Netanyahu declared his acceptance of a Palestinian state in June 2009, after running for elections on a platform of "no Palestinian state, only autonomy". He did not call for a government discussion and acceptance of this, nor for an internal Likud debate on this deviation from their basic ideology. But let us assume that Netanyahu was sincere. The Palestinians however had every reason to doubt it, and they demanded something that will show real intent, a TOTAL freeze of building in East jerusalem and West Bank. They did not demand it from Olmert, who already demonstrated his sincerity. What Netanyahu offered was a PARTIAL freeze: No freeze in Jerusalem, and in WB freeze outside the line of built area of settlements. Within the settlements, there was no freezing. Abbas insisted on Full freeze (which is actually what international law demands). For a partial freeze Abbas negotiated indirectly. Finally, under US pressure, he agreed to move to direct negotiations. Should this be seen as "waste of an opportunity"? I think Abbas' position was reasonable: If Netanyahu cannot do a freeze, how can you expect him to push for an actual evacuation of settlements? The present situation seems to justify such doubts.
Israeli moderately wounded in stabbing attack near West Bank settlement (Haaretz)
from the article: U.S.: One year may not be enough to achieve Mideast peace