For Palestinian Israelis to join a Palestinian state they wouldn't have to move an inch, or give up property. The only thing that would move would be the border. So "moving people around like chess pieces" is a ridiculous statement. The point is another one: Palestinian Israelis may wave Palestinian flags in protest against their state (Israel), but they would pick democratic Israel anytime over the corrupt PA regime from Tunis. Abbas knows this and doesn't want to loose their support. The other reason is that he is betting on demography, which unfortunately shows that he is not interested in two states for two peoples, but in two states for one people. Because, if you believe that this is one country, but it must be divided to create 2 states for 2 peoples, why not dividing it more or less along logical ethnic lines without moving anyone (except some settlers)?
Police arrest 18-year-old Palestinian suspected in Old City stabbing (Haaretz)
from the article: Abbas: Olmert offered PA land equaling 100% of West Bank