Netanyahu has agreed to U.S. terms for a Palestinian state

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http://www.worldtribune.com/worldtribune/WTARC/2009/me_israel0978_12_21.asp

"I think Benjamin Netanyahu has gone through a personal evolution a little like my own," Rosen said. "He continues to be profoundly skeptical that signing a piece of paper can put an end to this conflict. Nevertheless, he has come back to a second term as prime minister with a deeper appreciation of the reality that his relations with the United States, Europe, and moderate Arab neighbors depend on the perception that he can be a partner in the search for diplomatic progress with the Palestinians."

The report said Abbas has been demanding a full Israeli withdrawal from the West Bank, a two-year deadline for a permanent agreement, repatriation and compensation for Palestinians or their descendants who lost their homes in Israel's war of independence in 1948 as well as acceptance of the Saudi peace initiative of 2002. The PA chairman has also rejected any Israeli proposal for an interim agreement.
"Mitchell has not announced the agreement with Netanyahu because delicate negotiations with Abbas still lie ahead," the report said. "Now, a month later, the work on the Israeli side is done. Netanyahu has put the ball in the Palestinian court."