The expectation has been for Israel to make an offer that the Palestinians refuse. Israel makes another offer and the Palestinians refuse it again. These offers have come from the Labor Party and the Kadima Party. Both were refused. So what happens next? Another offer that will be refused? Then another offer that is refused? Israel isn't going to offer the Palestinians the "right of return," so every offer (even if there are 100 offers) will all be refused. Where does this get anyone? It's the wrong pattern. If the two sides could make a deal, it would be possible to sit down and decide how far each side can go (and it can't be Israel closing 100% of the gap between the two sides). If they can't compromise (both sides) then there won't be a permanent peace deal in the current situation. At this point, I don't see that Mahmoud Abbas is willing to compromise on the most contentious issues, such as the Temple Mount and right of return. So, managing the conflict is the only option.
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from the article: No realistic chance of permanent Middle East peace