You're dramatically oversimplifying the West Bank. It's a military occupation, I'm not going to pretend it's going well, but it's going much better than Gaza, and peace talks there have been far more serious. The Olmert proposal was an exceedingly generous proposal, and the reason Abbas didn't engage because, knowing that Hamas still had enough power that he couldn't promise peace, not even with East Jerusalem, and especially not with any kind of land swaps. The core problem right now is just that Netanyahu's government doesn't actually want to make the situation better (and a lot of his —but that problem will resolve itself by Israel's next election. His already low approval ratings have hit the gutter, and his coalition might not last much longer, although they might stick together while the war is going on.