Israel unveiled several steps that, if met, could lead to serious peace negotiation with Palestinians leading to prisoner exchange, withdrawal of Israeli forces from many parts of West Bank, ease of transit checkpoints, and lifting of financial sanctions.
Israel Prime Minister Ehud Olmert appealed to Palestinians directly saying "We cannot change the past and will not be able to bring back the victims on both sides of the borders" and urged them to use what is there today "to stop additional tragedies." He emphasized that he wants to share prosperity with the Palestinians and that can only come through peace.
Reciprocating Olmert's offer, Chief Palestinian negotiator Saeb Erekat announced willingness to negotiate a final peace deal under the leadership of Palestinian President Mahmoud Abbas but said that for peace talks to progress the ceasefire agreed to by both sides must hold. Palestinian extremist group Hamas was skeptical calling it a "conspiracy" and "a new maneuver" and accused Olmert of not "giving details about the borders."
Hamas is client party of Iran and is basically espousing Tehran's policy trashing Israel. While there is enough material for each side to be suspicious of each other, if both sides desire peace there must be some first step. Olmert's message and offer is more than fair and it is important that Palestinians grab this offer.
Otherwise, the civil war situation in Palestine, Lebanon, and Iraq may spiral the entire region into an area of serious conflict from which it will take decades to recover.