for the damage inflicted or to comply to the treaty.
PLO's goal is clearly visible and often voiced. They officially demand to (more or less unconditionally) hand them over all of Westbank, Gaza and east Yerushalaim + a right of return. They are determined to have a total war until the other side, Israeli government, gives up and accepts their conditions.
Israeli goal, or, better said, the goal of current Israeli government is not clearly defined, but summarized under the word "peace", or "two states solution". Israel is also interested in survival
This "peace" means end of terrorist-intifadan headache. Unfortunately, capitulating before PLO's demands would not bring the end of terrorism or the headache. It also is impossible, as allowing a right of return would be against the survival priciple.
Current Israeli government did not formulate a plan to end the headache, but continued combatting a minor guerilla against it's enemies without undertaking the effort to end the war by an offensive leading to total victory and making the enemy capitulate because of the abscense of a fighting force and any of it's leaders willing to carry on the fight.
When they were offered a model of a "peace plan" by a foreign power, they agreed without even looking closely and changing vital things to reach the goal, the end the headache. For me, it looks like depressive passivity, while the enemy is motivated.
Israeli will is paralized. Once the other side violated the treaty, Israel ignored and continued regarding the treaty as existant. This is a dangerous precedent, allowing the other side to regard the treaty as not binding. To show some activity, they simply done the job wich, according to the treaty, arabs had to do. They tried to kill the criminal Rantissi, but having not explained their motives, reasons and intentions, they earned international condemnation and simply lost yet another PR battle.
I am worried about the future of Israel.