I saw a film called
Jenin Jenin that interviewed several different Palestinian people from various different walks of life. All the people had different takes on what had happenend and what is happening, but each of their final statements were roughly the same: There will be no peace until a Palestinian state is created with Jerusalem as its capital - even the little girl said she would like to kill Sharon and go back to her ancestoral village.
I really don't know what the Israelis want out of the deal.