Correct me if I'm wrong, but if we're going to go back to 1967 borders, then all of that land was part of a Palestinian country called "Jordan", wasn't it? So, clearly looking towards the prewar 1967 status quo is just a pretext for a land grab designed to establish a second Palestinian country in the area, but this one under the control of Fatah or Hamas thugs instead of under the control of the Jordanian king.
That is the fundamental flaw in all the talks. If the two sides really want to make peace and divide the land (excluding Jordan and Egypt), they need to think differently. It is no longer 1967 and the issues facing both sides are different.
To me, it makes no sense to attempt to go backwards to what was the armistice line 40 years ago. It doesn't even make sense for the Palestinians, because the Palestinians would want a sliver of sovereign land that connected Gaza to the West Bank areas for commcercial purposes. 1967 borders doesn't accomplish that.
So there has to be give and take. I suppose they can look at the land and resource distribution of the 1967 armistice line and then decide how to make changes so that Israeli settlements are traded for other lands. New technologies in desalination and farming can be put on offer. And I'm fairly certain that, if there is a convincing plan put forth, that the US, EU and Asia would contribute vast sums of money towards the development of the Palestinian economy and Israeli resource security.
Jerusalem will remain a stumbling block.
But so long as the Palestinians keep thinking about 40 years ago, their past is dictating their future. They are stuck in 1967 and that is why there is no peace, that is why they have not progressed socially or economically. They are being stupid because they are not thinking of the present or the future, only the past.
One more point which nobody every considers is the resettlment of so-called "refugees" in Lebanon. These are incredibly poor, undereducated people and they have their own factions that are out of the loop of the Palestinians Israel occupies today. How will they be integrated? The Arabs of the West Bank are more "middle class", they will most definitely not want these people resettled near them. Gaza is too small to fit them. An absorption plan for these people is nowhere in sight - more indication that the Palestinians are not ready for a state. They cannot plan for the future, they just don't know how. They are stuck in the past, thinking in terms of the past, and of course continually blaming Israel. But they give the upper hand to Israel because they do not have a viable plan for their own future, let alone offering any realistic promise of security for Israel.