Seven years later, Mahmoud Abbas is reported to have turned down a better offer, and for the same reason: the demand that Israel absorb "all refugees and their descendents."
Do the Palestinians want independence and sovereignty? Put differently and more to the point, are their leaders willing to share what was previously Mandatory Palestine with an independent Jewish state?
In 1947, the Palestinian leadership turned down any division of the land leading to Jewish independence. The result was what they now describe as the nakba, the loss not only of the opportunity for their own state, but also the creation of the Palestinian Diaspora and their 60+ year-long refugee problem.
Fifty years later, in 1998, Yasser Arafat turned down Netanyahu and Clinton at the Wye River summit, and two years after that refused Ehud Barak and Clinton at Camp David, turning down concessions many believe to be maximum Israel can offer if it is to survive as an independent state...
So, do the Palestinians want a state? Maybe, but apparently not one that also provides for a Jewish state...
Israel is a partner in Palestinian misery because status quo, even with terror and Intifada, is easier than the difficulties of achieving peace.
But primary responsibility for 60+ years of Palestinian misery lies squarely at the doorstep of the Palestinians themselves. To remain true to their 1947 decision of all-or-nothing to the lands of Mandatory Palestine through the demand that Israel absorb all "refugees" is nothing less than a guarantee of continued statelessness, perpetual reaffirmation of their Nakba.
Until the Palestinians manage to produce a leader of the caliber of a Ben-Gurion, a politician with the intelligence and acumen to appreciate that compromise and accommodation are the path to statehood, they will continue a people of the Diaspora, apparently content in their misery, a self-pitying and dignity-less existence. That is their curse, and their choice.