Israel can offer a return to discussing issues for the first time since Taba 2001, using the Saudi Initiative as the basis for negotiations, if the following happens: Shalit released, Total ceasefire and total freeze on arms smuggling, Palestinian acceptance of the Saudi Plan (a two state plan) as the basis. If met, in negotiation, Israel should seek mutual recognition, to draw an agreed border that approximates the Green Line but with some land swaps, aid for and symbolic recognition of refugee rights without a literal return to Israel, a demilitarized Palestinian state, a shared (administratively divided) Jerusalem, prisoner releases. And a deal that is held up by completion of Step 1- full disarmament of militants. In return, Palestinians get an end to occupation, robust economic aid, geographic viability, independence and recognition. Knowing what they'll get, Palestinians are likely to support such a compromise making Hamas rejection politically unsustainable.
Palestinians say 16-year-old shot in back at Shuafat refugee camp; in critical condition (Haaretz)
from the article: Arab leaders rule out amending Saudi proposal