It was revealed recently in the press, I think possibly via wikileaks, that the palestinian authourities were in fact prepared to concede a large proportion of settled land in exchange for a peace deal, but that this offer was rejected by Israel.

I think that that one side agreeing not to annex the territory of another side would be a preetty fair start to a peace deal.

A peace deal based on allowing one party to continue to annexing the other party's territory would be quite nonsensical.