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In a Newsweek interview on June 22, 2009, former prime minister Ehud Olmert stated that in his talks with Mahmoud Abbas, he had made fairly detailed offers towards an Israeli-Palestinian settlement, including:

a. Willingness by Israel to give the Palestinians 93.5-93.7 percent of the territories. The Palestinians would receive an additional 5.8 percent as part of a land swap.

b. A safe passage between the West Bank and the Gaza Strip. Olmert did not state who would have sovereignty and control over this passage.

c. Israel is not willing to accept the Palestinian demand for the right of return. At the same time, in the framework of a humanitarian gesture,Israel would be willing to accept the return of a defined number of refugees. Olmert did not specify a number, but made it clear that it would be "a very, very limited number."

d. On Jerusalem, Olmert proposed that the Holy Basin be under no national sovereignty and be managed jointly by Israel, Jordan, the Palestinians, Saudi Arabia, and the United States.

Saeb Erekat, who was responsible for negotiating on behalf of the Palestinians, confirmed that Olmert’s statements were correct.

There can be no doubt that this was a far reaching proposal, perhaps more so than all other offers ever made to the Palestinian leadership. Commentator Aluf Benn wrote (Haaretz, June 26, 2009) that Olmert offered to internationalize the Old City and its environs, i.e., he was willing to concede Israeli sovereignty over the Western Wall, the Temple Mount, the Church of the Holy Sepulchre, the Mount of Olives, and perhaps even the City of David, and hand it over to a consortium with an Arab majority. No Israeli leader before Olmert supported internationalization of any part of Jerusalem. Even Yossi Beilin’s Geneva accord spoke of dividing sovereignty in the Old City between Israel and a Palestinian state, not handing it over to an international entity.

The rejection of Olmert’s offer as well as previous offers by former Prime Minister Ehud Barak at Camp David (July 2000) and the Clinton parameters cast a heavy shadow of doubt over fundamental assumptions underlying the Oslo process. Two of these assumptions were:

a. The Palestinian Authority, represented by the PLO, was working to realize the Palestinians' right to self-determination by forming a Palestinian state on territory conquered by Israel in the Six Day War.

b. The Palestinian Authority was willing to reach an historic – and territorial – compromise with the State of Israel and the Zionist movement.

The rejection of the Barak and Olmert offers reflects what much of Israeli public opinion has long felt, namely, at critical moments the Palestinians find it difficult to make a decision in favor of a pragmatic compromise and almost perforce miss opportunities to realize their national aspirations. They thereby confirm the longstanding Israeli line, “The Arabs never miss an opportunity to miss an opportunity.” This assessment contrasts sharply with the model of the Zionist movement, which in its desire to obtain any territory whatsoever for the persecuted and existentially threatened Jewish people adopted a radically pragmatic attitude and was willing to accept almost any diplomatic plan, provided only that a sovereign Jewish state would be established in its framework.

The Palestinian leadership has demonstrated a radically different approach and seemingly operates on the principle of all or nothing. This questions the sincerity of the drive to establish an independent Palestinian state as a concrete political plan, as opposed to a vision for future generations. It is hard not to wonder whether the Palestinian leadership is intentionally blinding itself, thereby ignoring the fact that the dream of a Palestinian state is rapidly evaporating – although certain Palestinian leaders have admitted in recent months that the goal of establishing a Palestinian state is running aground on the shoals of reality.

Jewish communities in the West Bank have grown by major proportions. These communities have expanded under all Israeli governments, including significantly left wing governments. This clearly demonstrates that the process of Jewish settlement in the territories is deeply rooted within Israeli society, governing institutions, bureaucratic labyrinths, and political systems. Realistically, the Palestinians must conclude that barring anything drastic in the near future, Jewish communities in Judea and Samaria will expand with time, while the dream of a Palestinian state will consequently wither.

Following the withdrawal from Lebanon in May 2000 and the disengagement from the Gaza Strip in August 2005, the belief among much of the Israeli public in the land-for-peace formula has eroded. In contrast to the original optimism, withdrawal led to escalation and two bloody military confrontations. The results of Israel's February elections likely reflect this turnaround.

Any move towards a settlement that includes the formation of a Palestinian state, however small, will almost certainly require the evacuation of about 100,000 Israelis from the West Bank. The political reality in Israel gives rise to serious doubts regarding the likelihood of any government in the foreseeable future that would be able to carry out such a measure in the Israeli political arena.

Rejection of the Olmert plan may indicate that the Palestinian leadership regards the establishment of a state as part of its long term national vision, but not as an element in its concrete work plan. If (and this is a significant “if”) this is indeed the Palestinian leadership’s position, it can be explained in part by its serious concern that establishment of a Palestinian state will necessarily be accompanied by an almost complete withdrawal of IDF forces from Judea and Samaria. This would mean that the massive preventative actions conducted daily by the IDF and other security forces against terrorist organizations throughout the West Bankwould be almost completely halted. In these circumstances, the status of the current Palestinian leadership would be greatly weakened. It is very likely that within a short time Hamas would succeed in driving it out of power. Therefore, the current leadership would presumably try to preempt any such scenario, even though it will never be able to admit this.

Another possible explanation is that the Palestinian leadership believes that time is on its side. From an historical perspective, the Palestinian national leadership can look back at recent decades with great satisfaction. The combination of diplomacy and violence brought a national movement that was rejected and ostracized both internationally and in the Arab world to the status of a powerful organization that frequently receives a highly significant place on the global agenda. This organization has to a great extent redesigned the political map in Israel, and was perhaps responsible more than any other factor for the rise and fall of Israeli leaders in recent decades. It caused a dramatic movement on the Israeli right towards the center and even to the left. The speeches by Palestinian leaders at the Fatah summit (August 2009) demonstrate that they continue to endorse the combination of political activity with popular resistance as a winning formula.

It is thus possible that the Palestinian leadership believes it has no reason to accept a compromise, even an offer as magnanimous as Olmert's; after all, historic experience indicates continual erosion in Israeli positions with respect to “the territories.” In these circumstances, they might believe that future Israeli governments will have to make much more generous offers to the Palestinians. President Obama’s determined efforts to halt Jewish settlement in the West Bank, including Jerusalem while ignoring understandings on this issue with the preceding USadministration, and the erosion in the Likud’s position on the issue of the establishment of a Palestinian state, as reflected in Binyamin Netanyahu’s speech at Bar Ilan University, are likely to reinforce these Palestinian assessments.

In any case, the rejection of the Olmert proposals questions the validity of the assumptions regarding the willingness of the Palestinian leadership to reach an historic territorial compromise with Israel – assumptions that formed the basis of the decision to embark on the Osloprocess. The phrase “territorial compromise” is basically an abstract concept that is difficult to translate into concrete physical terms. What many Israelis regard as a compromise, even a far reaching one, is not necessarily regarded as such by the Palestinians. Moreover, for significant parts of the Israeli public, the Olmert plan presumably represents less of a compromise and more of a yielding to the dictates of the Palestinian Authority.