With all the tension arising out of Israel's refusal to extend the moratorium on construction within the West Bank, I believe this is a good time to step back and review the history of the border disputes with Israel. For a balanced, and reasonably well-researched, history of Israel's borders, click here to read a Wikipedia article on the subject. As you do, note the following points. (And don't be afraid to click through the various links in the article to track down sources!)
1. The original land of Palestine promised to Israel included modern-day Jordan. However, this was removed by Winston Churchill in 1921, leaving just the land west of the Jordan River for a Jewish National Homeland.
2. The land west of the Jordan was subsequently divided into two separate states--one for Palestinians and one for Jews--by the 1947 U.N Partition Plan. The plan was reluctantly accepted by the Jewish population...but rejected by the Arabs, who attacked the newly established State of Israel.
3. The 1949 Armistice Agreement established temporary borders for the State of Israel. Israel actually ended up with more land than she had been allocated in the 1947 U.N. Partition Plan. The Armistice specifically declared that the lines drawn were not final borders. They were to be established through negotiation, but the surrounding nations refused to negotiate a peace treaty with Israel.
In 1967 the leaders of Egypt, Syria, and Jordan threatened an attack against Israel. Israel took Egypt's decision to close the Straits of Tiran (which blocked access to Israel's seaport of Eilat) as an act of war and launched a preemptive strike on Egypt's air force. Syria (and later Jordan) joined with Egypt, and Israel found herself in a war on three major fronts. In six days Israel pushed the Syrians off the Golan Heights, Jordan from the West Bank, and Egypt from the Sinai peninsula. Later in June, nine days after the fighting ceased, Israel offered to return most of the land to these countries in exchange for peace. In September the Arab nations met in Khartoum and issued their famous three no's in response: no peace, no recognition, and no negotiation with Israel. Eventually, Egypt and Jordan did make peace with Israel. Egypt received back the Sinai, and Jordan renounced her former claims to the West Bank.
Why is all this important? I think it's important because it helps us understand three key points in the current debate. First, when the world calls on Israel to return to the pre-1967 boundaries, it forgets that these were never intended to be--or defined as--permanent boundaries. They marked the end of hostilities after the 1948 war that established Israel's independence as a nation. Final boundaries were to be negotiated, but the Arab countries refused to do so. To now demand that Israel abrogate all her rights before negotiations can proceed is asking her to accept borders that were never intended to be final. Second, Israel's control of this land came about by the refusal of her neighbors to recognize her right to exist...and by their threatened attack in 1967. Third, Israel announced a 10-month moratorium on construction of homes in the disputed territories in November 2009. Why did the Palestinians wait until September 2010--9 months into the 10-month moratorium--to begin negotiations? The world dragged its heals for 8 months...but now blames Israel for a potential collapse of the talks.
It seems hypocritical to accuse Israel of bargaining in bad faith when the current situation was not the result of their aggression or refusal to bargain in the past. It does seem that many don't want the talks to succeed--they just want to make sure Israel gets blamed when the talks finally collapse.