The interim peace deal was the best Netanyahu could put forward without his coalition coming apart. Israel wants a total surrender on final status issues like E. Jerusalem, settlements and Palestinian refugees, in other words the PA gets the current Status Quo and nothing more. The goal of many in Israel is that Holy land become a Jewish only state and any deal or PA state is simply out of the question.
At least 1,000 Israeli Arabs protest death of Palestinian infant in deadly West Bank arson (Haaretz)
from the article: Abbas urges Quartet to draft new peace plan