The fact of the matter is, this "ultimatum" should have been given MONTHS ago. It is too late for words promising a vision of a Palestinian state to people who murder and slaughter innocents.
Here is my prediction. Within a few weeks, another crazed Muslim thug will blow himself up in another market or bus, and kill another bunch of Israeli kids. And once again, Bush and Powell will trot out a variation of the 'scolding' speech. "We really mean it this time...if the violence continues, no Palestinian state for you!"