You are right, it falls short of the demands of international consensus, but so does the other side. This consensus states that a Palestinian state is to be formed on land occupied in 1967 and Israel has stated that it intends to keep some of this land and has not halted settlement expansion. His statement is a baby step, which is the most anyone can expect. A total capitulation or turnaround is unrealistic, on both sides. So let Israel take a corresponding baby step (which they won't), and maybe there would be some movement.
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from the article: Hamas denies Meshal said group would consider recognizing Israel