Who is going to vouch for the security of Israelis within the green line, once the settlements are gone? IDF presence in the west bank guarantees that. No Israeli PM would dare take the responsibility of leaving these territories with no some kind of international and Palestinian guarantee that Israelis can live with no fear of rockets falling on them and recognition of Israel as a sovereign state. When Abbas says that the PLO will not recognize Israel as home of the Jewish people (also not within the 67' borders), then what motivation should the people in Israel have to go to negotiations? You must understand that after having left Gaza new excuses were made up to condemn Israel and even more rockets have been shot on Israeli cities. The diplomatic situation is bad, but on the other hand, it was actually never good.
Labor court orders Jerusalem light rail operators to return to work (Haaretz)
from the article: Israel may have missed its chance for Mideast peace