The PA needs to unilateral declaration of statehood then work with Israel on security, water, refugees and land swap for access to Gaza and a port. While many in Israel would prefer deporting all Muslims or limiting them to A areas and Gaza only. The gap is too great for any peace deal until borders are set but with conditions that the other issues be resolved before full statehood.
Jordan foreign minister says to speak with Kerry on Israel-Palestinian conflict (Reuters)
from the article: U.S. says recognition of Palestinian state premature