In what way does this offer a chance of peace? The Arabs have given up nothing. They are laying low now until the Jews move out then they will start killing people again.
I seriously want to now how you think this offers any chance for peace. It defies logic.
It does not defy logic. Until the Palestinians have a viable state (one without hardcore Jewish settlers in the middle of it), they will go on bombing the Israelis. And the Israelis will retaliate and the Palestinians will bomb the Israelis and so on and so on. If the Palestinians get a viable state, some of them will carry on bombing the Israelis, but they won’t get any further. Surrendering the whole of Israel is clearly not going to happen. The point is less Palestinians will be antagonised by the presence of settlers right in the middle of their ‘country’.
From a practical point of view for the Israelis, not having to defend the settlements means they can refocus resources on defending Israel proper.