Well, without doing anything, the Pals would live in a country with Jerusalem as capital anyway, at least de facto in their not really nowherelands, where Israel is exercising jurisdiction, however it is called, ad lib, and a state with that capital cannot be jewish alone. Less utopic than a two states. Why should they want to live somewhere else?
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ISIS suicide attack kills 5 militiamen in western Libya (AP)
from the article: Top U.S. official: We won't accept partial settlement freeze