You are mistaken. Natanyahu is not interested in all the territories, he is now riding on a sort Israeli consensus that aims to get as much land in the WB as possible with as little Arab population as possible, with all Jerusalem included (hoping to change its demography). This consensus includes Barak and possibly most of Kadima. Of course, the Palestinians know this and this is why they will not negotiate in these terms, and (most likely) there will not be a Palestinian state. Only firm action by the US government could challenge the policies of this consensus, but it's not happening and might not happen at all.
Law expanding definition of terrorist activity passes first Knesset reading (Haaretz)
from the article: Barak, Mubarak talks to focus on coaxing Abbas to negotiating table