This is quite an interesting story.
I cannot see the reports (as reported) being genuine as they give Israel virtually everything it wants (so why on earth would they turn it down?).

Much more likely that these are "faked" reports ... which begs the question -

Who has most to gain by such misleading and fabricated propaganda?

Hamas ?
Who may want to further weaken / discredit the Palestinian leadership.

or the Israelis ?
Who may see an advantage in portraying the Palestinians as "losers" and themselves as the "good guys" (esp after the recent UN condemnation of their murderous attack on the peace convoy).