As I recall, then Prime Minister Yitzhak Rabin basically offered Yasser Arafat concessions that even included the kitchen sink, and Arafat still rejected them. They don't want their own State. They just want to be able to continue their destruction of Israel, no matter what concessions Israel makes. Give them an inch, and they will take a foot. They will take any concessions made as a sign of the other side's weakness. They are no different than Democrats when it comes to negotiations. To Democrat and terrorists, the definition of the term "negotiate," is "getting their own way on everything."
The Palis want ONE state, THEIR state — which would include the borders of the State of Israel — depopulated of Jews.