The Palestinians and the Israelis have been 'negotiating' for years.
Every year more of the West Bank and Jerusalem are settled by Israelis and Palestinians lose title.

The Israelis have no intention of ever allowing a fully independent Palestine on the west bank (The Judea and Samaria areas of the Israeli administration). Settlements already cut the region almost in two near Jerusalem, are well-scattered over the region, and the Israelis are well on the way to complete control.
See map-
http://en.wikipedia.org/wiki/Israeli_settlement